Sulfur Prices Break Ceilings, Forcing a Cost Logic Reshuffle in Phosphorus Chemicals

By late April 2026, granular sulfur prices at Zhanjiang Port hit 6,700 yuan per ton, up 8% month-over-month and over 80% year-to-date, setting a new record. Sulfuric acid prices followed closely, with tight supply from maintenance shutdowns keeping them elevated.

Cost Squeeze Across the Phosphorus Chemical Chain

Sulfur is a core input for phosphate fertilizers, and its price surge directly raises acid production costs. For example, Sichuan Hengtong relies mainly on sulfur-based acid production; despite some pyrite-based capacity and purchased smelter acid, the sulfur spike still drags down its costs. Xingfa Group also noted rising costs from sulfur and methanol since March 2026. Industry insiders believe geopolitical tensions and rising demand from emerging sectors like nickel hydrometallurgy will keep sulfur prices high for the long term, making cost pressure a structural issue rather than a passing storm.

How Leading Firms Build Cost Moats

Instead of waiting for prices to fall, top players are building defenses on multiple fronts.

Xinyangfeng uses a dual-track supply strategy: its 1 million-ton pyrite-based acid capacity fully avoids sulfur price volatility, while its 3 million-ton sulfur-based capacity secures low-price sulfur quotas through fertilizer supply guarantees. The company is also raising the share of new-type fertilizers, which are less sensitive to raw material costs, leaving room for margin recovery when sulfur prices fall.

Yuntianhua leverages its ample strategic sulfur inventory for a clear price advantage, while increasing purchases of smelter acid from Yunnan to diversify supply and keep plants running at full capacity.

Xingfa Group passes on cost increases by raising prices of its main products like glyphosate and silicones, thanks to its integrated supply chain. More crucially, it is accelerating a phosphogypsum-to-sulfuric acid project that will consume 2 million tons of phosphogypsum and produce 800,000 tons of sulfuric acid annually by 2027, directly offsetting sulfur price shocks.

Technology Shift: From Import Dependence to Self-Reliance

China’s high reliance on imported sulfur makes prices vulnerable to global shocks. The current price spike is accelerating technology upgrades to reduce import dependence.

Guizhou Phosphate Group’s world’s largest phosphogypsum decomposition project is running stably, consuming 1.4 million tons of phosphogypsum and producing 600,000 tons of sulfuric acid annually. Sichuan Hengtong has postponed a 400,000-ton sulfur-based acid project, is reassessing phosphogypsum-based acid feasibility, and is building new pyrite-based capacity in Guizhou and Guangxi, expected to reach 900,000 tons per year by mid-2027, saving about 500 yuan per ton.

The China Phosphate & Compound Fertilizer Industry Association calls for accelerating phosphogypsum-based acid technology and building a strategic sulfur reserve to cut import dependence to below 30%. The high sulfur price has opened an economic window for these technologies.

Practical Implications

For Buyers - Focus on suppliers with high self-sufficiency: firms like Xinyangfeng and Yuntianhua offer more stable pricing. - Increase purchases from producers using pyrite or phosphogypsum-based acid, which have more stable cost structures. - Long-term, prioritize suppliers with diversified acid-making routes to hedge against sulfur price volatility.

For Exporters - High sulfur prices will push up phosphate fertilizer export costs; negotiate price adjustment mechanisms with overseas clients early. - Monitor domestic policies on fertilizer supply and price controls, as export quotas and tariffs may tighten further. - Partner with domestic firms using pyrite or phosphogypsum-based acid to lock in long-term export orders at competitive costs.