The phosphorus chemical industry is undergoing a cost stress test driven by raw material surges. By late April 2026, granular sulfur at Zhanjiang Port hit 6,700 yuan per ton, up 8% monthly and over 80% year-to-date. Sulfuric acid prices followed, supported by rigid costs and upcoming maintenance of smelting acid units, ensuring high prices persist in the short term.
This raw material spike directly impacts the phosphate fertilizer chain. Companies report significant cost drag from sulfur-based acid production, compressing gross margins. Under price stabilization policies, passing on costs downstream is difficult, leaving some firms in a 'production equals pressure' dilemma.
Corporate Responses to Cost Pressure
Leading firms are not waiting passively. Xinyangfeng adopts a dual-track supply model with pyrite-based and sulfur-based acid production. Its 1 million-ton pyrite acid capacity completely avoids sulfur price volatility, while its 3 million-ton sulfur acid capacity secures low-cost sulfur quotas through fertilizer supply guarantees. By raising the share of new fertilizers, it reduces sensitivity to raw material swings.
Yuntianhua leverages ample sulfur strategic inventories for a pricing advantage over market purchases. It optimizes international procurement and increases smelting acid sourcing from Yunnan to spread high-cost pressure, maintaining full production. Xingfa Group relies on its integrated chain to pass costs through glyphosate and silicones price increases, while advancing a phosphogypsum calcination project to produce 800,000 tons of sulfuric acid annually by 2027, directly offsetting sulfur cost hikes.
Technological Breakthrough: Economic Window for Phosphogypsum-to-Acid
The high sulfur price opens an economic window for phosphogypsum-to-acid technology. China's high sulfur import dependency makes prices vulnerable to geopolitical shocks. Industry consensus is to promote this technology. At a 2026 sulfur chain conference, the China Phosphate and Compound Fertilizer Industry Association targeted reducing sulfur import dependency below 30%.
Guizhou Phosphate Group's global largest phosphogypsum decomposition project runs stably, consuming 1.4 million tons of phosphogypsum annually, producing 600,000 tons of sulfuric acid. Chuanheng Co. postponed a 400,000-ton sulfur acid project, awaiting rational prices, while accelerating pyrite acid capacity in Guizhou and Guangxi, expected to reach 900,000 tons by mid-2027, saving 500 yuan per ton.
Reshaping Industry Resilience
In the short term, high sulfur and sulfuric acid prices persist due to geopolitical tensions and new energy demand. Long term, this price surge is forcing technological iteration and supply chain autonomy.
As phosphogypsum-to-acid and pyrite acid paths scale up, combined with strategic reserves, China's phosphorus chemical industry will build a secure, green, and stable sulfur resource system. Industry resilience will strengthen, shifting from cost pressure to self-sufficiency.