By the end of April 2026, the price of granular sulfur at Zhanjiang Port surged to 6,700 yuan per ton, with a monthly increase of 8% and an annual cumulative rise exceeding 80%. Sulfuric acid prices followed, supported by concentrated maintenance shutdowns of smelting acid units in May and June. This dramatic volatility in raw materials is redefining the cost base and competitive landscape of the phosphorus chemical industry.
The Shockwave: From Sulfur to Phosphate Fertilizers
Sulfur and sulfuric acid are core raw materials for phosphate fertilizers, and their price movements directly impact production costs. Sichuan Hengtong publicly stated that despite having pyrite-based acid production capacity and purchasing smelting by-product sulfuric acid, the surge in sulfur prices still significantly weighed on overall costs. Xingfa Group also noted that since March 2026, prices of sulfur, methanol, and other bulk raw materials have risen markedly, putting pressure on some business segments.
More critically, the cost pressure is difficult to fully pass downstream. The phosphate fertilizer industry is constrained by policies ensuring supply and price stability, limiting room for product price increases. Industry insiders predict that geopolitical tensions in the Middle East and surging demand from emerging industries like nickel laterite processing will keep sulfur prices elevated for an extended period, implying sustained cost pressure.
For buyers, this means procurement strategies must shift from short-term price speculation to long-term supply chain stability assessment. Companies relying solely on spot market purchases will face greater gross margin compression risks in the coming quarters.
Cost Moats of Leading Companies: Self-Sufficiency, Inventories, and Product Upgrades
Faced with high raw material prices, leading companies are building resilience from multiple dimensions. Xinyangfeng has established a dual-track supply pattern of 'pyrite-to-acid plus sulfur-to-acid.' Its 1 million ton pyrite-to-acid capacity fully avoids sulfur price fluctuations, while its 3 million ton sulfur-to-acid capacity secures low-cost sulfur quotas through fertilizer supply guarantees. The company is also increasing the share of new-type fertilizers, which are less sensitive to raw material prices.
Yuntianhua leverages sufficient strategic sulfur inventories to build a cost moat, enjoying a clear price advantage over market purchases. It has also optimized international procurement and increased the proportion of smelting acid purchased from surrounding areas in Yunnan.
Xingfa Group capitalizes on its full industrial chain synergy to pass on cost pressures by raising prices of glyphosate, silicones, and yellow phosphorus. More critically, it is accelerating a phosphogypsum calcination project to produce sulfuric acid and cement, expected to start operations in 2027. The project will consume 2 million tons of phosphogypsum annually and produce 800,000 tons of sulfuric acid, directly offsetting the impact of sulfur price hikes.
Diversified Acid Production: The Path to Reducing Import Dependency
China's high reliance on imported sulfur makes it vulnerable to international disruptions. At the 2026 H1 sulfur industry chain exchange meeting, the China Phosphate and Compound Fertilizer Industry Association proposed accelerating the promotion of phosphogypsum-to-acid technology and improving sulfur strategic reserves, aiming to reduce sulfur import dependency to below 30%.
Guizhou Phosphate Group's world's largest phosphogypsum decomposition project, '1468,' is operating stably, consuming 1.4 million tons of phosphogypsum annually and producing 600,000 tons of sulfuric acid and 800,000 tons of cementitious materials. Sichuan Hengtong has postponed its 400,000-ton sulfur-to-acid project and is evaluating phosphogypsum-to-acid technology, while expanding pyrite-based acid capacity with new plants in Guizhou and Guangxi expected to start in mid-2027, adding 900,000 tons of annual capacity at a cost saving of about 500 yuan per ton.
From an industry perspective, the current sulfur price surge is not just a cost pressure test but a catalyst for technological iteration and industrial chain self-sufficiency. As diversified acid production routes scale up, the phosphorus chemical industry can gradually build a secure, green, and stable sulfur resource system.