In the first four months of 2026, domestic sulfur prices have risen over 80%, with granular sulfur in Zhanjiang port hitting 6,700 yuan per ton, up 8% month-on-month. This is not a short-term fluctuation; geopolitical conflicts and new energy demand are reshaping the cost logic of the phosphorus chemical industry.
Cost Shock and Chain Transmission
The surge in sulfur prices is not isolated. Sulfuric acid, a key intermediate for phosphorus chemicals, has followed sulfur higher, while concentrated maintenance of smelting acid units in May-June tightens supply. For companies relying on sulfur-based acid production, costs are rigidly pushed up, but product prices are constrained by stable supply policies, making full cost pass-through difficult.
Chuanheng Co. explicitly stated that despite having pyrite-based acid capacity and purchasing byproduct sulfuric acid, sulfur price hikes still significantly erode profits. Xingfa Group, however, partially offsets costs through synchronized price increases for glyphosate and silicones. This divergence reveals a pattern: companies with higher integration and diversified product structures are more resilient to raw material volatility.
Strategies of Leading Firms
Facing high raw material prices, leading companies are shifting from passive bearing to active planning. Xinyangfeng has built a dual-track system of ‘pyrite-based + sulfur-based acid production,’ with 1 million tons of pyrite capacity completely avoiding sulfur price fluctuations, while 3 million tons of sulfur-based capacity secures low-cost quotas through fertilizer supply guarantees.
Yuntianhua relies on strategic inventories and procurement optimization, increasing purchases of smelting acid from surrounding areas to dilute high-price sulfur impacts. Xingfa Group looks to technology substitution, with a phosphogypsum calcination project expected to produce 800,000 tons of sulfuric acid annually by 2027, reducing reliance on imported sulfur.
Guizhou Phosphate Group operates the world’s largest phosphogypsum decomposition project, consuming 1.4 million tons of gypsum and producing 600,000 tons of sulfuric acid annually. Chuanheng has postponed a 400,000-ton sulfur-based acid project, instead expanding pyrite-based capacity, with new units expected to save 500 yuan per ton by 2027.
Technological Breakthroughs in Acid Production
China’s high dependence on sulfur imports makes prices vulnerable to international disruptions. This price surge highlights the structural risk. At a mid-2026 industry conference, the China Phosphate and Compound Fertilizer Association called for accelerating phosphogypsum-based acid production to reduce sulfur import dependence to below 30%.
The economics of phosphogypsum acid production are now favorable due to high sulfur prices. Leading firms’ demonstration projects provide replicable technical pathways for the industry.
Industry Trends and Practical Advice
In the medium to long term, high sulfur prices will persist, but the industry is undergoing a cost-driven transformation toward self-reliance. Diversified acid routes like phosphogypsum and pyrite will build a more stable sulfur supply system.