By late April 2026, the price of granular sulfur at Zhanjiang Port hit 6,700 RMB per ton, up 8% month-on-month and over 80% year-to-date. Sulfuric acid prices followed, supported by high sulfur costs and scheduled maintenance of smelter acid units, with no near-term relief in sight. This raw material price tsunami is directly disrupting the pricing logic and cost structure of the phosphorus chemical industry chain.
Cost Transmission Chain Breaks, Midstream Firms Bear the Brunt
Sulfur is a key raw material for phosphorus compound fertilizers, and its price surge quickly passes to sulfuric acid. Public data shows sulfuric acid prices remain elevated, supported by rigid sulfur costs, with companies reluctant to cut prices. However, downstream fertilizer markets are constrained by stable supply policies, limiting room for final product price increases, squeezing midstream margins. Sichuan Hengtong admitted that despite having pyrite-to-acid capacity and purchasing smelter by-product acid, the sulfur spike still significantly raised production costs. Xingfa Group also noted rising sulfur and methanol costs since March 2026, pressuring some business segments.
This means relying solely on production scale or single sourcing channels can no longer hedge raw material volatility. Companies must rebuild cost defenses across supply chain structure, product mix, and technology pathways.
Leading Firms Build Distinct 'Cost Moats'
Different firms' responses reflect deep layout differences. Xinyangfeng uses a dual-track model: 1 million tons of pyrite-to-acid capacity fully avoids sulfur price swings, while 3 million tons of sulfur-to-acid capacity benefits from low-cost quotas under fertilizer supply guarantees. It also raises the share of new-type fertilizers, which are less price-sensitive. Yuntianhua focuses on inventory management: ample strategic sulfur stocks give it a cost edge, and it optimizes international sourcing while increasing local smelter acid procurement. Xingfa leverages full-chain synergy, pushing glyphosate and silicone product prices up to pass on costs. Crucially, it accelerates a phosphogypsum-to-acid project (expected 2027), which will consume 2 million tons of phosphogypsum and produce 800,000 tons of sulfuric acid annually, directly offsetting sulfur price impacts. Guizhou Phosphorus Group already operates the world's largest phosphogypsum decomposition project, processing 1.4 million tons of phosphogypsum and producing 600,000 tons of sulfuric acid yearly.
Multi-Route Acid Production Accelerates, Industry Fights to Reduce Dependency
China's high sulfur import dependency leaves it vulnerable to geopolitical shocks. At the 2026 H1 sulfur chain conference, the China Phosphate & Compound Fertilizer Industry Association proposed accelerating phosphogypsum-to-acid technology and building strategic reserves to cut sulfur import dependency below 30%. The current high sulfur price opens an economic window for phosphogypsum-to-acid industrialization. Sichuan Hengtong postponed a 400,000-ton sulfur-to-acid project until prices are reasonable, while studying phosphogypsum-to-acid feasibility and expanding pyrite-to-acid capacity. New plants in Guizhou and Guangxi are expected by mid-2027, adding 900,000 tons/year, covering 40% of its acid needs, saving about 500 RMB per ton. Yuntu Holdings flexibly switches between pyrite and sulfur-based acid production and builds thermal phosphoric acid lines to move up the value chain.