Despite minor fluctuations, the domestic sulfur spot market has rebounded strongly to a high of 6,200 yuan/ton, up 620 yuan/ton from last Thursday, representing an increase of 11.11%. The interplay between market supply-demand expectations and geopolitical variables has contributed to the recent strong upward trend in the domestic sulfur market. As for future market performance, the author believes the strong momentum is expected to persist.

The main reasons for the recent price increase in the domestic sulfur market can be summarized as follows:

1. Increasingly Tight Global Supply: Geopolitical conflicts, the extension of Russia’s export ban, and routine maintenance in Japan and South Korea have significantly tightened supply.

Since late February, the Middle East situation has entered a turbulent phase. As a key global sulfur resource export region, disruptions in relevant shipping routes have inevitably stranded resources locally, preventing normal delivery to various demand regions. Meanwhile, detours in shipping routes and high insurance costs have simultaneously pressured import costs and arrival volumes. Additionally, routine maintenance at Japanese and South Korean refineries in April–May, coupled with reduced operations at South Korean refineries this year due to tight Middle East crude oil supply, has led to more pessimistic market expectations. Furthermore, reports indicate that Russia will extend its industrial sulfur export ban, further exacerbating the tight global sulfur supply.

2. Continued Drawdown in Domestic Inventory: Limited arrivals and rigid demand accelerating inventory depletion have gradually tightened spot resources.

It is reported that the number of solid sulfur vessel arrivals at major domestic ports in April is limited. Insufficient import replenishment has already reduced port inventories to levels lower than in recent years for the same period. With ongoing consumption driven by rigid demand, available spot resources at ports are gradually decreasing. Coupled with pressure on domestic supply, the market may face a tight supply situation characterized by import gaps, reduced domestic output, and inventory drawdowns.

3. Persistent Rigid Demand from Major Downstream Sectors: The implementation of supply guarantee policies ensures that operating rates in the phosphate fertilizer industry, despite fluctuations, will not decline rapidly.

Currently, it is a critical period for domestic fertilizer supply guarantees. Although phosphate fertilizer enterprises face significant cost pressures, their industry capacity utilization must meet basic requirements, leading to steady demand for sulfur-based sulfuric acid and sulfuric acid. Additionally, periodic restocking in other downstream sectors provides supportive effects for sulfur market price increases, laying the groundwork for upward momentum.

Outlook for the Sulfur Market

Based on current expectations regarding geopolitical developments and supply-demand dynamics, the domestic sulfur market in early to mid-April is likely to maintain a high-level, firm-to-steady tone, with prices prone to rising rather than falling. The upper limit of price fluctuations will depend on the progression of relevant geopolitical situations.

In the short term, key supportive factors remain:

1. No signs of easing in the Middle East situation, with no clear timeline for the resumption of smooth shipping routes.
2. South Korea’s production cuts in April have materialized, tightening supply in the Asia-Pacific region; the availability of liquid sulfur resources in Shandong and East China is shrinking.
3. Supply guarantees remain time-sensitive, and rigid demand shows no signs of rapid withdrawal.

The medium-term buffer period requires further observation. As the mandatory requirements for spring ploughing supply guarantees wind down, the phosphate fertilizer industry may adjust operational plans according to capacity due to high raw material costs. However, low port inventory levels and delayed vessel arrivals will continue to provide fundamental support for market sentiment. During this period, triggers for supply-demand tensions in the spot market may largely depend on developments in the Middle East situation.

Overall, aside from the fundamental factors mentioned above, relevant risk variables remain difficult to control. Supportive factors for the market include: escalation of Middle East conflicts, persistently low resource arrivals, and rapid inventory drawdowns. Adverse factors include: easing geopolitical tensions, concentrated import arrivals after shipping routes reopen, weakening downstream demand, and procurement stagnation due to high prices. Given the current situation, domestic sulfur spot prices are expected to have the potential to climb further in the short term, with the aforementioned supportive factors serving as the driving force for upward movement. However, the market is often subject to intangible changes and unexpected developments. It is advisable for industry participants to approach the market rationally, avoid chasing highs, and closely monitor developments in the Middle East situation, port arrivals, and inventory data to adjust strategies promptly.