The domestic sulfur market has recently reversed the downward trend seen in October, shifting to an overall upward trajectory. As of now, the price of main-grade granular sulfur at Zhenjiang Port has risen to approximately 4,950 yuan/ton, marking a cumulative increase of 4.21% since the end of October. The factors driving this recent bullish momentum are primarily concentrated on resource supply and market sentiment:
On one hand, suppliers offering long-term contract resources have strengthened their intention to enter the spot market for procurement and are gradually executing these purchases. Simultaneously, some previously contracted resources have been transferred to southern regions, further reducing the volume of tradable resources available at major wharves along the Yangtze River and tightening the supply of circulating spot inventory. On the other hand, influenced by the tightening of resources, holders' previously pressured mindset and operational intentions have shifted, with increased reluctance to sell and stronger willingness to maintain prices. This has broken the previous stagnation in trading atmosphere, improving market inquiries and transaction activity, thereby facilitating the upward movement of spot prices. Details regarding these developments will be elaborated upon below.
Although the USD-denominated international market remained weak throughout October, consider a recent purchase of Indonesian sulfur resources priced at CFR $750/ton. Converted to RMB, the landed import cost is approximately 5,700 yuan/ton, creating a clear gap compared to port spot prices following the market rebound. This disparity underscores the higher cost-effectiveness of domestically circulating spot resources, prompting some end-users and traders to replenish inventories, which has become one of the key support factors for the current market rally.
Based on Q3 import data and vessel schedules for October–November, the arrival volume of imported resources remains scarce, leading to tight supply replenishment. Meanwhile, two vessels carrying domestic sulfur arrived at Zhanjiang Port in November, and Beihai Port is also expected to receive subsequent inflows of domestic resources. These trends reflect how the structure of port resource replenishment and arrival rhythms impact market sentiment. The limited availability of tradable resources naturally makes it difficult for traders to source low-priced cargo, pushing market prices upward.
Despite multiple rounds of negotiations between suppliers and buyers resulting in reduced or partially cancelled deliveries under long-term contracts, contract suppliers still need to procure resources from the spot market to meet delivery obligations. Their demand-based follow-up and actual purchasing activities provide certain support to the spot market.
Market Outlook
While the recent price increase reflects a shift in merchants’ willingness to enter the market, the sustainability of their procurement requires further observation. With the start of a new delivery period, the rational and cautious stance previously adopted by merchants entering the market may disrupt the currently recovering trading sentiment.
Regarding the international market, the USD-denominated sector is expected to remain weak, lacking effective drivers for a recovery. Difficulty in stimulating demand is the key factor pressuring market sentiment. Downstream purchasing willingness remains cautious, failing to provide strong support for USD prices. Against this backdrop, the bearish pattern in the USD market may persist, with high wait-and-see attitudes among participants and little prospect for substantial improvement in the short term.
On the supply side, major domestic refineries are currently supplying downstream directly, while other private enterprises maintain existing domestic trade circulation cycles. From a data perspective, the volume of domestic resources actually entering market circulation remains relatively limited. Future focus should be placed on refinery maintenance recoveries, rising operating loads, and the pace of domestic resource exports. Regarding imports, the significant price inversion between imported costs and domestic spot prices continues to suppress trader operations due to risk awareness.
On the demand side, downstream operating rates are generally not optimistic. The winter stockpiling period is inherently prolonged, and with the "One Guarantee, Two Restrictions" policy still in effect, expectations for releasing rigid downstream demand remain relatively limited.
In summary, domestic sulfur port spot prices are likely to maintain a high-level consolidation pattern in the short term. Potential upside depends closely on the sustainability of merchant restocking, the rhythm of resource arrivals at ports, and the recovery of downstream operating rates. Based on current fundamental insights, the sulfur market faces potential correction pressure in the future.
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