According to China Chemical Information Weekly, this year's sulfur market saw the anticipated “Golden September and Silver October” trend transform into a “Silver September and Golden October” scenario. The sulfur market heated up in September and defied expectations with a sharp rally in October.

As of October 30, the mainstream domestic sulfur transaction price had climbed above RMB3,100 per ton (all prices quoted in RMB per ton), hitting a multi-year high. Port transaction prices have repeatedly broken records, with Zhenjiang Port's daily transaction price reaching RMB 3,440—a surge exceeding 31% since September.

Against the backdrop of persistent weakness in many traditional chemical markets this year, the sulfur market has shown a steady upward trend overall. It began to gain momentum in September, with a month-on-month increase of 5%. Notably, October not only avoided cooling off but witnessed an even more dramatic surge, surging over 26% from September levels. This sudden reversal in the market was primarily driven by sustained upward pressure from international markets, coupled with declining port inventories and traders holding onto their stock in anticipation of further price increases.

Overseas Markets Drive Continuous Price Hikes

Overseas markets have been the primary driver behind the rapid surge in domestic sulfur spot prices. The repeated upward movement in international sulfur prices stems from frequent releases of global sulfur demand coupled with a decline in supply capacity.

One major source of sustained demand comes from Indonesia. Since mid-August this year, Indonesia has initiated continuous increases in sulfur procurement. Consequently, its CFR (Cost and Freight) dollar-denominated arrival prices rose from $278–280 per ton at that time to $380–383 CFR on October 17. New orders at $400 CFR emerged after October 20. On October 30, rumors of high-priced USD transactions emerged in the southern market, with non-mainstream resources reaching CFR $416–420 per tonne delivered to China. Indonesian market procurement prices surged to a new high of CFR $430 per tonne, while USD market transaction prices in India climbed even higher to CFR $440 per tonne.

This development provided fresh upward momentum for China's domestic sulfur spot market. By October 31, the benchmark price for granular sulfur at Zhenjiang Port had climbed to RMB3,460, marking a 26% increase since before the National Day holiday.

Additionally, the international market's rise stemmed from limited supply resources in Russia and Central Asia, stimulating import demand in other related markets and maintaining tight global sulfur supply conditions. The ripple effect of this supply gap inevitably makes mainstream resources from the Middle East—the primary sulfur export region—even scarcer. These combined factors have driven up international sulfur prices, triggering a significant surge in domestic sulfur prices.

Port Inventories Continue to Decline

Beyond the strong support from the robust overseas market, the continuous decline in inventory levels at major domestic ports has also been a key factor disrupting the sulfur market.

As of October 29, national port inventories stood at 2.2989 million tons, marking a 3.19% month-on-month decrease.

Reduced arrivals at ports along the Yangtze River—a key hub for imported resources—further fueled the upward momentum. Third-quarter imports to Yangtze River ports showed a declining trend, with August prices experiencing a notable dip. This was primarily due to emerging signs of pessimism in the downstream phosphate fertilizer market at that time.

Concurrently, domestic spot prices remained relatively high while overseas prices continued to climb. Influenced by risk awareness, market participants largely avoided dollar-denominated resources. This trend has persisted, resulting in only approximately 120,000 tons of sulfur resources scheduled for arrival at Yangtze River ports in October. As of October 29, sulfur inventories at Yangtze River ports stood at 1.286 million tons, marking an 8.34% month-on-month decline.

With November's planned sulfur arrivals at Yangtze River ports unlikely to exceed October levels, port inventories are expected to continue declining. This trend may provide foundational support for sulfur prices in the near term.

Traders Holding Stocks for Price Hikes

The recent surge in domestic sulfur prices to record highs is partly linked to speculative trading activities. Against the backdrop of reduced imports and declining domestic supply, traders have intensified their strategy of holding stocks in anticipation of price increases.

Overseas sulfur prices are likely to remain firm going forward. Coupled with geopolitical factors, the constraints on domestic sulfur imports are expected to persist. High transaction prices for new international orders also discourage holders from selling off quickly, as they cannot replenish stocks at lower prices. Restocking demand from phosphate fertilizer plants resuming operations after maintenance may further support sulfur prices, making them more prone to rise than fall.

The price increase has prompted some enterprises to switch to smelting-grade sulfuric acid instead of sulfur for acid production, suppressing part of the demand and creating a risk of weakening for sulfur prices in the future. At the same time, the weakening phosphorus fertilizer market may also trigger a decline in purchasing power, leading to a contraction in overall sulfur demand. Additionally, the recent decline in high-priced transaction volumes and the strengthening of a wait-and-see attitude among downstream players may constrain the continued upward trend in the sulfur market.

As an integrated internet platform providing benchmark prices, On October 31, the benchmark price of sulfur from SunSirs was 3297.67 RMB/ton, an increase of 24.08% compared with the beginning of the month (2657.67 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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