Last week, the sulfur market was characterized by a "strong external market and stable domestic market, with prices more likely to rise than fall." While both bullish and bearish factors were present, the supporting forces were clearly stronger.

Price trend:

In terms of pricing, a structural divergence was evident. On December 4th, the benchmark price for sulfur, according to SunSirs, was 3,924.33 RMB/ton, a slight increase of only 0.75% compared to the previous day (3,897.33 RMB/ton), indicating minor fluctuations in short-term market sentiment.

Spot market performance:

Major refineries maintained stable prices, and the bidding reserve price at the Dalian refinery even saw a slight increase. In particular, liquid sulfur prices in the Shandong region experienced a significant increase of 20-80 RMB/ton, clearly indicating that regional spot supply was not abundant, and may even be tight. Transaction prices along the Yangtze River remained stable at a high level of around 4,100 RMB/ton.

The core contradiction in the market lay in the gap between "strong expectations" and "weak reality"

On the one hand, the strength of the international market was temporarily the most crucial driving factor. Inquiry prices from India and Indonesia, reaching as high as $530-535 per ton CFR, create a significant price gap compared to China's import price of $490-492 per ton CFR. This indicates that the cost of sulfur imports into China faces significant upward pressure in the future, establishing a solid "cost floor" for domestic market prices.

On the other hand, the domestic spot market was experiencing a "sluggish trading" situation. Sellers, anticipating rising prices in the international market and limited arrivals of goods, were generally reluctant to sell, showing little willingness to ship. Buyers, however, had limited acceptance of the current high prices, making it difficult to conclude transactions, resulting in decreased market activity.

Supply side:

Arrivals at ports were limited. Although total inventory at national ports had increased slightly, inventory at key consumption ports along the Yangtze River continued to decline, indicating that spot supplies in core regions were being slowly depleted.

Demand side:

Although lacking explosive growth, demand was still "slowly but steadily increasing," providing a stable foundation of essential demand. This situation of "limited supply but persistent demand" means the market is unlikely to experience a significant downturn.

Conclusion and Outlook

In summary, the sluggish trading in the market was a temporary standoff between buyers and sellers at high price levels, rather than a signal of a weakening trend. Against the backdrop of tight international sulfur supply and demand and soaring prices, the cost support in the domestic market was extremely strong. Coupled with the limited domestic spot resources and the reluctance of sellers to sell, it is reasonable to conclude that the sulfur market will maintain an upward trend with little likelihood of a significant decline.

In the short term, the sulfur market is likely to continue fluctuating and consolidating at high levels, awaiting new drivers to break the stalemate. Once international high-priced resources are traded and the price increases are gradually passed on to the domestic market, or if domestic downstream demand experiences a concentrated surge at some point, prices are likely to regain upward momentum. Close attention should be paid to the bidding results of the Dalian refinery, the sustainability of the price increase for liquid sulfur in Shandong, and the actual transaction prices of international buyers, as these will be key indicators influencing the market's future direction.

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