SunSirs: China’s Sulfur Imports Plummet and Sulfuric Acid Exports Nearly Halt in First Half of 2026

According to China Customs statistics, the volume of domestic sulfur imports shrank drastically in the first half of 2026, while sulfuric acid exports nearly ceased following the implementation of interim control policies. These extreme shifts in trade data were driven by a combination of global geopolitical disruptions to shipping and domestic policies aimed at ensuring supply security; simultaneously, the supply-demand dynamics, pricing, and global trade patterns across the upstream and downstream segments of both industrial chains underwent fundamental restructuring.

Customs data reveals that cumulative sulfur imports totaled 2.26 million tons from January to June 2026—a 57.7% year-on-year decline from the 5.34 million tons recorded during the same period in 2025. Monthly import volumes showed a continuous downward trend: while imports held steady at around 500,000 tons per month in the first quarter, they plummeted starting in April—dropping to 296,000 tons in April, 268,000 tons in May, and just 147,000 tonnes in June. The year-on-year decline for a single month reached 85.1%, with the monthly import volume falling to less than 20% of the previous year's level; the monthly average dropped from 800,000 tons last year to 380,000 tons, and the total annual import volume is projected to reach only 40% of historical levels. The composition of import sources was also completely reshaped. In 2025, four Middle Eastern nations collectively accounted for 35% of China's total sulfur imports—with Oman alone representing 16%—making the Middle East the primary source of supply. In the first half of 2026, the combined share of these four Middle Eastern nations was slashed to 20.3%, while South Korea, Oman, and Canada emerged as the top three alternative sources, collectively accounting for 58% of total imports, followed closely by Japan. Although small quantities of direct shipments from Iran arrived in April, its overall share was merely 2.8%; disruptions to Middle Eastern shipping routes directly altered the long-standing structure of import sources. The root cause of the continued contraction in sulfur imports lies primarily in geopolitical constraints affecting global shipping. The Strait of Hormuz handles nearly half of the world's seaborne sulfur trade; following the outbreak of regional conflict in late February, shipping in the Persian Gulf faced persistent restrictions, leading to widespread delays for shipments of sulfur—a byproduct of Middle Eastern refineries. Compounded by simultaneous sulfur export restrictions from Kazakhstan, these two traditional core supply channels tightened concurrently. Consequently, overseas sulfur prices surged from the start of the year, driving up landed import costs and prompting domestic traders to voluntarily scale back overseas procurement. Meanwhile, domestic demand dynamics acted as a counterbalancing factor; throughout the first half of the year, essential consumption remained steady for both lithium iron phosphate (LFP) batteries (in the new energy sector) and phosphate fertilizers (in agriculture). As the rigid demand for sulfur did not contract, the import shortfall had to be met by domestic refinery byproducts and existing port inventories. Consequently, port sulfur stocks remained at historically low levels, and raw material prices fluctuated at high levels throughout the year. The shift to alternative import sources—such as Canada and South Korea—has driven up long-term trade costs due to longer shipping distances and persistent logistics premiums. Even if navigation through the strait eases, the global market's tight supply-demand balance is unlikely to reverse in the short term, continuing to impose cost constraints across the entire phosphate chemical and lithium battery material supply chain. Small and medium-sized phosphate fertilizer and phosphoric acid enterprises lacking integrated upstream facilities continue to operate at a loss due to cost-price inversion.

Regarding sulfuric acid customs data, cumulative domestic exports totaled 784,000 tons from January to June, a 64.2% year-on-year decline from the 2.19 million tons recorded during the same period in 2025. Monthly export volumes weakened progressively: while January saw 243,000 tons, volumes stabilized between 110,000 and 140,000 tons from February to May, before plummeting to just 980 tons in June—a year-on-year drop of 99.75% and a month-on-month decline of 99.16%, effectively halting overseas trade. Given that the average monthly export volume in 2025 was nearly 390,000 tons (with an annual total of 4.65 million tons), current monthly export volumes represent a mere fraction of historical figures. The landscape of export destinations is undergoing a simultaneous restructuring; while Chile and Saudi Arabia were previously the primary purchasing markets, Indonesia surged to become the top importer in the first half of the year, driven by demand from wet-process nickel projects. Conversely, Chile's share declined, and procurement volumes from India and Saudi Arabia contracted.

The immediate trigger for the near-total cessation of sulfuric acid exports was a temporary domestic export control policy. The Ministry of Commerce and the General Administration of Customs jointly announced a complete suspension—effective from May 1 through the end of the year—on the export clearance of ordinary industrial sulfuric acid and sulfuric acid produced as a smelting by-product; only small quantities of high-purity electronic-grade sulfuric acid were permitted for export via special approval. Data from June fully confirmed the policy's impact, effectively closing off export channels for bulk industrial sulfuric acid. The policy's underlying rationale centered on domestic food security and supply chain stability. Sulfur relies heavily on imports, and geopolitical conflicts have driven up production costs across the sulfuric acid value chain. Meanwhile, 60% to 70% of domestic sulfuric acid is ultimately consumed in the production of agricultural phosphate fertilizers, such as monoammonium phosphate (MAP) and compound fertilizers. As the demand for spring planting and autumn fertilizer production is critical and cannot be interrupted, the core objective of the regulation was to prioritize the domestic supply of phosphorus chemical raw materials and inputs for grain cultivation. It also aimed to meet raw material needs for the domestic lithium iron phosphate (LFP) new energy industry, while preventing large-scale sulfuric acid outflows that could exacerbate domestic raw material shortages and drive up terminal fertilizer prices. The anomalous, sharp rise in the average export price in June did not reflect mainstream industrial acid pricing; rather, it was skewed by the export of small volumes of high-value, high-purity electronic-grade sulfuric acid—which commands a much higher unit price than standard smelting-grade acid—thereby inflating the monthly average and failing to represent the true market conditions for industrial sulfuric acid exports.

On a global trade level, the tightening of domestic sulfuric acid exports created immediate raw material shortages for overseas hydrometallurgical and fertilizer industries. Copper smelting operations in Chile and nickel processing in Indonesia have long relied on sulfuric acid supplies from China; consequently, overseas spot sulfuric acid FOB prices surged. Overseas chemical enterprises were forced to absorb higher procurement costs, and some small-to-medium-sized smelters reduced operating loads due to raw material shortages, causing a ripple effect that impacted global phosphorus and nickel supply chains. Domestically, sulfuric acid supplies originally intended for export have been redirected to the local market, increasing circulating supply and partially offsetting cost pressures caused by high sulfur prices; this has slightly eased raw material procurement burdens for domestic phosphate fertilizer and iron phosphate producers. However, due to a lack of overseas demand and the domestic off-season, spot sulfuric acid prices have remained high while fluctuating within a narrow range, with significant regional disparities: supply flows more smoothly in the phosphorus chemical hubs of Central and Southwest China, resulting in relatively lower price quotes.

A complete, two-way transmission mechanism has emerged across the sulfur industry chains. Geopolitical conflicts have constrained sulfur imports and driven up upstream raw material costs; meanwhile, to stabilize downstream agriculture and new energy sectors, domestic authorities have implemented export controls on sulfuric acid—locking all production for domestic consumption—to offset the supply gap caused by reduced imports. Although domestic policies have insulated the market from the impact of soaring overseas sulfur and sulfuric acid prices—thereby somewhat stabilizing the volatility of end-market fertilizers and lithium battery materials—the structural shortage of sulfur imports cannot be fully resolved. In the second half of the year, fluctuations in port inventories and overseas shipping will continue to influence price benchmarks and operating rates across the entire phosphorus-sulfur industry chain, and cost disparities among industry players will persist in the long term.

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