China's Sulphur Market Marks Historic Highs as Prices Surge Toward Year-End 2025

By the end of 2025, China's sulphur market experienced another steep price increase, with market prices reaching ¥4,000 per tonne. The cumulative increase for 2025 reached 185%, and the annual average exceeded ¥2,400/t, marking a historic high. This sustained multi-day rise is notably rare among chemical commodities this year.

From a long-term perspective, China's sulphur market has shown wide price fluctuations between 2009 and 2025, generally oscillating between ¥700/t and ¥1,700/t. A previous peak occurred in 2022, when prices exceeded ¥2,200/t, with preceding years largely characterised by weak consolidation. In 2025, however, the annual average reached the highest level in 16 years, and peak daily prices approached ¥4,000/t.

Daily price trends indicate that granular sulphur in China largely traded between ¥1,000–2,000/t from 2009 to 2020. From 2021 onward, the market saw significant volatility, with daily prices peaking above ¥3,900/t before falling sharply to around ¥800/t. By late 2025, prices exceeded ¥3,800/t following more than 150 consecutive days of increases. Although historic highs have yet to be surpassed, market attention remains elevated and the likelihood of continued price appreciation remains strong.

Drivers Behind the Multi-Month Price Rally

1. Supply-side constraints amid energy transition

Growth in new-energy vehicle production, despite slowing, remains positive, reducing traditional fuel consumption and keeping refinery operating rates at persistently low levels. As sulphur is mainly produced as a refining by-product, low utilisation rates have continued to suppress by-product supply.

Additional disruptions—including geopolitical instability, OPEC+ production cuts, reduced output due to low-sulphur crude promotion, Russia's sulphur export ban, Red Sea shipping disruption, and maintenance activities at Central Asian refineries such as Kazakhstan—have further restricted global supply, supporting sustained price increases.

2. Seasonal demand and high probability of winter price rises

Sulphur prices historically display strong seasonality, with a 64% probability of rising during winter months. Winter stockpiling demand for phosphate fertilisers from China, India, and Indonesia amplifies procurement sentiment and speculative activity. As sulphur is primarily used to produce sulphuric acid for phosphate ore flotation, increases in phosphate fertiliser demand directly stimulate sulphur consumption. Over the past 16 years, the likelihood of price increases between November and December has exceeded 64%.

3. Persistently low inventory levels

By the end of November 2025, China's port sulphur inventories were only 2.2 million tonnes, below normal levels, with some regions holding slightly above 1.8 million tonnes. Imported sulphur accounts for roughly 47% of total consumption and is a key supply channel, making port inventory a direct determinant of market availability.

Seasonal effects and global logistics disruptions have led downstream enterprises to accelerate stockpiling in anticipation of shortages. Coupled with a prevailing market mentality of “buy on the rise,” both traders and end-users have intensified procurement, reinforcing upward pricing momentum.

Price Outlook: Possibility of New Historical Highs

By late November, China's sulphur market approached ¥4,000/t under strong sentiment. Rapid appreciation, however, may meet resistance from downstream buyers, bringing potential high-level fluctuations or minor corrections in early December. Nonetheless, with northern-hemisphere winter stockpiling entering its peak, another sharp rise remains possible in December.

Analysts recommend maintaining rational expectations. As a key raw material for phosphate fertilisers and industrial production, sulphur directly affects sulphuric acid pricing and downstream costs. Excessive price levels could further pressure already weak downstream operations. Enterprises are advised to schedule procurement prudently and utilise pricing corrections for orderly stock building, while traders should remain cautious concerning inventory risks, as corrections after record-high prices may be significant.