Sulfur: Stalemate on High Stage
China’s sulfur market sees narrow price decline amid mixed factors interplay. Main granular sulfur price at Zhenjiang Port stands at CNY9,100/t (-CNY50/t WoW). Escalating shipping risks at the Strait of Hormuz fuel global supply worries, while Kuwait’s sharp cut to its August contract price to USD865/t FOB (-85/t), easing part of the market tense atmosphere. Domestic players adopt a wait-and-see stance with sluggish inquiries, putting the market in stalemate.
- Domestic market price consolidating, trading sluggish.
Domestic sulfur drifts slightly lower with thin trading. As of August 12, granular sulfur at Zhenjiang Port is assessed at CNY9,100/t, dropping CNY50/t from last week. Digestion of international news’ impact plus buyers’ reluctant sentiment has dragged price level down. Sellers are willing to sell yet buying interest remains muted. Low port inventory offers support to prices above floor level, but poor transaction activities prevent price rally.
- Supply disruptions intertwined with geopolitical risks
Global sulfur supply faces intertwined geopolitical impact. Canadian wildfires disrupt sulfur rail transportation, and port traffic jam in Vancouver together impact the intl’ market. Kazakhstan keeps its sulfur export ban for destinations other than Russia, offsetting extra supply potential from Russia’s releasing transit rules. Tensions in the Middle East continues, no non-Iranian sulfur-carrying vessels have exited the Strait of Hormuz for 12 consecutive days. Middle East FOB quotes diverge in August: Kuwait KPC cuts price by USD85/t to USD865/t FOB. Qatar holds at USD890/t FOB. UAE ADNOC keeps USD1000/t FOB for the Indian sub-continent. Higher insurance surcharges due to strait risks lift real landed costs. Roughly 45 % of seaborne sulfur passes through this strait, turning geopolitical risk into tangible cost pressure.
- Market Outlook: Narrow-range consolidation dominant trend
Narrow range consolidation is expected to dominate the outlook. Middle East tension development remains the key driver. Domestic traders will likely stay on the sidelines, with limited fresh capital entering the market. However, structural supports persist. Global sulfur supply-demand gap exceeds 5 million tons and port inventory sits at a ten-year low. Downstream phosphate fertilizer plants suffer heavy losses and curb purchases amid high sulfur prices. Conditions are absent for sharp one-way rises or crashes. High level and wide range oscillation will prevail. Market participants shall monitor Hormuz strait shipping resumption in the Middle East. Operation rate and procurement from domestic phosphate fertilizer producers should also be monitored.
