This round of sulfur price surge is crazy. Spot prices at Zhenjiang Port have shot up to over 4,100 yuan/ton, more than one and a half times higher than at the beginning of the year. Even the FOB price in Qatar has jumped to $495—last year at this time it was only around $160. Some people joke that this isn’t sulfur anymore; it’s practically “golden sulfur.”

Jokes aside, there’s some pretty solid logic behind this surge.

**First, let’s talk about how the supply side collapsed**

Sulfur is essentially a byproduct of oil refineries. Global refinery operating rates have been trending downward (institutions predict daily processing will drop from 82.6 million barrels in 2024 to 80.5 million barrels by 2050). Domestic production in November dropped another 5% month-on-month, barely over 1.01 million tons. What’s worse, geopolitics are stirring things up—Russia may cut 1 million tons of exports in Q4 next year, which would push our import dependency from 42% to 50%.

**On the demand side, competition is fierce**

Traditional phosphate fertilizer already consumes more than half of total sulfur output, and that demand is rigid and can’t be squeezed. The key is the takeoff of new energy—lithium iron phosphate (LFP) production hit 2.66 million tons in the first three quarters of this year and will likely surpass 3.6 million tons for the full year. This segment alone will require an additional 1.06 million tons of sulfur. Solid-state batteries are even more extreme—lithium sulfide accounts for a whopping 82% of their cost. Plus, Indonesia’s 658,000-ton MHP capacity coming online in 2026 will need another 6.58 million tons. Global demand has already surged to 82 million tons, and may reach 85 million in the next year or two—supply can’t keep up at all.

**Who’s quietly making a fortune in this round?**

Those with mines are laughing all the way to the bank. Giants like Sinopec and PetroChina, with 8.34 million tons and 3.68 million tons of capacity respectively, are turning sulfur price hikes directly into cash cows. Private refinery and chemical companies like Rongsheng and Hengli are also getting their share of the pie. Sulfide ore companies like Yuegui Co. (reserves of 111 million tons) and Liuguo Chemical (controlling shareholder has 171 million tons) are rising with the tide, since pyrite can be used as a substitute for sulfur in sulfuric acid production.

Integrated industrial chain companies aren’t having a hard time either. Yuntianhua locks in prices through long-term contracts (average purchase price in the first three quarters was 1,975 yuan/ton, much lower than the market price). Chuanheng Co. has its own sulfur-to-acid production capacity, so costs are basically controllable.

But small and medium phosphate fertilizer plants are struggling. With no resources to back them up, their raw material costs have soared. The operating rate for diammonium phosphate plants visibly dropped in October, and some factories simply shut down production.

**How much longer can this bull market last?**

According to Longzhong, the tight supply situation should last at least until Q1 next year, and prices still have short-term momentum. But keep an eye on two turning points:

First, the Middle East will add 2 million tons of new capacity in 2026;
Second, Russian supply may recover in the first half of 2026.

At that point, it’s all about who holds the trump cards. This “bull sulfur” rally is essentially the result of the clash between shrinking traditional energy and the explosion of new energy. Companies with resources are seeing their profits take off, while those without a moat are being eliminated by the market. When the tide recedes, only the toughest survivors who’ve weathered the cycle will remain.