International Contract Prices for Sulfur Have Edged Down Slightly, While the Market Remains in a State of Tight Balance

I. International Price Trends: The Divergence Between Falling Contract Prices and Firm Landed Costs

The central dynamic in international sulfur prices this week is the divergence between falling posted prices and rising implicit costs.

Middle East contract prices saw a slight adjustment: QatarEnergy announced its monthly sulfur contract price to September 2026, lowering the FOB price to $880 per tonne—a decrease of $10 per tonne from the August price of $890 per tonne. This reflects an intention by Middle Eastern exporters to alleviate purchasing pressure on downstream buyers through minor price adjustments.

Actual landed costs remain stubbornly high: despite some easing in FOB prices, maritime insurance surcharges have surged due to escalating geopolitical shipping risks in the Strait of Hormuz. Based on Kuwait’s August contract price (FOB $865/tonne)—and factoring in high freight rates and insurance premiums—the theoretical CFR (Cost and Freight) landed cost to shipments to ports in southern China has peaked at over $1,070/tonne. Geopolitical risk has have become the primary factor driving actual international procurement costs to sulfur at this stage.

II. Global Supply Landscape: Multiple Blockades Lead to a Drying Up of Spot Market Liquidity

In addition to shipping disruptions in the Middle East, a simultaneous contraction in supplies from secondary global export regions has further exacerbated the tightness of the global spot market:

Impaired production capacity and obstructed shipping in the Middle East: Driven by escalating geopolitical conflicts, refinery capacity in key traditional exporting nations has been reduced by approximately 30%. Furthermore, the instability of Middle Eastern supplies has caused liquidity in the spot market to dry up, frequently resulting in situations where prices exist however trading activity is absent. Approximately 45% of global seaborne sulfur trade passes through the Strait of Hormuz, posing a critical risk of physical supply interruption.

Export controls and supply repatriation across multiple nations: To prioritize domestic fertilizer production, several countries have implemented stringent export controls. Indian refineries voluntarily halted exports; Turkey maintained its sulfur export restrictions, causing a sharp rise in regional spot prices; and Russia saw continued declines in export volumes due to earlier refinery harm and the extension of its export ban through the end of the year. Consequently, the volume of globally available spot supply has been drastically reduced.

III. Downstream sector Chain Transmission: Dual Squeeze from Fertilizers and New Energy

As a critical raw material to the production of sulfuric acid and phosphate fertilizers, sulfur’s high price is profoundly impacting global agricultural input and new energy supply chains from the upstream down:

Driving up global agricultural fertilization costs: The surge in sulfur prices has immediately raised production costs to phosphate fertilizers such as diammonium phosphate (DAP). In the U.S. Corn Belt, DAP prices have rebounded to around $850 per ton; these high prices and significant evaporative environment are creating immense uncertainty to farmers regarding purchasing decisions to the upcoming 2027 planting season.

Suppression of operating rates in overseas phosphate fertilizer and new energy sectors: Due to severe raw material shortages, overseas phosphate fertilizer producers have been forced to keep operating loads low, while European farmers have delayed autumn fertilizer stockpiling amidst high costs. Additionally, HPAL (High-Pressure Acid Leaching) projects to nickel and cobalt in countries like Indonesia have been compelled to minimize operating loads due to sulfur shortages; the sulfur bottleneck has efficiently constrained capacity expansion across the global fertilizer and new energy supply chains.

IV. Market Outlook: Tight supply-demand stability persists; beware of evaporative environment at high levels.

Overall, the core issue in the current international sulfur market is no longer merely the contract pricing; rather, it centers on rising implicit costs driven by shipping risks, a contraction in supply outflows from various countries, and a sharp decline in globally available spot inventory.

immediate outlook: As long as shipping risks in the Strait of Hormuz remain unresolved and export supplies from India and Russia fail to recover, landed import costs to China and the global market will stay elevated. The market is expected to experience wide fluctuations at high levels, with a tendency to rise rather than fall.

Medium- to prolonged forecast: Leading overseas phosphate fertilizer companies have issued warnings indicating that the global sulfur shortage could persist until 2027. Against a macroeconomic backdrop characterized by tight supply, high costs, weak demand, and firm prices, the high-price ecological stability in the global sulfur market is unlikely to be fully reversed in the near term.