Weakening Overseas Markets Combined with Freezing Demand Accelerated the Decline in Domestic Sulfur Prices

Market Snapshot: A Precipitous Plunge in Prices

1. Sharp Decline: The benchmark price stood at 7,179 RMB/ton on October 13, however by October 19, it had plummeted to 6,076.75 RMB/ton—a drop of over 1,100 RMB/ton in a single week. Notably, two waves of panic selling occurred: a 6.94% single-day decline on October 15, followed by an 8.65% single-day drop on October 19.

2. As of October 20, the benchmark price to sulfur, according to SunSirs, stood at 6,076.75 RMB/ton—a decline of 20.93% from the beginning of the month (7,685.67 RMB/ton). In just half a month, greater than one-fifth of its market value has been wiped out.

In-depth Analysis: Why Has the Domestic Market Fallen So Sharply of Late?

The recent collapse in the domestic market is the result of a "pincer attack" caused by a breakdown in international cost support and a freezing of domestic demand:

1. The collapse of international cost support: Recent official selling prices from the Middle East (Qatar at 835, Kuwait at 820) and spot prices (CFR China at 860-880) have all seen sharp downward adjustments. The shift in the international market from "defending price levels" to "lowering prices to offload inventory" has stripped domestic port traders of the confidence needed to maintain their own price floors.

2. Stagnant trading activity and a "negative feedback loop": Operating rates to downstream phosphate fertilizers (monoammonium phosphate and diammonium phosphate) have plummeted to a low of just over 40%, with producers suffering severe losses (theoretically exceeding 1,000 yuan per unit). Faced with high-cost raw materials, downstream buyers have efficiently "checked out" and refused to make purchases. This has caused the morale of inventory holders to crumble, triggering a panicked, "stampede-like" rush to slash prices and dump stock.

Market Outlook: "Game Theory and Bottom-Seeking" Following a Sharp Decline

Despite the recent, brutal market downturn, the sector is now entering a new phase of strategic maneuvering:

1. Continued downward momentum in the short term: The market remains extremely weak; moving averages have yet to recover, downward price pressure from international markets continues to filter through, and high inventory levels at the upper end of the supply chain still require digestion.

2. Emergence of a "resilient" bottom-building process: Prices have now fallen into a "low" range. In some domestic regions (such as Shandong), transaction activity at these reduce price points has begun to enhance, leading some sector participants to anticipate a possible upward consolidation. As the essential demand to domestic winter stockpiling of phosphate fertilizers begins to materialize toward the end of October—compounded by a structural, prolonged low-inventory ecological stability exacerbated by geopolitical tensions in the Middle East—the market is likely to transition from a sharp decline into a phase characterized by intensifying divergence between bulls and bears, with prices fluctuating and bottoming out at these reduce levels.

In summary, the domestic sulfur market has recently been crushed by a combination of falling international prices and resistance from downstream buyers; the 20% price collapse in a single week reflects an intense, emotional market interaction. With prices now reaching a low range—and while the broader downward direction persists—the phase of panic-driven, precipitous decline might be nearing its end. The market is now entering a period of divergence and bottom-seeking, characterized by tentative buying at reduce price levels alongside continued downward adjustments to items still priced at the higher end.