In early June 2026, the domestic bulk chemical raw material market experienced a period of dramatic volatility. Among these materials, sulfur—a core foundational input for fine chemicals, agrochemicals, and new material supply chains—demonstrated a pronounced upward pricing trajectory. On June 7, the bidding floor price for solid sulfur among certain regional refining enterprises in Shandong escalated to 9,800 RMB/ton, with actual transaction prices in several areas showing clear momentum toward breaking the 10,000 RMB/ton threshold. Compared to the average market price of approximately 3,850 RMB/ton at the beginning of 2026, the market baseline shifted upward significantly within a six-month span—a rate of increase rarely observed in recent commodity market history.

Based on a comprehensive review of global supply networks, logistics chains, and downstream consumption structures, the primary drivers behind this round of sulfur price volatility and its subsequent chain reactions are analyzed across the following dimensions:

I. Supply-Side Constraints: Low Import Volumes and Port Inventory Depletion

The underlying logic governing this price shift has transitioned from early external geopolitical expectations into a tangible double-squeeze: a shortfall in import arrivals coupled with a depletion of spot inventories.

1. International Logistics and Foreign Plant Pricing Elevate Import Costs: Because shipping capacities across specific international maritime routes have not fully recovered, marine logistics for key shares of global fertilizer and fine chemical raw materials have faced phase-specific disruptions. In January 2026, national sulfur import volumes fell substantially year-on-year, while the number of arrivals and total cargo volumes from major Middle Eastern producing areas dropped by varying degrees between January and April. Moving into June, major overseas exporters collectively raised their contract prices, with FOB quotes increasing by 40 to 100 USD/ton. Factoring in elevated ocean freight and port handling fees, the landed CFR cost has climbed to around 7,500 RMB/ton, leaving imported cargo in a continuous state of inverted margins and losses.

2. Major Port Inventories Approach Critical Buffer Limits: As of June 7, total sulfur inventories across major domestic ports (including Fangcheng, Zhenjiang, Zhanjiang, and Dafeng) dropped close to a historical low of 900,000 tons, representing a decrease of over 1 million tons compared to levels at the start of the year. More critically, available spot market supply from traders remains exceptionally tight, with transactions driven primarily by immediate-use pickups, severely weakening the market's inventory buffer effect.

II. Downstream Demand Responses: Rigid Demand Pressures and Marginal Growth

Under the heavy weight of unilateral cost increases on the supply side, both traditional and emerging downstream sectors are undergoing structural adjustments:

• Functional Fertilizer and Agrochemical Sectors: The simultaneous high pricing of sulfur and phosphate rock has directly compressed profit margins for downstream production enterprises. Although relevant industry associations implemented upward adjustments to guidance prices for certain finished products, new transaction momentum slowed down due to seasonal agricultural off-peak periods. Currently, operational capacities at several small-to-medium manufacturing units have edged lower, leaving the wider industry in a state of passive price support driven strictly by raw material costs.

• New Energy and Fine Chemicals: Concurrently, with the steady rise in market penetration for lithium iron phosphate and related energy materials, marginal demand for sulfur compounds and derivative acids maintains long-term structural support. However, given the rapid pace of raw material price increases over the short term, certain fine chemical manufacturers face challenges regarding capital deployment and sourcing logistics.

III. Critical Variables and Future Trend Outlook

An objective market analysis indicates that future price trends will depend heavily on the evolution of several core variables:

1. Reconstruction Progress of International Trade Flows: Future movements require close monitoring of shipping and transit negotiations across critical international waterways. Once maritime transit efficiency recovers and lower-cost cargo returns to ports, current domestic high-price levels will face immediate supply-demand rebalancing pressures.

2. Downstream Price Endurance and Operational Rates: If high raw material costs continue to suppress downstream profitability, production cutbacks may expand further, thereby creating a natural demand-side ceiling against unchecked price increases.

3. Macro-Energy Cost Alignment: Combined with the decisions from major oil-producing organizations in early June, any bearish pricing trends in the broader crude oil market could, over the medium-to-long term, prompt refineries to increase the marginal output of byproduct sulfur.

Summary: Over the short term (heading into mid-June), the domestic sulfur market is highly likely to maintain a tight, high-priced, and narrow consolidation pattern against a backdrop of low inventory levels and limited near-term arrivals. In the face of volatile geopolitical and inventory dynamics, enterprises across all segments should carefully evaluate supply chain risks and structurally optimize raw material reserves to navigate phase-specific market fluctuations.