Artificial Intelligence
Domestic sulphur market reproduces crazy "brake" needs policy
In 2007, the most significant surge in chemical products was marked by the introduction of sulfur. Following its market entry in 2008, the domestic sulfur market experienced a sharp rebound, with growth rates that were nothing short of astonishing. Today, the average price of sulfur across most regions in China has surpassed the 4,000 yuan threshold and continues to rise. This trend has raised concerns about how much more room sulfur has for further increases and how to effectively curb its rapid price escalation. These questions have become central topics within the industry.
The author believes that policy interventions will play a crucial role in curbing the soaring prices of sulfur. With limited potential for continued upward movement, the market is beginning to show signs of stabilization.
Currently, several key policy factors are influencing the sulfur market. First, tariff policies have had a significant impact. In 2008, two major tariff adjustments affected sulfur-related products. Export tariffs were imposed on phosphate fertilizers and sulfuric acid, with temporary rates set at 20% for ammonium phosphate during the first and fourth quarters, and 30% in the second and third quarters. Sulfuric acid faced a 5% export tax. Additionally, import tariffs on sulfur were reduced to zero, which helps lower the cost of imported sulfur and eases domestic pressure.
Sulfur is primarily used to produce sulfuric acid, which accounts for three-quarters of the production of phosphate fertilizers. By imposing temporary export tariffs on sulfuric acid, domestic supply can be maintained, reducing the demand for sulfur. Similarly, higher export taxes on phosphate fertilizers can decrease their exports, indirectly lowering sulfur demand. The reduction in import tariffs also helps stabilize sulfur prices.
Second, emission reduction policies are playing an increasing role. Although China’s natural sulfur resources are limited, there are large reserves of high-sulfur natural gas, coal, and oil. As sulfur dioxide remains a key pollutant under national emission control, stricter regulations on sulfur content in fuels and emissions are pushing industries to invest in sulfur recovery systems. This not only enhances sulfur availability but also makes sulfur recovery more economically attractive, especially given the current high prices.
Third, price control policies are being implemented to maintain stability. On January 9, the State Council held a meeting to address price stability, particularly for essential agricultural inputs like urea and phosphate fertilizers. It also announced special inspections to ensure fair pricing practices. Any necessary fertilizer price adjustments due to rising costs must be approved by the government. These measures aim to prevent sulfur price hikes from spreading downstream and to limit the rapid increase in sulfur prices.
Furthermore, sulfur prices have reached "astronomical" levels. Internationally, sulfur prices have surged from over $70 per ton at the start of last year to over $600, representing a nearly 90-fold increase. Domestically, the highest price has exceeded 5,000 yuan, reaching near its practical limit. Currently, China has the highest sulfur prices globally, leaving little room for substantial further increases.
However, the high international prices have led to increased operations at many large domestic phosphate fertilizer plants, boosting demand for sulfuric acid. Despite this, the current supply structure remains challenging to change. As a result, sulfur prices are expected to remain elevated in the first half of the year, especially in the first quarter. After mid-year, as various policy measures take effect, the balance between supply and demand is likely to improve, leading to a moderation in price increases.
Dongguan Anding Technology Manufacturing Co., Ltd , https://www.cn-moulds.com