Domestic sulphur market reproduces crazy "brake" needs policy

In 2007, the most significant rise in chemical products was marked by the introduction of sulfur. Following its market entry in 2008, China's domestic sulfur market experienced a surge, regaining its previous frenzy. The rapid growth rate and explosive increase were truly astonishing. Currently, the average price of sulfur in most regions has surpassed 4,000 yuan, and it still shows no signs of slowing down. The question remains: how much potential is left for sulfur prices to rise? And more importantly, how can the current surge be controlled? These issues have become central topics within the industry. The author believes that policy interventions will play a crucial role in curbing the soaring sulfur prices. With limited room for further increases, the market seems to be approaching a turning point. Currently, several key policy factors are influencing the sulfur market. First, tariff policies have had a major impact. In 2008, two major tariff adjustments affected sulfur-related products. One involved phosphate fertilizers and sulfuric acid, with export tariffs set at 20% for ammonium phosphate in the first and fourth quarters, and 30% in the second and third quarters. Sulfuric acid also faced a 5% export tax. Additionally, a zero-tariff policy was introduced for sulfur imports, which significantly reduced the cost of imported sulfur and helped stabilize domestic prices. Sulfur is primarily used in the production of sulfuric acid, which in turn is essential for manufacturing phosphate fertilizers. By imposing temporary export tariffs on sulfuric acid, domestic exports are reduced, increasing local sulfuric acid availability and thereby decreasing sulfur demand. Similarly, higher export taxes on phosphate fertilizers reduce their export volume, indirectly lowering sulfur demand. These measures collectively help slow the growth of sulfur demand. Another important factor is emission reduction policies. Although China has limited natural sulfur resources, it has access to large amounts of high-sulfur natural gas, coal, and oil. As sulfur dioxide is a key pollutant targeted for reduction, stricter regulations on emissions and sulfur content in fuels have pushed industries to invest in sulfur recovery technologies. This not only supports environmental goals but also provides economic incentives for sulfur recovery. As a result, these policies are expected to boost domestic sulfur supply. Price control policies also play a vital role. On January 9, the State Council held a meeting to address price stability, particularly for fertilizers like urea and phosphate. It emphasized the need to maintain stable fertilizer prices and conduct special inspections to ensure compliance. If price adjustments are necessary due to rising costs, approval from the government’s pricing authority is required. These strict controls aim to prevent the spread of high sulfur prices to downstream sectors, effectively curbing the upward trend. Moreover, sulfur prices have reached "astronomical" levels. The external price surged from over $70 at the start of last year to more than $600, an increase of nearly 89 times. Domestically, the highest price has exceeded 5,000 yuan, nearing the limit of what consumers can bear. China now holds the highest sulfur prices globally, leaving little room for substantial further increases. Despite this, the high international prices have led to increased operations at large-scale phosphate fertilizer plants, driving strong demand for sulfuric acid. While the current supply situation remains challenging, the influence of policy measures is expected to grow, especially in the second half of the year. As a result, sulfur supply and demand are likely to balance out, easing the pressure on prices.

Crystal X Multi-stone

Dongguan Anding Technology Manufacturing Co., Ltd , https://www.cn-moulds.com