At the beginning of the month, domestic sulfur port inventories stood at 1.5099 million tons, marking the lowest port inventory level so far this year. Although subsequent arrivals at related ports led to a slight recovery in port stocks, a review of port inventory data over the past two years reveals that current national sulfur port inventories remain at relatively low levels. This situation can be attributed to high prices dampening industry players' interest in importing resources, as well as shipping disruptions caused by geopolitical conflicts in the Middle East, which have limited resource shipments.

It is well known that there is a typical negative correlation between domestic sulfur port inventories and prices. Generally, a significant decline in inventories provides upward support for prices, while a recovery in inventories exerts downward pressure on prices. This correlation was particularly pronounced in March. At the beginning of March, domestic sulfur port inventories were approximately 1.74 million tons, with spot prices for granular sulfur at Zhenjiang Port at 4,260 yuan/ton. By the end of March, port inventories had rapidly decreased to 1.5333 million tons, while prices surged to 6,200 yuan/ton. The inventory difference between the beginning and end of the month was 206,700 tons, with prices rising by over 45%, clearly demonstrating a strong correlation of "accelerating inventory decline and simultaneous price surge."

This trend resulted from the interplay of multiple factors. First, reduced imports laid the groundwork over the long term. Since the fourth quarter of 2025, China's sulfur imports have significantly decreased, with total imports for the quarter at 1.5986 million tons, down 40.02% month-on-month and 32.92% year-on-year. December imports were only 422,400 tons, hitting a yearly low. Sustained low imports have directly dragged down the overall annual import volume, leaving the "supply side" of port inventories chronically weak.

Second, high market prices triggered widespread caution as the market sought to mitigate risks. In the fourth quarter of 2025, offshore prices remained persistently high, placing sustained cost pressure on multiple downstream industries of sulfur in China. Resistance to high-priced cargoes continued to accumulate, leading to a sharp decline in import enthusiasm among traders and factories, who actively reduced purchases of offshore resources and showed significantly diminished interest in importing.

Third, escalating turmoil in the Middle East caused shipping disruptions in the Strait of Hormuz. This prevented the limited resources previously procured by China from arriving on schedule. In March, China's imports of solid sulfur amounted to approximately 300,000 tons, a year-on-year decrease of over 50%, further interrupting inventory replenishment. Against the backdrop of persistently low imports, relatively limited domestic production increases, and stable demand from downstream industries, inventory replenishment fell far short of normal consumption, ultimately leading to a continuous decline in port inventories to relatively low levels.

Looking at the shipping schedule for April, port inventories are likely to continue declining. Previously, as prices continued to climb, industry players adopted an even more cautious approach toward importing resources. The situation in the Middle East remains volatile, and substantial recovery of shipping routes may not be optimistically expected in the short term. Meanwhile, the domestic phosphate fertilizer industry, a major downstream sector, still has periodic rigid demand for sulfur this month. Additionally, considering traders' reluctance to sell and efforts to control orders, market supply is expected to remain tight. Overall, port inventories are projected to continue depleting in April, potentially dropping to around 1.25 million tons. Consequently, domestic spot market prices are likely to remain strong as inventories decline.