With the National Day holiday over, the domestic sulfur spot market has shown no signs of recovery, completely diverging from the traditional "Golden September and Silver October" seasonal pattern. Although holders maintain a relatively stable sentiment due to limited import replenishment and exhibit strong willingness to support prices, sluggish demand and risks associated with high price levels have led to an awkward market situation characterized by few buyers and hesitant sellers. Meanwhile, the previously resilient international market has suffered a setback. With weakening linkage between domestic and overseas markets, while the domestic sulfur market has not yet experienced a sharp decline, upward momentum is scarce, and downward risks are gradually emerging.
As widely known, domestic sulfur demand is primarily concentrated in phosphate fertilizer production within the chemical fertilizer industry. Currently, the three major state-owned oil companies ("Three Barrels of Oil") continue to implement targeted supply guarantee policies, ensuring stable raw material supplies for phosphate fertilizer producers. This has alleviated procurement anxiety among these enterprises to some extent and consequently reduced their willingness to actively restock in the spot market. Simultaneously, exports of phosphate fertilizers and sulfuric acid remain subject to ongoing policy restrictions. Despite being in the autumn fertilizer season, the phosphate fertilizer market appears weak, with chaotic pricing and frequent occurrences of low-end supply sources, driven by factors such as depressed terminal demand, falling costs, and ample inventory. This has resulted in poor digestion of finished product inventories, keeping enterprise operating rates at relatively medium-to-low levels, which naturally limits the release of rigid demand for sulfur. Furthermore, considering that sulfur prices are at historically relative highs, most traders—except those under long-term contracts—are adopting a wait-and-see attitude regarding entering the market to build positions. Consequently, sustained purchasing support is difficult to form. Under the dual influence of policy and price, there are very few interested buyers in the spot market, leading to generally thin trading activity.
Distinct from the September market, the recent trend in the international sulfur market has been notably weak. First, official October contract prices for the Middle East region were announced successively. According to relevant sales data, Qatar, the UAE, and Kuwait set their October contract prices at FOB $835/ton, FOB $890/ton, and FOB $820/ton, respectively, representing month-on-month reductions of $45–$70/ton. While the decrease in these contract prices was largely anticipated by market participants, the drop in CIF (Cost, Insurance, and Freight) prices in other markets came as a slight surprise, reflecting perhaps a degree of complacency among some traders regarding the previously firm performance of overseas markets. Recently, international spot prices have weakened further, with inquiry quotes for Indonesia now ranging between CFR $875–$900/ton. Additionally, reports indicate that multiple batches of Middle Eastern sulfur cargo ships have successfully transited the Strait of Hormuz. While this alleviates concerns about supply shortages, it also tends to dampen market sentiment further.
Regarding the subsequent market outlook, supply-demand fundamentals currently offer no positive signals. On the domestic supply side, resource output remains stable, with continued targeted supply guarantees from the "Three Barrels of Oil." Import replenishment will likely continue to be constrained by awareness of price risks. On the demand side, export restrictions on phosphate fertilizers and sulfuric acid are unlikely to be lifted in the short term, limiting the potential for rigid demand release in industrial end-use sectors. More importantly, caution is warranted regarding rumors that several bulk carriers loaded with Middle Eastern sulfur resources successfully passed through the Strait of Hormuz during the National Day holiday. Market participants need to closely monitor whether any of these resources have been deployed into the domestic market.
Market sentiment is expected to remain negative. Although current holders show willingness to support prices, given the expectation of sluggish demand, it remains to be seen how long their psychological support can sustain their operations. Facing the risk of relatively high prices, most traders generally adopt a "follow-the-market" approach and tend to delay purchases until price trends become clearer, thereby intensifying the overall wait-and-see atmosphere.
In summary, the domestic sulfur market is currently in a sensitive phase characterized by "high-level stalemate with underlying turbulence." Suppressed demand and weakness in the international market may lead to gradual escalation of supply-demand contradictions. Although holders may maintain superficial stability in the short term relying on long-term contracts and the approaching delivery dates for electronic platform transactions, as USD-denominated cost bases shift lower and phased replenishment by long-term contract suppliers concludes, the bargaining power will likely tilt back toward prospective buyers. It is projected that the domestic spot market will probably face downward pressure in the near future. Participants are advised to closely monitor market sentiment, sales/bidding activities, and ship arrival schedules, adjusting operational strategies promptly to mitigate the risk of price declines.
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