This week, the domestic spot price of sulfur showed a trend of pulse surge, high pressure and decline. On August 5th, the benchmark price of sulfur was 9169 yuan/ton, which rose sharply for two consecutive days driven by geopolitical premiums. On August 7th, it rose to 9535.67 yuan/ton, setting a short-term high and maintaining a three-day sideways trend at that price. On August 10th, the market turning point appeared, with prices falling 1.05% month on month to 9435.67 yuan/ton; On August 11th, the price remained stable at 9435.67 yuan/ton, indicating a significant decline in short-term bullish driving force.

1、 International geopolitics form bottom support for external market prices, but there is a blockage in transmission between internal and external markets
The ongoing conflict between the United States and Iran continues to disrupt the shipping order in the Strait of Hormuz, with the number of ships passing through the strait remaining at a low level. As a core global sulfur export region, the Middle East faces tight shipping capacity and increased logistics risks, which provide strong emotional support for international sulfur offshore quotations. Overseas traders have raised their forward supply quotes, and the market is concerned about the decline in global sulfur cross regional circulation efficiency, which has become the core driving logic for the short-term surge in domestic sulfur prices in this round.
But with the rapid upward trend of the market, the price difference between domestic and foreign markets continues to compress, and the import arbitrage window closes. Downstream resistance to high priced imported goods is increasing, and the premium brought by geography is gradually being digested by the market. Simple risk premium is difficult to sustain further upward movement of domestic spot prices, and the positive margin continues to decline.
2、 Downstream costs are under pressure, making it difficult for terminal demand to bear high raw material prices
The core consumption area of sulfur is the phosphate fertilizer industry chain. Currently, international sulfur continues to operate at a high level, greatly increasing the total cost of phosphate fertilizer production. On the one hand, the demand for overseas phosphate fertilizer procurement tends to be cautious, and the increase in domestic phosphate fertilizer export orders is limited; On the other hand, the domestic fertilizer market is in the traditional off-season of demand, and the transmission of finished product prices is not smooth, making it difficult for production enterprises to transfer raw material costs downstream.
In this context, downstream factories adhere to the strategy of purchasing essential goods to avoid the risk of high price stocking, and the market lacks centralized replenishment behavior, resulting in a sustained lack of spot trading. The weak demand side has become the core fundamental factor that limits the sustained rise of sulfur prices and drives the market to turn around and fall.
3、 The domestic spot supply side remains stable, and the supply-demand balance is gradually shifting towards looseness
The by-product sulfur production of domestic refineries remains at a normal level, and there has been no significant inventory depletion in coastal ports. In the phase of geopolitical news stimulation, traders are reluctant to sell and have a strong upward sentiment; After the price surge, some holders of goods have increased their willingness to monetize, leading to an increase in market circulation of goods.
The current fundamental contradictions are clear: external geopolitics only provide price sentiment support and cannot substantially change the domestic short-term supply and demand pattern; The fundamental bearish effects brought about by the off-season demand are persistent.
Future prospects
In the short term, geopolitical disturbances will continue to provide bottom support for external prices, and the conditions for a significant deep decline are not yet met; However, there is a lack of demand follow-up in China, and the trading atmosphere continues to be weak. The contradiction of high prices suppressing procurement is difficult to quickly alleviate, and there is further room for downward exploration in the sulfur spot market.
The follow-up focus will be on tracking three major variables: the progress of shipping recovery in the Strait of Hormuz, and the pace of sulfur source shipping in the Middle East; The operating rate and procurement rhythm of domestic phosphate fertilizer enterprises; Changes in sulfur arrivals and inventory at coastal ports.