China Sulphur Market Review (Early July 2026) and Its Impact on China's Titanium Dioxide Industry
Created on 07.10
Domestic Sulphur Market in Early July 2026: Supported byGlobal Fundamentals Despite Seasonal Demand Weakness
1. Global Market Fundamentals
High Middle East Contract Prices Continue to Support theGlobal Market
The Middle East, accounting for approximately 45% of global sulphurexports, continued to provide strong price support in early July.
Official July contract prices (FOB) remained at record-high levels:
- UAE OSP: USD 1,000/MT
- Kuwait: USD 950/MT
- Qatar: USD 890/MT
These historically high contract settlements effectively established theglobal price floor, while Middle East spot cargoes were traded around USD895–940/MT FOB.
Although navigation through the Strait of Hormuz resumed in late June,logistics remained disrupted. Around 0.8–1.0 million tonnes of sulphurcargoes had been delayed during the regional tensions, and with an averageshipping time of about 20 days, only limited volumes arrived in Asiaduring early July. Most delayed shipments are expected to reach importingmarkets in the second half of July.
Meanwhile, Russia has extended its sulphur export restrictions through theend of the year, while Kazakhstan continues to suspend sulphur exports, leavingthe global market with very limited additional supply.
Seasonal Demand Caps Further Price Gains
Spot markets outside the Middle East showed mixed performance.
FOB prices were reported at:
- U.S. Gulf Coast: USD 900–970/MT
- Canada: USD 1,100–1,200/MT
Although prices remained elevated, global phosphate fertilizer demandentered its traditional seasonal slowdown ahead of autumn procurement. As aresult, buying interest weakened, limiting further upside in spot prices.
Overall, the international sulphur market remained supported byhistorically high contract prices and relatively low inventories, while tradingsentiment shifted toward high-level consolidation with a mild downward bias.
Import Costs Continue to Provide Strong Cost Support
China's sulphur import cost (CIF) during early July was estimated atapproximately USD 1,050–1,070/MT, including freight of around USD108–116/MT.
Converted into RMB, the landed cost remained close to RMB 8,000/MT,providing a solid cost floor for the domestic sulphur market and significantlylimiting downside risks.
2. China's Domestic Sulphur Market Performance in EarlyJuly
China's sulphur market generally experienced a modest rebound at thebeginning of the month, followed by gradual weakening and high-levelconsolidation, reflecting a balance between elevated import costs andseasonally soft downstream demand.
Price Trend
After reaching an all-time high of approximately RMB 11,750/MT inmid-June, the domestic benchmark price stood at around RMB 8,935/MT atthe beginning of July.
Prices briefly recovered to RMB 9,069/MT on 3 July, beforeeasing to approximately RMB 8,669/MT by 8 July, representing adecline of around 3% during the first ten days of the month.
Despite the correction, domestic sulphur prices remained approximately 26%below the June peak but still within historically elevated levels of RMB8,500–9,300/MT.
Factors Supporting Prices
Several factors continued to provide strong support:
- Port inventories remained extremely tight at approximately 790,000 tonnes, down 66% year-on-year.
- Record-high Middle East contract prices and elevated freight costs significantly increased import costs.
- China's sulphur import dependence exceeds 60%, making domestic prices highly sensitive to international market movements.
- Traders generally maintained firm offers amid limited spot availability.
Factors Limiting Further Price Increases
At the same time, several bearish factors prevented additional gains:
- The domestic phosphate fertilizer industry entered its seasonal off-season, leading to lower operating rates and reduced sulphur procurement.
- Increasing utilization of by-product sulphuric acid and pyrite-based acid production partially replaced elemental sulphur consumption.
- Market participants anticipated larger Middle East cargo arrivals in the second half of July, prompting some traders to reduce inventories in advance.
Overall, the Chinese sulphur market remained range-bound at historicallyhigh levels, with strong import cost support offsetting weak downstream demand.
Impact on China's Titanium Dioxide Market
Approximately 75% of China's titanium dioxide capacity is produced viathe sulphate process, making sulphur a key upstream raw material throughthe sulphur → sulphuric acid → TiO₂ value chain.
In contrast, chloride-process producers are largely insulated from sulphurprice fluctuations.
Cost Transmission
Producing one tonne of sulphate-process TiO₂ typicallyconsumes 3–4 tonnes of sulphuric acid.
Sulphuric acid accounts for over 30% of total production costs,while sulphur itself contributes approximately 15–20% of the overallmanufacturing cost.
As a general rule, every RMB 100/MT change in sulphur pricestranslates into roughly RMB 80–100/MT movement in TiO₂ production costs.
Although sulphur prices softened slightly in early July, they remained athistorically elevated levels of RMB 8,600–9,300/MT, keeping sulphuricacid prices and production costs under considerable pressure.
Market Implications
Strong Cost Support Limits Downside for TiO₂ Prices
The sharp rise in sulphur prices during the first half of 2026 promptedChinese TiO₂ producers to implement five consecutive price increases, liftingrutile-grade TiO₂ prices by approximately RMB 3,000–3,500/MT.
Although sulphur prices eased marginally in early July, production costsremained significantly higher than a year earlier.
Consequently, sulphate-process producers generally maintained firm pricingstrategies. Despite relatively weak demand from coatings and plastics, therewas little room for substantial price reductions, with most suppliers focusingon stable pricing and disciplined sales.
Increasing Cost Differentiation Among Producers
High sulphur costs have further widened the cost gap within the industry.
Small and medium-sized sulphate-process producers relying on purchasedsulphur or merchant sulphuric acid continued to face severe margin pressure.Some producers reduced operating rates or temporarily suspended production,tightening spot availability.
By contrast, vertically integrated producers with access to pyrite-basedsulphuric acid, metallurgical acid or recycled acid streams maintained asignificant cost advantage and generally sustained operating rates of around 85–95%.
Meanwhile, chloride-process producers, whose production costs are largelyindependent of sulphur, continued to enjoy relatively stable profitability andstrengthened their competitive position during the current market cycle.
Export Market Remains Well Supported
High sulphur costs are not unique to China.
Sulphate-process TiO₂ producers in Europe and otherregions are facing similar cost pressures, constraining global supply andsupporting China's export market.
Chinese exporters have generally adjusted overseas quotations in line withrising production costs, while maintaining competitive price differentialsbetween domestic and international markets. Export demand therefore remainedrelatively resilient despite the modest correction in sulphur prices.
Market Outlook
The slight decline in sulphur prices during early July has only marginallyeased production costs for sulphate-process TiO₂ producers anddoes not alter the overall high-cost environment.
Supported by elevated Middle East contract prices and limited additionalimports expected in the near term, sulphur prices are likely to remain athistorically high levels with limited downside.
For the TiO₂ industry, the market is expected to remain characterizedby strong cost support but relatively soft downstream demand.
Prices are therefore likely to remain generally stable, while productionrationalization among smaller sulphate-process producers continues. Integratedproducers and chloride-process manufacturers are expected to further strengthentheir market share, accelerating the ongoing structural optimization of China'stitanium dioxide industry.