1、 Price data
As of March 11th, the benchmark price of sulfur in Shengyi Society was 4616.67 yuan/ton, an increase of 18.07% compared to the beginning of this month (3910.00 yuan/ton).
upper reaches:
International crude oil (Brent) has increased by about 5% -7% since March, pushing up the cost of sulfur production and processing; Natural gas (European TTF) increased by about 8% -10% in March, further raising energy costs.
Downstream:
Since March, sulfuric acid has increased by about 12% -15%, monoammonium phosphate by about 6% -8%, and diammonium phosphate by about 5% -7%.
2、 Rising factors
1. Supply and demand side:
Supply side: Domestic sulfur plants have entered the spring centralized maintenance period, with a phased decrease in production and a reduction in market supply; Logistics transportation in some regions is hindered, and delays in arrival at ports and inland areas further exacerbate the tight supply of spot goods.
Demand side: The peak season for spring plowing and fertilizer preparation is approaching, and downstream industries such as phosphate fertilizer and sulfuric acid have increased their operating rates, resulting in a significant increase in demand for sulfur; In the early stage, downstream enterprises’ inventory was at a low level. Under the expectation of price increases, they concentrated on replenishing inventory, and their purchasing enthusiasm was high, further driving up market demand.
2. Market sentiment:
Traders and downstream enterprises are generally bullish on the future market, actively hoarding and chasing high purchases, resulting in a significant increase in market trading activity; The tight supply of spot goods combined with the recovery of demand has strengthened the market’s expectation of price increases, driving prices to rise rapidly.
3. Geopolitical risks in the Middle East:
Cost side: The tense situation in the Middle East has pushed up international crude oil and natural gas prices, while sulfur is a byproduct of petroleum refining and natural gas processing. The rise in energy prices directly raises the production and transportation costs of sulfur, providing cost support for domestic prices.
Geopolitical conflicts have intensified global commodity hedging sentiment, with funds flowing into the energy and chemical sectors, driving stronger expectations for prices of basic chemicals such as sulfur; As an important global oil and gas production area and sulfur export destination, the Middle East’s concerns about “future supply disruptions” have been reflected in the current prices in advance, further strengthening the expectation of price increases.
3、 Future prospects
In the short term, domestic equipment maintenance will continue, and the tight spot market situation is difficult to quickly ease. Coupled with the cost and emotional support brought by geopolitical risks, sulfur prices are expected to maintain a high and strong operation.
In the medium term, attention should be paid to the release of production capacity after the completion of equipment maintenance, changes in downstream demand after the end of spring plowing, and the actual impact of the evolving situation in the Middle East on the global supply chain, in order to be alert to the risk of high-level pullbacks.
Summary: The core logic behind the rise in sulfur prices this week is the mismatch between domestic supply and demand and the sentiment of merchants chasing long positions. The Middle East geopolitical risks, through cost increases, supply concerns, and emotional transmission, have played a catalytic role in amplifying and strengthening the upward trend, rather than the fundamental reason for this round of price increases.
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