Sulphur 422 Jan-Feb 2026
28 January 2026
Melting sulphur
“From Kazakhstan to Canada, stocks of sulphur have been shrinking…”
The deficit in the sulphur market has led to a new focus on melting down and selling stockpiles of sulphur around the world. From Kazakhstan to Canada, stocks of sulphur have been shrinking.
The sulphur market has always been a slightly strange one. Since the 1990s, supply has been almost completely from involuntary sources, primarily oil refining and sour gas processing, and so has been the main alternative source of sulphuric acid – metal smelting. In few cases is the sale of sulphur or sulphuric acid a key determinant of whether a project proceeds or continues to operate. Conversely, demand, dominated by the fertilizer industry, has been to a large extent dependent on sulphur prices being relatively low – high sulphur prices lead to lower use of phosphates by farmers, which helps balance the market. Logistical constraints tend to determine which sulphur gets to market, and where there is a surplus, stocks build up. These stocks can then be sold when prices are higher, during times of shortage, but with a wrinkle – where the stocks exist as piles of formed sulphur, it is relatively quick and easy to access them. Sulphur stored over long periods, however, especially block sulphur, must be remelted, requiring energy inputs which influence the cost, and leading to a delay in responding to market signals – one must be sure that prices will remain elevated for a significant period to start melting down a sulphur block. This leads to a degree of delay and inelasticity in the market which can lead to price spikes. And, as we note in our articles in this issue, phosphates are no longer the dominant factor in new sulphur demand – battery metals processing is surpassing them in terms of incremental demand, and the price response of battery producers is quite different from fertilizer producers.
Overall sulphur demand overtook global production during 2024, and the shortfall was made up for with a drawdown of stocks, primarily in Kazakhstan and Saudi Arabia. Kazakhstan operators face persistent pressure from the government to reduce stocks, and in fact had been drawing down stocks since 2023, but in 2024 this accelerated considerably, with more than 1 million tonnes of stock sold. From 2023 to mid-2025, Kazakhstan sold an additional 1.7 million tonnes of sulphur, keeping global prices relatively on an even keel when combined with additional stock sales from Saudi Arabia. Kazakh stocks are, however, now largely depleted.
In 2025, Canada also moved to destocking, and this will continue this year. The increase in remelting capacity at the Heartland Sulphur forming unit from 700 t/d to 1,700 t/d is a symptom of this. Other stocks are likely to come from Turkmenistan and potentially even Iran. Set against this, Chinese port stocks have remained relatively high, and generally above 2 million tonnes, though there are some signs of a drawdown of these as sulphur prices have climbed and with continuing restrictions on phosphate exports.
Overall, relief is not expected until the start-up of large sour gas projects in the Middle East from around 2027, and it is therefore estimated that over the period 2024-2028, around 4.1 million tonnes of sulphur will have to be drawn from stocks to keep the market supplied. At present, global sulphur stocks remain relatively high at around 32 million tonnes, around one third of this in Canada, and this is not a problematic situation. However, as battery use increases and fossil fuel use decreases, this cushion could find itself being eaten away over the longer term, and the sulphur industry may need to start considering what will happen when the stockpiles start to run dry.
