A broken system with affordability and availability challenges

Guest Editorial

A broken system with affordability and availability challenges

Following CRU’s recent Middle East Sulphur Conference (MEScon) in Kazakhstan, Peter Harrisson, Principal, Sulphur & Sulphuric Acid Market Services, provides an overview of the current state of the global sulphur market.

Peter Harrisson, CRU’s Principal, Sulphur & Sulphuric Acid Market Services. PHOTO: CRU

The current Middle East conflict, alongside the continuing war in Ukraine, have highlighted the geographical consolidation and frailty of the sulphur supply chain. Sulphur has been a product where shortages have always triggered price increases, with stock drawdown filling any gaps that have materialised. In 2026, this system broke down with both affordability and availability challenges facing consumers.

For sulphur, the Middle East region contributed over 45% of seaborne trade in 2025 with most export ports located inside the Strait of Hormuz. While the conflict has caused some direct damage to sulphur production capacity, much of the supply in the region has continued. Since the start of the conflict, production loss is estimated at around 2.3 million tonnes, with monthly exports falling by more than 1.0 million tonnes per month since March 2026.

Initial price increase were triggered by a sharp tightening of traded sulphur availability. But there have also been sulphur consumption cutbacks in response to the loss of volumes. Sulphur prices climbed from an average of around $500/t f.o.b. pre-conflict to $1,100-1,200/t f.o.b in late-June 2026. These prices have moved into new territory – exceeding the previous peaks of 2008 and 2022 – with the pace and scale of the increases eroding affordability in all consuming sectors.

As sulphur prices climbed, and availability dwindled, consumers in China, Morocco, USA, Brazil, Indonesia and South Africa have all cut consumption. Most of the consumption loss has fallen on the phosphate and industrial sectors, where affordability has been significantly worse than in the nickel and copper sectors.

“The sulphur market is still expected to be in a deep deficit in 2026. This will maintain competition for available volumes and continue the necessity to pull sulphur inventory into the market.”

The largest cuts in the phosphate sector have been at: OCP in Morocco, with cuts of up to 50% of capacity throughout the second quarter of 2026; Mosaic in the US and Brazil, curtailing capacity at three locations; and in China where capacity utilisation rates slumped after the end of the domestic spring season. Many of these decisions to curtail phosphate capacity have been partly due to high sulphur price levels and a lack of sufficient volumes to maintain consumption rates.

Limited global availability is not solely due to a lack of Middle East sulphur supply. Damage to Gazprom’s Astrakhan facility prompted a ban on Russian sulphur exports in late-2025. When the facility was hit again in the second quarter of this year, Russia also moved to ban the loading of Kazakh sulphur onto rail infrastructure for export. Previously, Kazakhstan had been exporting around 0.3 million tonnes per month through Russian ports, with Morocco and Brazil being the main destination markets in 2026.

With recent signs of a resolution to the Middle East conflict, the expectation of a return in sulphur supply and exports has grown. However, rapidly increasing production and exports from the region is not going to be easy. There has been an accumulation of sulphur inventory, both on land and on loaded vessels in the Gulf. More than 0.5 million tonnes of sulphur are loaded and stranded inside of the Strait currently. A formal end to hostilities in the region will likely release export volumes but getting sufficient vessel capacity into the region could be another bottleneck. On land, product inventory is thought to exceed 1.0 million tonnes, with production running at around 60-70% of pre-conflict levels. It is likely to take until August-September to bring the regional export rate back above 1 million tonnes per month, in our view.

Damage to capacity in Qatar, UAE, Kuwait and Saudi Arabia will further cut sulphur production capabilities in 2026. There will also be significant challenges with bringing idled supply back, highlighted by a fatal explosion at Qatar’s Barzan facility which was in the process of being brought back online.

The other challenge in the global sulphur market relates to the willingness of consumers to return to the market as availability climbs. Affordability was a major trigger in the decision by some consumers to cut their sulphur consumption, so a lower price environment would be needed to draw this demand back. A price decline, not a price collapse, is expected as supply returns. The sulphur market is still expected to be in a deep deficit in 2026. This will maintain competition for available volumes and continue the necessity to pull sulphur inventory into the market.