In 2023, after a long period of weak and stable adjustment, the sulfur market once again caught the attention of the entire industry with a significant jump, while also bringing a tense atmosphere to the operation of the future sulfur market. The purchaser's resistance to the high price of sulfur is in stark contrast to the traders' actions of covering up and raising prices. The conflict of interests between buyers and sellers, and the re picking of the balance point, will become the key to market development. This article focuses on the supply and demand relationship of China's sulfur market, analyzing the future trends of the sulfur market for readers.
High external dependence is easily influenced by international prices
According to the estimation of the China Sulfuric Acid Industry Association, the total sulfur production in China will be around 5.9 million tons in 2023, with an annual sulfur import volume of 11.236 million tons and an external dependence rate of 65.6%. China's demand for sulfur is still large, and the annual sulfur import volume exceeding 10 million tons will continue for many years to come. The persistent high external dependence determines that China's sulfur prices are easily influenced by international prices.
The international market has entered an era of oversupply, so don't be intimidated by short-term high prices
The international sulfur market has entered an era of oversupply since 2023, with a global sulfur oversupply of around 550000 tons in 2023. Although in 2017, due to the concentrated production of a large number of newly built phosphate fertilizer plants in Saudi Arabia and Morocco, the oversupply situation was significantly alleviated in the short term, the international sulfur market will operate in an environment of oversupply for the next five years.
According to statistics, the total global sulfur supply in 2023 was 65.3 million tons, with a demand of 64.5 million tons and an oversupply of 800000 tons; The situation of oversupply in the global sulfur market will reach its peak in 2019, with an oversupply of 900000 tons, gradually easing and achieving basic balance by 2023.
The impact of acid smelting on the market is expected to accumulate, and sulfur demand may be affected
According to statistics from the China Sulfuric Acid Industry Association, from 2017 to 2018, China's sulfuric acid production capacity increased by a total of 16.25 million tons, of which only 2.25 million tons were newly added for sulfuric acid production, while the newly added capacity for smelting acid reached 10.3 million tons. The demand for sulfuric acid in our country has stabilized and it is difficult to see a significant increase. The rapid expansion of smelting acid is bound to replace some sulfur or pyrite in acid production. At that time, the demand for sulfur will also be compressed.
The relocation trend of chemical enterprises has become a factor X
Since the General Office of the State Council issued the Guiding Opinions on Promoting the Relocation and Transformation of Hazardous Chemical Production Enterprises in Urban Population Intensive Areas on September 4, 2017, multiple provinces have issued relocation plans. According to the association's statistics, the total production capacity of sulfuric acid enterprises included in the relocation plan or with relocation intentions is 7.8 million tons, accounting for 6.2% of the total sulfuric acid production capacity; The total relocation capacity of phosphate fertilizer enterprises is 3.1 million tons of P2O5, accounting for 13.8% of the total phosphate fertilizer production capacity. Although the specific relocation time has not been announced yet, this batch of relocated enterprises has become an important factor that the market has to consider. If all of them are relocated, the demand for sulfur in the market will decrease by about 1 million tons in the short term.
summary
The global sulfur market has entered an era of oversupply, although the oversupply rate is not yet significant, it is still beneficial for end-users to operate in the market. The Middle East will still be the global sulfur trading center, and its suppliers will still have a high voice in the short term. For Chinese buyers, not chasing high prices and not speculating may be the best strategy to cope with the market.