Iran war hits China's sulphur imports as economic fallout from conflict grows

Baghdad [Iran], March 9: The escalating conflict in the Middle East is having a direct impact on China's access to sulphura raw material for producing fertiliser just as the country enters its vital spring planting season.
With China sourcing a large chunk of its sulphur from the Persian Gulf, the effective closure of the Strait of Hormuz is already sending prices for the chemical shooting upwards as Chinese buyers complain of tightening supplies.
China relies on imports for 47 per cent of its sulphur supply, according to a December report by Guosen Securities. More than half of those imports come from six Persian Gulf nations, which ship goods through the Strait of Hormuz to reach international markets.
But Iran has declared the waterway closed to commercial shipping amid its war with the United States and Israel, sending freight costs soaring.
The disruption is already creating issues in Chinathe world's largest grain producer, where farmers consume vast quantities of fertilisers and other agrichemicals each year. Sulphur is a key ingredient used in phosphate fertilisers and pesticides, as well as a range of other chemical products.
Allan Pickett, executive director for fertilisers research at S&P Global Energy, said the price of fertiliser delivered in mainland China averaged US$520 in January and February. Prices were already rising as one of the northern hemisphere's main planting seasons began, and shipping disruptions in the Strait of Hormuz could drive them even higher, he added.
"The domestic producers will have been building inventories for the spring application season, and therefore any further increases in sulphur prices or shortages of sulphur will not impact the entire spring application availability of phosphate fertilisers," Pickett said.
"But it may impact some of the production, and it is likely to put further upwards pressure on Chinese domestic prices." A Chinese raw materials trader based in Oman said that sulphur shipments from the region were currently struggling to leave the Gulf, while freight rates continued to climb.
"Freight costs have now risen to 3,000 yuan ($435) per container," she said, asking not to be named due to the sensitivity of the matter.
"We received several inquiries today, but trade here has basically been suspended. Most domestic buyers have long-term procurement agreements with the major suppliers here, and I expect their shipments have also been halted." Another buyer based in China's southern Guangxi region, surnamed Tan, said sulphur was already in short supply.
"It is currently impossible to find sulphur at a reasonable price. Supply is tight everywhere," he said.
Liu Zhenpeng, an analyst at Chinese commodities research firm Sublime China Information, said sulphur prices in both domestic markets and ports had already risen, but the overall impact remained manageable for now.
"Phosphate fertiliser producers typically maintain one to one-and-a-half months of raw material inventories," Liu said.
"Since sulphur prices started rising in 2025, major fertiliser producers have also strengthened long-term contracts with sulphur and sulphuric acid suppliers to ensure stable production during the spring planting season." But the tensions in the Middle East could also affect the sulphur market in other ways, Liu cautioned.
As sulphur is a by-product of oil refining, further disruptions to oil and gas shipments that reduce operating rates at regional refineries would also push down sulphur output. That, in turn, would tighten global sulphur supply and push up prices, according to Liu.
China imported nearly 5.4 million tonnes of sulphur last year from six Gulf nations - the United Arab Emirates, Oman, Saudi Arabia, Kuwait, Qatar and Iran - which made up 55.7 per cent of the country's total annual imports, Chinese customs data showed.
In February, the National Development and Reform CommissionChina's top economic planner - pledged it would ensure adequate fertiliser supply and stable prices during the spring planting season and throughout the year.
The commission said it would ensure fertiliser producers got priority access to domestic sulphur supplies, while domestic ports would give priority access to ships carrying imported sulphur and other fertiliser inputs.
Source: Qatar Tribune