Middle East Conflict: Compounding Policy and Supply-Side Challenges in Global Sulfur Markets

Sulfur Prices Surge in China Amid Middle East Tensions

Sulfur prices in China jumped sharply this week amid escalating geopolitical tensions in the Middle East. The Middle East is a major supplier of sulfur globally and China relies on imports from countries such as Iran and the United Arab Emirates. Key trade lanes have been cut off, limiting supply and triggering concerns that higher sulfur costs will cascade into downstream animal nutrition inputs, sources shared.  

The move is already reflected in the sulfuric acid market, as production cost pressure builds up for sulfate-based trace minerals such as manganese and zinc sulfate, according to a Chinese producer.  

A China-based trader shared that Chinese sulfur values rose RMB 160/MT from February 27 to this Tuesday and increased a further RMB 150/MT by close of business (COB) March 4, representing an 8% increase in less than a week. 

A Chinese trace mineral producer stated that domestic Chinese sulfur values have risen RMB 200/metric tons (MT) since the beginning of 2026 in the Southwest region of China.  

“It is quite concerning,” the exporter said, adding that expectations for further increases have lifted sulfuric acid prices, directly impacting manganese and zinc sulfate production costs.  

A Brazilian manganese sulfate producer echoed the view, cautioning that a sustained sulfur price rally in China could quickly tighten margins across the sulfate market and compel near term FOB price hikes. 

Global Supply Constraints and Policy Impacts

While the Middle East conflict has accelerated the latest price uptick, the market is no stranger to policy-driven and supply-side constraints. 

Global sulfuric acid values have been on a sharp upward trend since the beginning of the year as the Chinese government introduced a 700,000 MT export quota for the January to April 2026 period, nearly 50% lower than the same period in 2025. Sources shared that priority would be given to ensuring Chinese domestic supply and that exports may be permitted in limited quantities when the export price exceeds the domestic price. 

Meanwhile, Russian exports remain absent from international markets, with an export ban in place until March 31. 

A significant global sulfur supply shock emerged in anuary 2026 when Tengizchevroil (TCO) was forced to halt production at its Kazakhstan’s Tengiz oilfield after a power station fire. The force majeure on crude exports from the plant has not yet been lifted, creating a current supply lag before sulfur volumes return to the market. 

Brazil’s Domestic Production Challenges

In Brazil, the cost and availability picture has been further complicated by reduced domestic sulfuric acid supply.  

A Brazilian copper sulfate producer said conditions have become “complicated” since Yara stopped producing sulfuric acid locally, leaving only three other producers operational. Some of those remaining suppliers are integrated into value-added products such as feed phosphates and trace minerals, limiting availability for other sulfate producers, the source said. 

Imports have “traditionally not been very reliable,” the producer added. 

Yara confirmed it began hibernating its phosphate fertilizer and sulfuric acid production at its Cubatão and Paulínia facilities back in February 2025, with the process originally expected to conclude by the end of 2025.  

Market sources now report they are no longer receiving material from Yara. The company said the decision aligns with its long-term strategy to focus on nitrogen-based fertilizers and sustainable solutions instead. 

Impact on Feed Phosphate Markets

Rising sulfur costs are also impacting feed phosphates by increasing the incentive for phosphate suppliers to lift prices. Similarly to sulfuric acid, China has temporarily halted DAP, MAP and NP exports until August 2026, pointing to tighter global phosphoric acid availability in 2026. 

Some feed phosphate producers reported in February that phosphoric acid contract costs rose by $20–$30/MT, despite a rollover of the first Q1 2026 global contract between Coromandel International Limited and Nutrien. 

In Brazil, DCP buyers reported difficulty obtaining Q2 prices last week as offers from major suppliers were absent. 

Multiple sources flagged the risk of a Q2 price jump of 20–34% amid higher sulfur costs and ongoing local sulfuric acid tightness. These developments were already underway prior to the Middle East conflict, sources now expect continued uncertainty on Q2 feed phosphates prices.  

Meanwhile, DCP stock levels continue to be reported as adequate, and buyer behavior muted as Chinese import volumes were above historical averages in 2025. 

Some Chinese DCP manufacturers were yet to release new offers to the Brazilian market this week after the Chinese Lunar New Year holiday closure. Other sellers had decided to pause quotations and take on fresh orders following the Middle East conflict, sources said.

Image source: Adobe