Yang Jianyun, Sinopec Refinery Product Sales Co., Ltd.

With the development of national economy, especially the booming of chemical fertilizer industry, China’s demand for sulfur has been growing. So has been the sulfur output due to the growth in the extraction of natural gas and the crude oil processing, and the import dependency has dropped from over 90% to about 50%. Recently, the production of phosphate fertilizer has fallen back from the high level, the output of titanium dioxide is increasing steadily, the capacity of smelting gas based acid has been growing, and the apparent consumption of domestic sulfur starts to drop after hitting highs.

China’s sulfur product standard and major applications

Sulfur products can be roughly classified into industry sulfur, food additive sulfur and special sulfur (like insoluble sulfur).

1. Industrial sulfur

Solid industrial sulfur’s standard is GB/T 2449.1-2014, while the liquid industrial sulfur’s is GB/T 2449.2-2015, with sulfur content ≥99%. They are divided into grades of superior, first grade and qualified according to their sulfur and impurity contents. This standard applies to sulfur recovered from natural gas and petroleum refinery gas, as well as recycled from coke oven gas and made from ferro sulfide ore. Industrial sulfur is mainly applied to sulfuric acid production, before the reaction with phosphate ore and titanium ore to make phosphate fertilizer, titanium dioxide, etc., or before being made into solvent and catalyst. Industrial sulfur can also be used directly to make carbon disulfide, fireworks, explosives, etc., or reprocessed into special sulfur like food sulfur and insoluble sulfur.

2. Food additive sulfur

The standard for food additive sulfur is GB 3150-2010 National Standard for Food Safety Food Additive Sulfur, with the sulfur content ≥99.9%. The index is basically the same as industrial sulfur superior grade. It is mainly used in the food processing industry such as bleaching of cane sugar.

3. Insoluble sulfur

The standard of insoluble sulfur is HG/T 2525-2011 of chemical industry. There are oil-filled type and non-oil-filled type. For the non-oil-filed, the sulfur with content ≥60% is grade IS60 and those with content ≥90% is grade IS90. For the oil-filled sulfur, there are four grades depending on the insoluble sulfur content and oil content. The oil-filled sulfur means they are filled with 4% to 34% special oil and are applied to rubber industry. The non-oil-filled insoluble sulfur are used in chemical fiber industry.

China’s sulfur capacity and production

China’s sulfur products have gradually shifted from sulfur iron ore-based to natural gas purification and refinery gas recovery-based, plus a small amount of coal chemical recovery. Sulfur in sulfur iron ore and metal smelting flue gas are basically made directly into sulfuric acid.

1. Sulfur capacity

China’s sulfur capacity and production have been expanding rapidly thanks to the enhancement of sulfur-bearing natural gas extraction capacity in Southwest China and the imported sulfur-bearing crude oil processing capacity. Rough statistics show that the domestic sulfur capacity hiked from 2014’s 7.9 million t/a to 2018’s 10 million t/a and 2021’s 15.41 million t/a. China’s sulfur capacities since 2014 are showed in Chart 1.

Chart 1 China’s sulfur capacities, 2014-2021

2. Sulfur output

China’s sulfur output barely increased before 2019, and suddenly jumped up to 3 million tons in 2010 after the large-scale development of Puguang gas field, representing a YoY growth of 115%. The figure reached 5 million tons in 2013 and over 8 million tons in 2021. See Table 1 for details. 

Sulfur imports & exports

China built over 10 acid units with sulfur imports as raw materials in 1970’s, which were all forced to shut down due to import sulfur price rise after 1979. The industry restarted in 1995, pushing up the import volume, which was only tens of thousands of tons before 1993 and then rose to over 100 000 tons in 1994 and 1995, 400 000 tons in 1996, 2 million tons in 1999, over 4 million tons in 2002, 8 million tons in 2005, 10 million tons in 2009, and finally dropped to below 9 million tons in 2020. 

The export amount, however, is only several hundreds or thousands of tons each year, with surrounding countries and areas as the target markets.

China’s sulfur consumption 

1. Apparent consumption

Along with the rapid development of phosphate fertilizer, China has become a big sulfur consumer. The growth in demand exceeds that in output, leaving the import dependency to a high level of over 90% once and of 50% in 2021. Table 2 gives details of the apparent consumption since 2005. 

2. Derivatives

In China, about 90% of the sulfur are applied to the manufacturing of sulfuric acid. According to SCI statistics, sulfur downstream industries’ consumptions in 2021 are shown in Chart 2. 

Chart 2 China’s sulfur derivatives in 2021

3. Prices

Import sulfur prices represent the market mainstream due to the large market shares they occupy. See Chart 3 for import volumes and prices since 2014.

Chart 3 China’s sulfur import volume and prices, 2014-2021

Market analysis

Sulfur, via the form of sulfuric acid, enters downstream industries such as phosphate fertilizer, titanium dioxide, caprolactam, food acid and MSG. Only about 10% of sulfur are directly applied to downstream in the form of industrial or special sulfur. Therefore, the sulfuric acid market largely reflects the sulfur market pattern.

1. Domestic sulfuric acid market

(1) Capacity and production

Before 1995, about 80% of the sulfuric acid were made from sulfurous iron ore, while after 2002, the sulfur-based sulfuric acid production started its rapid development thanks to the advantages of the saving of investment, short construction period, convenient operation, low-cost public works, relatively environmentally friendly, and the by-production of steam and power generation. By the end of 2004, China has had 44.3 million t/a sulfuric acid capacity, with sulfur-based taking 40%. In 2019, the total capacity reached 124 million t/a, and the smelting gas-based acid increased to 35.6%. The proportion of sulfurous iron ore kept shrinking. Detailed changes in capacities and outputs are shown in Table 2.

(2) Downstream distribution

In recent years, fertilizer consumption has been accounting for about 60% of the total domestic sulfuric acid consumption. In 2019, the apparent consumption of sulfuric acid in China was 95.72 million tons, of which fertilizer took up 57.1% and industrial use 42.9%. The consumption structure of industrial acid is shown in Chart 4.

Chart 4 China’s industrial acid consumption structure in 2019

(3) Prices

Table 3 shows that the sulfuric acid prices fluctuated largely in recent years, same as sulfur. However, its ups and downs were larger that those of sulfur, and the gross profits of sulfur to acid were negative in 2020. 

2. Phosphate fertilizer production fell

The output, export volume and average domestic price of monoammonium phosphate and diammonium phosphate in the past 5 years are shown in Chart 5 and Chart 6. The price trends of the two are both N-shaped. The production of monoammonium phosphate is V-shaped, returning to the level of 2017 in 2021, and the export volume has been generally growing. The production of diammonium phosphate is decreasing, and the export trend is N-shaped, returning to the level of 2017 in 2021. The total output of monoammonium phosphate and diammonium phosphate in 2019 totaled 2 422 tons. According to SCI’s calculation method, if all of them are made from sulfuric acid, the consumption of sulfur should be 10.9 million tons, which is quite different from the algorithm of 100% P2O5.

Chart 5 China’s monoammonium phosphate outputs, exports and average domestic   prices, 2017-2021

Chart 6 China’s diammonium phosphate outputs, exports and average domestic prices, 2017-2021

3. Steady growth of titanium dioxide production

     China’s titanium dioxide outputs, exports and average domestic prices since 2017 are shown in Chart 7. The outputs and exports were increasing each year, reaching 3.79 million tons and 1.31 million tons respectively in 2021. The price trend is V-shaved, with the bottom in 2020 and a rebound in 2021. 

Chart 7 China’s titanium dioxide outputs, exports and average domestic prices,        2017-2021