China is the major importer and consumer of sulphur worldwide. In 2016, China consumption of sulphur fertilizer and sulphur in other sectors was over a quarter of global demand which was about 27%. China took 11.96 Mt of elemental sulphur on 2016 – significantly more than the 6.09 MT which was taken by the US or the 5.04 MT taken by Morocco, the next two most significant sulphur buyers. It is important to note that any change in China’s local consumption is a significant consideration for the global sulphur market due to the size of China’s import requirement, maintaining a major influence on global benchmark.
However, China’s sulphur market is quickly evolving, with major changes in both supply and demand. Sulphur demand of China’s phosphate sector, which supports much of the country’s sulphur imports has grown fast over the last decades and now is reaching a state of little or no change. Growth rates for demand in China are not expected to see levels which were seen in recent decades as prospects for processed phosphates capacity additions are limited. Furthermore, demand of sulphur for sulphuric acid production is coming under growing competition due to the rapid expansion of China’s involuntary sulphuric acid manufacturing from metals smelters.
On the supply side, the boost of oil and gas manufacturing in China also raises questions on how sulphur trade may be influenced in the future. Energy production in China has been growing recently across the oil and gas sectors which are leading to a boost in domestic sulphur recovery. For example improvements in Sichuan province have significantly increased the sulphur production capacity. It is estimated that sulphur recovery will grow in next 5 years and will see an increase of 72% in this period. Therefore it is a question that whether sulphur import will remain as powerful as it currently is or not. But it is estimated that China’s elemental sulphur import is likely to significantly decrease over the coming years which has major implications for the global sulphur market.