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Affected by rising prices of raw sulfur, the sulfuric acid market has seen a significant increase recently, with an overall rise of 63.9%. Entering late December, sulfur prices began to fall, with the prices of acid produced in regions such as Shandong and Yunnan being reduced first. On December 26, the price of sulfuric acid in Shandong’s main production areas dropped to 960 yuan, a decrease of 8.13% ； The ex-factory price of metallurgical acid produced by Henan Guotou Jincheng is 880 yuan, while the ex-factory price of metallurgical acid produced in Mengzi, Yunnan has been reduced to 770 yuan. At present, although the price of sulfuric acid remains high in parts of East China and Central China, the focus of transactions has shifted downward. Multi-factor resonance drives price spikes The sharp rise in sulfuric acid prices in the fourth quarter was the result of a combination of various factors such as costs, supply conditions, and market sentiment; moreover, there were significant differences across different production processes and regional markets. ”Industry insiders explained. From a cost perspective, the soaring price of sulfur is the main driving factor. Sulfur is the key raw material for sulfuric acid production, with an import dependence of nearly 50%. Affected by geopolitical factors, Russia’s sulfur exports have declined significantly, while supplies from the Middle East are shifting to emerging markets such as Indonesia. Domestic port inventories continue to drop, exacerbating the supply shortage. Domestic sulfur prices began to rise in November, and by mid-December they reached a new high of 4,200 yuan, an increase of 130% compared to the beginning of the year. Cost pass-through has driven up sulfuric acid prices, while high prices of pyrite have further strengthened the cost support for ore-based acids. From the supply side, maintenance work on sulfuric acid production facilities in China in November affected an annual processing capacity of around 21.38 million tons. Maintenance activities were particularly intensive in the key production areas of Central and East China, while sulfuric acid plants in Shandong, Liaoning and other regions were shut down for maintenance, resulting in a noticeable reduction in regional supply. In December, many domestic sulfuric acid production facilities still had maintenance plans scheduled, resulting in a slight decline in the supply of sulfuric acid. From the demand side, coastal factories have ample export orders, and some sulfuric acid supplies are directed to the international market, further squeezing domestic supply. Data from the General Administration of Customs show that cumulative sulfuric acid imports in the first 11 months amounted to 118,400 tons, a decrease of 23.21% on a year-on-year basis ； Exports reached 4.1247 million tons, a year-on-year increase of 90.69%. Under the combined impact of rising sulfur prices and tight sulfate supply, buying enthusiasm in the sulfate market increased. Major sulfate producers in various regions worked together to drive up prices; after increases were implemented in key areas such as Central and East China, other regions followed suit, contributing to a continuous rise in sulfate prices across the country. Prices in the main downstream sectors of sulfuric acid, such as phosphate fertilizers, titanium dioxide, and caprolactam, have also risen. Ensuring supply and stabilizing prices: The urgency is fading. The sharp rise in sulfur prices has put pressure on companies that produce sulfuric acid; high prices of sulfuric acid in the East China region have forced these companies to raise their own prices. As a result, the profit margins of downstream phosphate fertilizer manufacturers have been significantly reduced, with some of them ending up in losses. To address the pressures on the industrial chain caused by the soaring global prices of sulfur resources and to ensure a stable supply of fertilizers during the critical period for spring plowing, on December 18, under the guidance of the **Development and Reform Commission, the China Sulfuric Acid Industry Association and the China Phosphorus Fertilizer Industry Association held a special meeting. They demanded that sulfuric acid manufacturers maintain sales prices at the level seen on December 11, and called for reduced exports in order to prioritize domestic supply. “This meeting was not only a measure for emergency response but also drove the sulfuric acid industry to shift from passively coping with rising costs to proactively building resilient supply chains. ”A business manager at Shandong Shenchili Chemical said that on December 19, sulfuric acid producers in Shandong, including Shenchili Chemical, were the first to reduce their prices, thereby alleviating the cost pressures on the downstream phosphate fertilizer industry and laying the foundation for the commitment to maintain stable fertilizer prices during the spring planting season. Luo Luyao, an analyst at Longzhong Information, explained that since the price of sulfuric acid in the domestic market is higher than that on the export market, sulfuric acid exports have declined significantly over the past two months, with production shifting toward meeting domestic demand. In November, the net export of sulfuric acid declined by 47.81% on a year-on-year basis, with the growth rate dropping by 43.71 percentage points compared to October. In December, domestic sulfuric acid producers followed the recommendations made at the meeting; net exports are expected to drop to 190,000 tons, a decrease of around 10% on a month-on-month basis. In the view of Wu Haidi, an analyst at Jinlian Chuang Information, this transformation in the sulfuric acid market represents a turning point in which the various entities along the industry chain shift from operating independently to working together to ensure a stable supply. On the one hand, the domestic supply of sulfuric acid is secured, preventing the risk of a shortage of fertilizers for spring plowing due to exports taking precedence ； On the other hand, smelting acid companies are encouraged to sign long-term purchase and sales agreements with phosphate fertilizer companies in order to establish stable upstream and downstream relationships. Through price control and long-term contract mechanisms, the meeting provided a breather for the industry. “Under the protection of policies aimed at ensuring supply and stabilizing prices, the momentum in the sulfuric acid market is gradually fading. ”Liu Wenqi, an analyst at Longzhong Information, noted that under the influence of various factors such as weakening demand, policy guidance, and differences in costs, the sulfuric acid market is likely to see localized price declines in the short term, with further divergences in price trends across different regions. High-level consolidation and dynamic balance: Liu Wenqi pointed out that although sulfuric acid prices rose and then fell, the operating rate of production facilities remained unchanged; in the third week of December, the operating rate of the sulfuric acid industry was 67.21%. Taking into account various factors such as costs, supply, and policies, it is expected that the sulfuric acid market will remain at high levels in the short term, as it seeks a new balance amid dynamic changes in supply and demand. Industry experts believe that although sulfur prices have declined slightly, the prices of raw materials such as pyrite remain high, providing strong support for sulfate prices at the bottom level. In most regions, acid production plants maintain high prices due to low inventory levels. However, as resistance from downstream users increases, the rise in sulfuric acid prices is likely to slow down in the future. As the largest downstream user of sulfuric acid, the phosphate fertilizer industry currently makes purchases driven by essential needs; as winter fertilization preparations come to an end, expectations for demand support are declining ； The number of enterprises carrying out maintenance work in industries such as titanium dioxide has increased, leading to a decline in operating rates, as well as a reduced willingness to purchase sulfuric acid. Looking ahead, Business Society believes that the sulfuric acid market will enter a short-term adjustment period characterized by stable prices and supply taking precedence. On the one hand, the policy aims to stabilize prices and ensure supply; the previously high acid value is expected to gradually return to a reasonable range ； On the other hand, cost support will still remain, limiting the extent to which prices can fall. In the short term, phosphate fertilizer manufacturers have pledged not to export, the volume of sulfuric acid exports is expected to decline, and the supply-demand balance in the domestic market is likely to be restored. In the long term, the sulfuric acid industry needs to explore diversified raw material sources in order to mitigate the risks associated with fluctuations in sulfur prices.