Sulfoxide chloride: From a conventional chemical to a key component in new energy technologies, with prices doubling

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In less than a year, the price of thionyl chloride rose from 1,700 yuan per ton to over 3,500 yuan per ton. From being a common chemical used for decades in traditional fields such as pesticides, pharmaceuticals, and dyes, to becoming a key raw material in the lithium battery industry, which is related to new energy batteries, thionyl chloride has emerged as a surprise star in the chemical industry. I. Areas of application: (I) Traditional applications: 1. In the pharmaceutical sector, it is used to synthesize various drug intermediates, such as indomethacin and vitamin A. 2. In the pesticide industry, it is used to produce insecticides like cypermethrin and fenitrothion. 3. In the food industry, it serves as a key ingredient in the artificial sweetener sucralose ； 4. In the dye industry, it is used as a chlorinating agent in the synthesis of dyes and their intermediates. (II) Emerging key areas: Sulfuryl chloride is a key raw material for the production of lithium bisfluorosulfonylimide (LiFSI) in lithium battery materials. Approximately 1.6–2.5 tons of thionyl chloride are consumed per ton of LiFSI. LiFSI is a new type of lithium salt electrolyte that boasts high electrical conductivity, excellent chemical stability, and high thermal stability; it is therefore the preferred lithium salt for use in next-generation electrolytes. By 2024, the capacity for producing LiFSI in China, both currently under construction and planned for future development, had exceeded 250,000 tons. The global demand for LiFSI in 2025 is expected to reach 130,000 tons, which would correspond to a demand for thionyl chloride of over 180,000 tons. The lithium battery industry accounts for 75.7% of this demand. II. Production Technologies (I) Main Production Processes 1. Currently, the dominant method for producing thionyl chloride in China is the gas-phase process using sulfur dioxide. This process involves the continuous synthesis of thionyl chloride using liquid chlorine, sulfur, and sulfur dioxide as primary raw materials, with the aid of activated carbon as a catalyst. This process enables large-scale production, with virtually no emissions of waste substances during the process; the yield of the product is 100%. By 2026, the capacity utilizing this process will account for 65% of the total domestic capacity. Additionally, in industrial settings, thionyl chloride is also produced through the reaction of sulfur trioxide and sulfur dichloride: SO3 + SCl2 → SOCl2 + SO2. (II) Processes being phased out: The chlorosulfonic acid method suffers from issues such as low product purity, the generation of large amounts of mixed exhaust gases containing hydrochloric acid and sulfur dioxide that are difficult to separate, and severe equipment corrosion. As a result, its share of total production capacity has dropped from 28% in 2025 to 22% in 2026. (III) Major manufacturers and industry landscape: (I) Key domestic manufacturers: There are only about a dozen companies in China that produce thionyl chloride, with a total national production capacity of around 565,000 tons. Kaisheng New Materials: China’s largest producer of thionyl chloride, with a production capacity of 150,000 tons per year; the purity of its products meets electronic-grade standards. Jinhe Industry: Has a production capacity of around 80,000 tons per year. In addition, Hehe Chemical, Shilong, and Feixiang Chemical are also major domestic enterprises. (II) International manufacturers: The production capacity for sulfuryl chloride on the international scale is concentrated in a few companies such as Lanxess and SF-Chem. China accounts for over 70% of the global production capacity for thionyl chloride, but its exports account for only about 30%; the market is driven primarily by domestic demand. IV. Market Situation 1. The demand for thionyl chloride is growing rapidly; it reached 604,500 tons in 2024, and is expected to exceed 700,000 tons by 2025. The average annual compound growth rate from 2023 to 2025 is 23.62%. From the perspective of downstream structures, by 2026, the demand related to the new energy sector will reach 260,000 tons, accounting for 47.8% of the total demand ； The pesticide industry has a demand of 174,000 tons, accounting for 32.1% ； The pharmaceutical industry has a demand of 99,000 tons, accounting for 18.2%. In 2024, China’s production capacity for thionyl chloride was 595,000 tons, with actual production amounting to 353,000 tons. In 2021, thionyl chloride was listed as a product with high environmental risks in the Comprehensive List of Environmental Protection Measures; as a result, the cost associated with environmental protection has risen from 3% five years ago to 8%-10% now. 3. The global total production capacity for sulfuryl chloride is approximately 500,000 tons, while the effective domestic production capacity is around 385,000 tons; there will be a supply-demand gap of about 20,000 tons by 2026. 4. According to market price data, from August to December 2025, the average price of sulfuryl chloride rose from around 1,765 yuan per ton to 3,000–3,500 yuan per ton. In January 2026, the mainstream pricing range in Shandong was 1,740–2,800 yuan per ton, with high-quality products selling for over 2,800 yuan per ton. As of April 2026, the price of battery-grade products is between 3,200 and 4,100 yuan per ton, while the price of industrial-grade products is between 2,800 and 3,100 yuan per ton. 5. Sulfur is one of the key raw materials; by 2025, its price rose by over 130%, reaching 3,500 yuan per ton. Just sulfur alone increased the unit cost of sulfoxide chloride by approximately 283 yuan. In the cost structure of thionyl chloride, direct materials account for over 86%, of which liquid chlorine makes up 43.7%, sulfur accounts for 11.2%, and sulfur dioxide accounts for 14.9%. V. Development Trends 1. Stricter environmental policies are driving the phasing out of traditional, highly polluting manufacturing processes. As the most advanced process, the sulfur dioxide gas-phase method utilizes a closed-loop reaction system and exhaust gas absorption devices to achieve near-zero emissions of pollutants; it is expected that the average recovery rate of by-products in this industry will rise above 95% by 2027. 2) Smaller and medium-sized enterprises are exiting the market due to shortcomings in environmental protection and technology, with 120,000 tons of production capacity being included in the phase-out list between 2024 and 2026. 3) At present, high-purity (≥99.9%) electronic-grade thionyl chloride still relies on imports, and leading companies are accelerating the development of related projects. 4. China accounts for over 70% of the global production capacity for thionyl chloride, but its share in exports is only around 30%. As international environmental standards converge, the cost advantages and technical capabilities of domestic enterprises will drive export growth; it is expected that exports will increase by 25% in 2026 compared to 2025, with shipments primarily going to markets where local production capacity is insufficient, such as the European Union and Southeast Asia. As a traditional chemical intermediate, thionyl chloride has seen significant opportunities due to the development of new materials for lithium batteries. The expansion of LiFSI will continue to boost demand, while the upgrading of this product to higher-purity grades suitable for use in batteries results in a substantial increase in its added value ； At the same time, due to strict environmental regulations, output growth lags behind demand growth. It is expected that a tight supply-demand balance will persist, prices will fluctuate at high levels, and the industry’s benefits will continue.