Global Fertilizer Market Weekly Update (CW27) | June 23-29, 2026

Hormuz Shipping Recovers | Sulfur Drops Sharply While Sulfuric Acid Rises | China’s May Potash Import Data | Russia Turns to Gasoline Imports

Fertilizer Shipments Through the Strait of Hormuz Recover, but Urea Prices Remain Under Pressure

According to Argus, since Washington and Tehran announced an agreement on June 15, around 640,000 tonnes of sulfur have passed through the Strait of Hormuz and been shipped to destinations including Indonesia, Morocco and Tanzania. By comparison, only around 80,000 tonnes moved through the strait during the previous three-and-a-half-month period of conflict.

CRU data also shows that since June 15, around 427,000 tonnes of urea have passed through the strait, higher than the 275,000 tonnes recorded during the conflict period. Shipments of phosphates, ammonia and other fertilizer-related raw materials have also increased.

However, more than 500 vessels are still reportedly stranded in the Persian Gulf. Although shipping activity has recovered recently, it remains far below the pre-conflict level of around 125 vessels per day.

From a market perspective, urea shipments are still much lower than sulfur shipments. However, the recovery in Middle East urea exports coincides with China’s release of urea export quotas. The combined increase in supply has accelerated the decline in international urea prices.

Compared with Chinese urea, Middle East urea has a clear cost advantage. As the Strait of Hormuz gradually resumes operations, Middle East urea may continue to put pressure on global urea prices.

That said, the stability of future passage through the strait remains uncertain. On June 26, U.S. Central Command stated that it had carried out strikes against Iranian targets in response to an attack on a merchant vessel passing through the Strait of Hormuz the previous day. Iran’s Islamic Revolutionary Guard Corps later stated that the United States had violated its commitments and launched a counterstrike against U.S. positions in the region.

This shows that U.S.–Iran relations remain in a state of neither full war nor full peace. While transportation through the Strait of Hormuz has partially recovered, geopolitical risks have not disappeared.

For China, this may represent an important window for urea exports. On one hand, international urea prices are already under downward pressure. On the other hand, the recovery of Middle East supply remains uncertain, which may still create short-term market opportunities.

Why Is Sulfuric Acid Rising While Sulfur Prices Are Falling?

Since mid-June 2026, China’s sulfur prices have dropped sharply from their annual highs, with a weekly decline of more than 20%. As of June 18, high-end port sulfur prices had fallen from around RMB 11,750/tonne to about RMB 9,400/tonne, while some inland prices dropped below RMB 9,000/tonne.

In contrast, domestic 98% industrial sulfuric acid prices in China did not fall. Instead, prices remained firmly above RMB 2,000/tonne and continued to rise slightly. This clear divergence between sulfur and sulfuric acid suggests that the traditional logic of “sulfur prices directly driving sulfuric acid prices” is no longer fully effective.

1. Supply Structure Has Changed, and Smelter Acid Now Plays a Leading Role

In the past, sulfuric acid prices were mainly influenced by the cost of sulfur-based acid production. Today, China’s sulfuric acid supply structure has changed significantly.

Smelter acid has become a major source of domestic sulfuric acid supply, accounting for roughly 60% of total supply. Its pricing depends more on smelter profitability, inventory levels and market supply conditions than on sulfur price movements alone.

This year, copper concentrate treatment charges have remained low, putting pressure on smelters’ core operations. As a result, by-product sulfuric acid has become an important profit source. Therefore, even though sulfur prices have fallen, smelter acid producers have little incentive to reduce prices.

At the same time, some sulfur-based acid producers have cut output due to earlier losses caused by high raw material costs, while smelters have also reduced production due to maintenance. This “dual supply contraction” has further supported sulfuric acid prices.

2. New Energy Demand Offsets the Traditional Off-Season

The second quarter is usually a traditional off-season for phosphate fertilizers, during which sulfuric acid prices tend to face downward pressure. However, downstream demand has changed this year, with the new energy sector becoming an important support factor.

Lithium iron phosphate and hydrometallurgical nickel projects are generating stable sulfuric acid demand. These sectors mainly rely on long-term rigid demand orders, with relatively low price sensitivity. Stable operating rates in the power battery industry and the start-up of overseas hydrometallurgical nickel projects have continued to absorb sulfuric acid supply.

At the same time, agricultural demand still exists as downstream fertilizer producers maintain low-load production and purchase on demand. Traditional sectors such as titanium dioxide, chemical fibers and metal pickling also remain relatively stable. Together, these sectors continue to support high sulfuric acid prices.

3. Pricing Logic Has Shifted: Supply and Demand Now Matter More Than Cost

The sulfuric acid market has shifted from “sulfur-cost-based pricing” to a new model of “supply-demand-led pricing with cost support.”

Although sulfur prices have fallen, spot sulfuric acid supply remains tight, and acid plant inventories are generally low. Producers have little pressure to cut prices for destocking. A market consensus of “no low-price sales” has formed, providing strong price support.

In addition, sulfur import arrivals have declined, and some sulfur-based acid units have reduced operating rates or stopped production due to tight raw material supply. Meanwhile, higher mining and transportation costs for pyrite have also lifted the cost of pyrite-based acid. As a result, the overall cost floor for sulfuric acid has moved higher.

Outlook

In the short term, falling sulfur prices are unlikely to directly drag sulfuric acid prices lower. As long as sulfuric acid supply remains tight, inventories stay low, and demand from new energy and agriculture remains supportive, sulfuric acid prices are likely to stay high and fluctuate within a narrow range.

This divergence between sulfur and sulfuric acid is not a short-term abnormality, but a reflection of structural changes in supply and demand. Going forward, sulfuric acid market analysis should not rely only on sulfur prices. Smelter acid supply, sulfur-based acid operating rates, new energy demand, agricultural stocking activity and inventory levels must all be considered.

China’s May Potash Import Data and the Outlook for Future Imports

In May 2026, China imported 1.61 million tonnes of potash, the highest monthly volume in the first five months of the year. Major sources included Russia with 560,000 tonnes, Laos with 360,000 tonnes, Belarus with 270,000 tonnes, Canada with 250,000 tonnes, as well as Israel, Jordan, Uzbekistan and Spain.

The sharp increase in May potash imports was mainly driven by the following factors.

1. Imports from Non-Contract Countries Increased Significantly

In May, China imported 363,000 tonnes of potash from Laos, a record monthly high and around 150,000 tonnes above the normal level. Given that Laos has total potash capacity of around 4 million tonnes per year, monthly exports of more than 360,000 tonnes to China are close to its entire monthly output.

At the same time, China imported 23,000 tonnes from Uzbekistan, more than 10,000 tonnes above the normal level. Imports from Spain reached 38,000 tonnes, which has rarely occurred in the past.

Overall, imports from non-major-contract countries increased by around 200,000 tonnes compared with normal levels, making this an important reason behind the strong May import volume.

2. Border Trade Remained High

China’s small-scale border trade in potash reached 237,000 tonnes in May, remaining at a high level and providing an important supplement to seaborne potash imports.

3. General Trade Imports Stayed Elevated

Potash imports under general trade reached 1.35 million tonnes in May, also remaining high. The continuous increase in imports during the first five months has pushed port inventories higher.

If future imports continue at the average level of the first five months, around 1.48 million tonnes per month, domestic oversupply pressure will increase further, and downward price pressure will become difficult to avoid.

Future Import Outlook

First, imports from non-major-contract countries may decline significantly. In May, imports from Laos, Uzbekistan and Spain all reached historically high levels. It is unlikely that these sources will maintain such high shipment volumes in the coming months.

Second, India’s potash contract may ease China’s import pressure. India did not conclude its annual potash import contract until mid-May. Before that, international suppliers were more willing to ship to China in order to support global potash prices. This was one of the key reasons behind China’s strong import volume in the first five months.

With India’s contract now in place, international suppliers are expected to prioritize shipments to India in the third quarter, which may reduce China’s import pressure.

Third, potash demand from Indonesia and Malaysia may increase. Indonesia is scheduled to officially implement its B50 biodiesel program on July 1, while Malaysia started implementing its B15 biodiesel program in June. Driven by palm oil plantation demand, potash imports from Indonesia and Malaysia may increase, diverting part of the international supply.

Overall, China’s high May potash import volume was mainly driven by increased non-contract supply, active border trade and high general trade volumes.

However, entering the third quarter, China’s potash imports may decline noticeably from the first-half level as non-contract supply falls back, India begins procurement, and Southeast Asian demand increases. This could help ease domestic oversupply pressure and provide some support to potash prices.

Russia Turns to Gasoline Imports Again

Affected by Ukrainian drone attacks, several large refineries in central Russia, including the Moscow refinery and TANECO, have reportedly suspended or reduced production. As a result, gasoline output in late June fell sharply by around 25% year on year.

In late June 2026, Russia urgently sought to import around 50,000 tonnes of AI-92 gasoline from Kazakhstan to ease severe fuel shortages caused by refinery damage.

According to market statistics, 16 refinery facilities were attacked in May alone, while at least another six were hit in June. The frequent attacks have pushed Russia’s refining capacity down to the lowest level in two decades.

Fuel shortages have spread from Crimea to eastern regions and even to Omsk Oblast near the Kazakhstan border. More than ten regions have reported tight fuel supply. In Sevastopol, Crimea, local authorities were forced to restrict public transport, shorten store opening hours and dim streetlights to save energy. The Omsk regional government directly limited gasoline and diesel sales to prevent panic buying. Long queues formed at filling stations, and refined fuel prices surged.

Russia’s shift from a major refined oil exporter to a fuel importer may be changing the direction of the war.

For the fertilizer market, while the reopening of the Strait of Hormuz may create downward pressure on sulfur prices, it is important to remember that the sharp rise in sulfur prices during this cycle was triggered by Russia’s shift from a sulfur exporter to a sulfur importer last October.

Therefore, sulfur market analysis should not focus only on Middle East logistics. Russia’s energy infrastructure damage, refined fuel shortages and sulfur trade balance may continue to influence the global sulfur and fertilizer raw material markets.

Global Fertilizer Market Weekly Update (CW27) | June 23-29, 2026