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中文China is the world’s largest importer of sulfur. Due to insufficient domestic resources and industrial structure, the country has long maintained a high external dependence on sulfur and certain sulfur chemical derivatives, with the Middle East being the core source of imports. However, the recent escalation of conflicts in the Middle East (especially the disruption of transportation through the Strait of Hormuz caused by the US-Iran conflict) has directly impacted the global sulfur supply chain. This, in turn, has transmitted shocks to China’s sulfur and downstream sulfur chemical derivative markets, causing a series of fluctuations in supply, prices, and market dynamics.
**A Key Component for All-Solid-State Batteries: Lithium Sulfide (Li₂S)**
In recent years, the rapid expansion of the new energy industry has significantly increased the application of sulfur in materials like those used in batteries. All-solid-state batteries are considered a crucial future direction for battery technology. Among these, the sulfide electrolyte route, seen as the most promising for industrialization, has become a core focus of industry research. Mainstream battery companies such as CATL, BYD, and Gotion High-tech are concentrating on this path,are fully dedicating resources to R&D and technological breakthroughs.
Currently, there are two main technological processes for producing sulfide solid-state electrolytes:
1. Sulfur reacts with sulfuric acid and lithium compounds to form lithium sulfide.
2. Sulfur is converted to hydrogen sulfide, which then reacts with a lithium source to form high-purity lithium sulfide.
As the core precursor for sulfide solid-state electrolytes, lithium sulfide (Li₂S) directly determines the performance, production cost, and reliability of the battery cell. The functions and roles of lithium sulfide include:
* **Lithium Source Provision:** As the sole source of lithium ions in electrolyte synthesis, it directly determines the lithium ion concentration in the electrolyte, thereby affecting lithium ion conduction efficiency and battery capacity.
* **Structural Framework:** The interconnected tetrahedral structural units within lithium sulfide form a three-dimensional lithium ion conduction network, which is the fundamental basis for the electrolyte’s high ionic conductivity.
* **Defect Control:** By adjusting the ratio of lithium sulfide, lithium ion conduction pathways can be optimized, reducing migration resistance.
* **Interface Stability:** High-purity lithium sulfide reduces the probability of side reactions between the electrolyte and the lithium metal anode, extending the battery’s cycle life.
The large-scale production of lithium sulfide is key to the mass production of sulfide solid-state batteries. Although mass production of lithium sulfide still faces numerous technical challenges, several domestic companies in China have achieved breakthroughs through continuous technological efforts and have now entered the stage of small-scale production.
According to public information, domestic companies that have achieved small-scale production or are in the pilot stage mainly include: Guanghua Technology, XTC New Energy Materials, Shanghai Xiba, Ganfeng Lithium, Tianqi Lithium, Tinci Materials, SEMCORP, Sichuan All-Solid-State New Materials, Suzhou Yunhuo Technology, Xiamen Guna New Energy, Xiamen Kaina Graphene, HSC New Energy Materials, and Haichen Pharmaceutical.
**Impact of Hindered Sulfur Imports**
Current global sulfur production capacity is approximately 85 million tons, with the industry operating near full capacity but showing limited incremental growth. Annual output is around 80-82 million tons, with a year-on-year growth rate of only about 2%, slowing further from the approximately 4% growth rate in 2024.
The Middle East is the core of global sulfur supply (with the region’s output accounting for over 30% of the global total). Some of its resources are prioritized for local markets and emerging markets like Indonesia (via long-term contracts and price-driven diversion), severely diverting resources away from traditional demand countries and intensifying supply tightness. Meanwhile, Russia, a key global sulfur producer, has shifted from a net exporter to a net importer due to the Russia-Ukraine war,continuous tightening globally available sulfur resources and driving up sulfur prices.
Due to the US-Iran conflict, Iranian refineries have halted production, and cargoes cannot be shipped from Middle Eastern ports, leading to a significant reduction in import volumes. Imports decreased from 850,000-900,000 tons per month in January to 450,000-550,000 tons per month in March, a drop of 40%-50%. Approximately 50% of Iranian sulfur orders for March could not be delivered.
Due to the supply disruption in the Middle East, obstructed transport through the Strait of Hormuz, shipowners suspending voyages, soaring insurance premiums, and panic buying, sulfur prices rose from 3,910 RMB/ton in January to 4,400 RMB/ton in March, an increase of 12.53%, with a single-day highest increase of 230 RMB/ton.
**China’s Sulfur Supply**
China’s sulfur supply sources primarily consist of three pathways: recovery as a byproduct of oil refining, mining from pyrite (iron sulfide ore), and development of native sulfur deposits. Recovery from oil refining dominates, while the proportions from pyrite and native sulfur are relatively low.
* **Refining Byproduct Recovery:** This is the most significant source of sulfur in China. With the expansion of the domestic refining industry and the improvement of clean fuel standards, the volume of sulfur recovered during petroleum refining desulfurization processes has increased annually. It is reported that in 2025, the domestic sulfur market concentration is high, with leading firms firmly holding dominant positions. Looking at capacity distribution: Sinopec (8.34 million tons/year), PetroChina (3.68 million tons/year), and Rongsheng Petrochemical (1.21 million tons/year) firmly hold the top three spots, with a combined capacity of 13.23 million tons, accounting for over 70% of national capacity and forming the core supply force in the market.
* **Pyrite Mining:** Pyrite constitutes an important component of China’s sulfur resources, with total reserves of approximately 13 billion tons, widely distributed but with significant variations in grade. The Yunfu Pyrite Mine in Guangdong is the largest open-pit pyrite mine in China, with reserves of 208 million tons and an average sulfur grade of 31.04%. Its annual raw ore processing capacity reaches 3 million tons, producing 1.4 million tons of sulfur concentrate annually. Mines like those in Ma’anshan (Anhui) and Dongshengmiao (Inner Mongolia) also have certain production capacities, but overall development and utilization levels have been affected by environmental policies and production costs, leading to slow output growth in recent years. The process of producing sulfur from pyrite is relatively complex and involves certain environmental pollution issues. When sulfur supply from refining byproducts is sufficient, the market share of pyrite-based sulfur has gradually shrunk, currently accounting for only about 10% of domestic sulfur production.
* **Native Sulfur Development:** Native sulfur resources are relatively scarce in China, with low levels of development and utilization. They are mainly distributed in Xinjiang, Gansu, and other places. Xinjiang’s sulfur resource reserves are estimated at around 200 million tons, but the grade is low, with an average sulfur content of less than 15%, making extraction costs high. The Baiyin area in Gansu also has small amounts of native sulfur resources, but large-scale development has not yet been achieved. Due to high technical requirements and poor economics associated with native sulfur extraction, its current output accounts for less than 1% of domestic sulfur production, contributing minimally to supply.
**Major Domestic Sulfur Producers:**
* **Sinopec:** The leading domestic sulfur producer, with an annual sulfur capacity of 8.34 million tons, accounting for 46.2% of national capacity and firmly holding the top market share in China.
* **PetroChina:** The second-largest domestic sulfur producer, with an annual capacity of 3.68 million tons, representing 20.4% of national capacity. Relying on the country’s largest natural gas extraction and refining capacities, its sulfur supply is stable.
* **Rongsheng Petrochemical:** A leading private refining company, ranking third domestically with an annual sulfur capacity of 1.21 million tons, leveraging its Zhejiang Petroleum Refining & Chemical complex with 40 million tons of integrated refining and chemical capacity for significant cost advantages.
* **Eastern Shenghong (东方盛虹):** A core private refining enterprise with an annual sulfur capacity of 600,000 tons, featuring comprehensive upstream and downstream integration.
* **Hengli Petrochemical:** Holds a considerable sulfur production capacity.
* **Yuegui Guangdong (粤桂股份):** Possesses pyrite raw ore production capacity of 1.2 million tons/year.
* **Liuguo Chemical (六国化工):** Holds advantages in pyrite resources.
* **Huilong Holdings (辉隆股份):** Features a well-established pyrite industry chain layout.
