This week, the international sulfur market as a whole presented a structural differentiation pattern of “price adjustment and cost stability”. Although mainstream exporting countries in the Middle East have slightly lowered their contract prices in September, the actual comprehensive landed costs remain high due to the continued tightening of geopolitical and global tradable spot prices. The global sulfur market is undergoing a profound supply-demand restructuring, and the trend of easy rise but difficult fall in the short term is difficult to reverse.
1、 International Price Dynamics: Deviation between Contract Price Decline and Firm Cost of Arrival
The core contradiction of international sulfur prices this week lies in the deviation between “explicit price reduction” and “implicit cost increase”.
Middle East contract price adjustment: Qatar Energy announced the monthly contract price for sulfur in September 2026, with FOB (offshore price) lowered to $880/ton, a slight decrease of $10/ton from $890/ton in August. This reflects the intention of Middle Eastern exporting countries to alleviate downstream procurement pressure by adjusting prices.
Actual landed costs remain high: Despite some loosening of FOB prices, the continued escalation of geopolitical shipping risks in the Strait of Hormuz has led to a significant increase in ocean insurance surcharges. Based on the August contract price in Kuwait (FOB 865 US dollars/ton), combined with high freight and insurance premiums, the theoretical CFR (cost plus freight) comprehensive landed cost for shipping to ports in southern China has exceeded 1070 US dollars/ton. Geopolitical risk has become the core factor that dominates the actual procurement cost of international sulfur at present.
2、 Global supply pattern: Multiple lockdowns lead to depletion of spot liquidity
Apart from the disruption caused by China Eastern Airlines, the supply of goods in major export regions around the world has simultaneously contracted, further exacerbating the tense global spot market situation
Middle East production capacity damage and shipping obstruction: Due to the continuous escalation of geopolitical conflicts, the refinery capacity of traditional major exporting countries has been damaged by about 30%, and the instability of Middle East sources has led to the depletion of liquidity in the spot market, resulting in frequent occurrences of “price but no market” phenomena. About 45% of the global shipping volume of sulfur passes through the Strait of Hormuz, posing a high risk of physical disruption.
Multi country export control and reflux: In order to prioritize the production of domestic fertilizer enterprises, multiple countries have implemented strict export control measures. Indian refineries voluntarily cease exports to the outside world; Türkiye continued to implement sulfur export control policies, and local spot prices rose significantly; Due to the damage to previous refinery facilities and the extension of export bans until the end of the year, Russia’s exports have continued to decrease. The global available spot quantity has been significantly reduced.
3、 Downstream industrial chain transmission: dual squeezing of fertilizers and new energy
As the absolute core raw material for the production of sulfuric acid and phosphate fertilizers, the high price of sulfur is profoundly affecting the global agricultural and new energy industry chain from top to bottom
Boosting global agricultural fertilization costs: The skyrocketing price of sulfur directly increases the production cost of phosphate fertilizers such as diammonium phosphate. In the corn belt region of the United States, the price of diammonium phosphate has risen to around $850 per ton, and the high price and drastic fluctuations have brought great uncertainty to farmers’ purchasing decisions for the upcoming 2027 planting season.

Suppressing overseas phosphate fertilizer and new energy production rates: Due to severe shortages of raw materials, overseas phosphate fertilizer companies are forced to continue controlling their operating loads, and European farmers are delaying autumn fertilizer preparation due to high costs. In addition, nickel cobalt hydrometallurgy (HPAL) projects in countries such as Indonesia have also been forced to reduce their operating loads due to sulfur shortages, and the sulfur bottleneck has substantially suppressed the capacity release of the global fertilizer and new energy industry chain.
4、 Market outlook: Continued tight balance pattern, wary of high-level fluctuations
Overall, the core contradiction in the current international sulfur market is no longer simply contract pricing, but the hidden cost increase caused by shipping risks, the contraction of multi country source outflow, and the sharp reduction of global tradable spot goods.
Short term trend: As long as the shipping risks in the Strait of Hormuz are not substantially relieved and the export sources from India and Russia are not restored, the import landed costs for China and the world will continue to operate at a high level. The market is expected to maintain a high and wide range of fluctuations, with easy gains but difficult losses.
Mid to long term prediction: Overseas leading phosphate fertilizer companies have issued warnings that the global sulfur shortage pattern may continue until 2027. In the macro context of tight supply, high costs, weak demand, and strong prices, the high price situation in the global sulfur market is difficult to completely reverse in the short term.

LLDPE (7042) had an average price of 8506 yuan/ton on August 28th and 9125 yuan/ton on September 3rd, an increase of 7.27%. LDPE (2426H) had an average price of 10766 yuan/ton on August 28th and 11733 yuan/ton on September 3rd, an increase of 8.98%. HDPE (5000S) had an average price of 10612 yuan/ton on August 28th and 10937 yuan/ton on September 3rd, an increase of 3.06%.
The centralized maintenance of petrochemical facilities in the early stage and the contraction of market circulation sources are the core drivers of this round of price increase, among which LDPE is most significantly affected by maintenance. In September, maintenance facilities will resume production one after another, and domestic sources of goods will gradually be released, while coal production facilities will maintain high operating rates. The expected increase in imported capacity from overseas in the later stage further constrains the upward space of the market. The current overall inventory is still at a low level, which provides some bottom support for prices.
Downstream production has moderately rebounded from the low level in August, and the demand for agricultural film and pipe materials has improved. However, most industries only maintain the demand for immediate use and procurement, and there is insufficient willingness to actively replenish inventory. There is a divergence between the expected and actual peak season of Jinjiu, with high inventory of downstream finished products and weak profits, resulting in strong resistance to high priced raw materials. The demand only achieves weak repair and only serves as a bottom support for the market, making it difficult to drive a significant unilateral increase in prices.
Oil based PE follows the high volatility of crude oil and ethylene, forming a bottom support for spot prices. However, crude oil lacks sustained upward momentum, making it difficult to further push up prices.
The short-term polyethylene market will shift from a rapid rise in the early stage to a high-level oscillation, with insufficient momentum for a large increase, but low inventory and cost support will provide bottom support for the price. With the resumption of production of maintenance equipment, supply pressure is gradually emerging, and downstream acceptance of high priced raw materials is limited, suppressing the upward space in the market.

As of September 1st, the price of 0 # zinc was 26948 yuan/ton, up from 26235 yuan/ton on August 31st, with a daily increase of 2.72%.
Core market data
Domestic futures market
On September 1, 2026, the main contract for Shanghai zinc, ZN2610, closed at 27070 yuan/ton, an increase of 715 yuan/ton or 2.71% from the previous trading day. The intraday high reached 27165 yuan/ton, setting a new historical high since May 2022. The total trading volume of the entire market was 280668 lots, with a turnover of 37.886 billion yuan, holding 341819 lots, and increasing positions by 16934 lots.
International Futures Market
LME zinc futures reached a high of $3990/ton during trading, up 2.68% and hitting a new four-year high simultaneously. LME zinc futures are approaching the $4000 mark.
Fundamentally, the resonance between minerals, smelting, and inventory is exacerbated by the combination of financial factors.
Supply side:
Mining sector: Supply gap continues to widen
Geopolitical ‘black swan’: The escalation of the situation in the Middle East directly blocks the external transportation channels of Iranian zinc mines, with an estimated monthly impact of about 15000 to 20000 tons of metal in the market;
Domestic mining production reduction: Several small and medium-sized mines in major production areas such as Inner Mongolia and Yunnan have gradually stopped production due to safety and environmental inspections and declining grades, resulting in a significant decrease in daily production of domestic mines compared to the previous period;
Imported ore ‘quantity reduction and price increase’: The transaction price of processing fees for imported zinc concentrate in August has fallen to -117.50 US dollars per ton, which means that smelters not only cannot receive processing fees, but also need to pay fees to the mining end. This is the first time since 2008 that there has been a sustained negative processing fee, directly reflecting the extreme level of shortage in the mining end.

Smelting end: Negative processing fees force production reduction
Under the dual pressure of high raw material procurement costs and low prices of by-products such as sulfuric acid, more than half of domestic smelters are already in a cash flow deficit state;
According to incomplete statistics, it is known that the total annual production capacity of refineries involved in maintenance and planned production cuts in September exceeded 800000 tons. It is expected that the refined zinc production for the month will decrease by 25000 to 30000 tons compared to the previous month, and the supply contraction is moving from expectations to reality.
Inventory end
LME zinc registered warehouse receipts have dropped to below 100000 tons, the lowest level in nearly three years.
SHFE inventory decreased by 9497 tons per week to 102672 tons, and the destocking slope accelerated.
comprehensive analysis
The internal and external markets have formed a resonance upward pattern. A structurally strong market trend where the supply and demand fundamentals are transmitted and confirmed layer by layer from the mining end to the smelting end. Above 27000 yuan belongs to the high valuation area, with a high risk of chasing after high prices. It is expected to experience strong fluctuations at high levels and intensify volatility.

In August 2026, the domestic 1 # lead ingot market rose, with an average price of 15465 yuan/ton at the beginning of the month and 16220 yuan/ton at the end of the month, a monthly increase of 4.88%.
In August, the overall market showed a bottoming out trend followed by a sustained upward trend. After hitting a low point at the beginning of the month, it fluctuated and rose all the way, reaching a new high at the end of the month.
supply side
Primary lead: Some smelters have been disturbed during maintenance, resulting in a temporary shortage of crude lead raw materials, weak willingness of smelters to ship, and a contraction in spot circulation; Environmental protection and equipment maintenance have led to a temporary contraction in output, supporting spot pricing.
Recycled lead: The supply of waste lead-acid batteries is tight, recycling costs are rising, and the processing profits of recycled lead enterprises are limited. The operating rate has not been significantly released, and the incremental supply of recycled lead to the market is limited.
Overall, there was no significant increase in the effective supply of lead in August, and spot circulation was tight, providing the underlying support for the upward trend in prices.
Demand side
The core downstream applications of lead are concentrated in the field of lead-acid batteries, mainly covering two directions: energy storage scenarios and automotive starter batteries. Among them, in the traditional automotive starter battery sector, the demand for summer terminal battery replacement is gradually recovering, and downstream battery companies are synchronously promoting inventory replenishment. The behavior of buying at low prices directly drives spot consumption; In terms of energy storage lead-acid batteries, with the release of demand for some energy storage projects, the overall operating rate of battery factories remains at a medium to high level. The current industry demand has not shown explosive growth, and overall it is showing a moderate recovery trend. The main driving logic for prices comes from downstream inventory being low, and companies gradually replenishing inventory as the market rises.
Overall summary
The core logic behind the rise in lead prices in August is that supply side contraction is the main cause, downstream demand is moderately recovering and cooperating, and tight spot prices are driving upward price recovery; On a technical level, there has been a complete shift towards a bullish trend, but in the short term, there have been signs of an uptrend. Market outlook: The trend is bullish, but it is not advisable to chase high. First, be alert to the risk of high-level fluctuations and pullbacks, and wait for a pullback before seeing multiple opportunities. Focus on tracking changes in the supply side.

This week (8.24-8.28), the magnesium ingot market in Shaanxi region fell, with an average market price of 15900 yuan/ton at the beginning of the week and 15850 yuan/ton at the end of the week, a decrease of 0.13%.
The following analysis is based on fundamentals:
Supply and demand side

The maintenance and resumption of production work on the supply side continues to be implemented, and the operating rate of the entire industry maintains a steady upward trend. Currently, the overall supply in the spot market is in a relatively loose range. At present, the sales strategies of magnesium smelting enterprises are showing obvious differentiation: small and medium-sized manufacturers are facing dual pressures of inventory backlog and capital turnover, coupled with the current demand for cash flow recovery in a loss making state. The willingness to follow the market and lower prices continues to increase, and low-priced sources continue to emerge in the market, becoming the core influencing factor in lowering the overall price center.

The overall market operation on the demand side remains stable. The domestic industrial chain generally maintains a low inventory turnover mode in various links, and the entire industry generally implements a procurement strategy of on-demand purchase. The market lacks effective support from centralized buying. From the perspective of exports, although the summer break in Europe and America has gradually entered its final stage and the overseas market inquiry volume has shown a marginal rebound, the attitude of overseas buyers to lower prices is still firm, and new orders are generally dominated by small batch essential orders.

Raw material end

The overall increase in core raw material prices this week has driven up the comprehensive production cost of magnesium. The price of coal in the production area continues to rise against the trend, reaching a new high for the year; The market quotation of ferrosilicon also shows a fluctuating and strengthening trend. The current comprehensive cost of magnesium has significantly exceeded the spot market price, and the industry as a whole has entered a loss zone. The extent of losses for small and medium-sized smelting enterprises continues to expand, further highlighting the situation of cash flow pressure.
integrated forecasting
The short-term magnesium price is in a weak equilibrium pattern of “cost support at the bottom and demand suppression at the top”. The space for deep decline is limited, but the rebound momentum is insufficient. Follow up on the order recovery after the end of overseas summer vacation and the downstream replenishment rhythm of “Golden September and Silver October”.