Huatai Securities: High sulfur prices may benefit sulfur-producing companies and alternative technologies.

According to an analysis report by Huatai Securities, on June 12, the domestic reference prices for sulfur/sulfuric acid were 9823/1838 yuan/ton, with a year-to-date increase of 169%/91%, reaching a historical high. This is mainly due to the steady growth in demand from downstream phosphate fertilizer/phosphorous iron lithium/pharmaceutical fiber/nickel smelting industries, coupled with factors such as the global decline in by-product production from refineries and disruptions in sulfur production and trade in the Middle East. Huatai Securities believes that in the short term, the operating rates of refineries globally may still be affected by geopolitical conflicts, and with domestic sulfur companies and port inventories at their lowest levels in nearly five years, sulfur/sulfuric acid prices may remain high in the short term. In the medium term, as global development of new energy sources replaces traditional energy sources, the demand for high sulfur oil may gradually decrease, putting pressure on the long-term reduction of sulfur production as a by-product of refineries. However, the demand for downstream phosphate fertilizer, new energy, and other industries is expected to continue growing. It is expected that the sulfur/sulfuric acid market will remain relatively high-priced for a longer period of time as the gap between supply and demand widens. Sulfur-producing companies and alternative products/technologies for sulfur/sulfuric acid are likely to benefit from these trends.