China is accelerating plans to launch its first sulphur futures contracts this year as the Iran conflict has intensified price volatility, reinforcing the need for a hedging tool and greater pricing power in the global sulphur trade, according to sources told Reuters.
Sulphur Futures Launch Timeline
The Dalian Commodity Exchange is likely to launch sulphur futures in the fourth quarter of this year, although the timeline is yet to be finalised and requires further regulatory approvals, two people familiar with the matter told Reuters. The China Securities Regulatory Commission, which typically approves new futures products, did not immediately respond to requests for comment.
One of the sources said the exchange had long planned to introduce sulphur futures, but work accelerated after the Iran conflict heightened price swings and underscored the need for a hedging instrument.
Iran Conflict and Supply Disruptions
China, the world's largest sulphur consumer, imports around 50% of its sulphur requirements annually. Customs data showed imports during the first five months of the year fell by more than half compared with a year earlier. The Iran conflict further tightened supplies, as nearly half of the world's seaborne sulphur trade passes through the Strait of Hormuz.
Record Prices and Volatility
Sulphur is widely used in fertiliser production, copper mining, nickel refining and several industrial applications. Prices had already been climbing for years before the Iran conflict.
| Metric | Value | Date | Source |
|---|---|---|---|
| Spot solid sulphur price (record) | 11,850 yuan/tonne (USD 1,743.16) | Early June 2026 | Shanghai Metals Market |
| Spot solid sulphur price (recent) | 9,043.5 yuan/tonne | Friday (late June 2026) | Shanghai Metals Market |
| Year-on-year price change | +292% | — | Shanghai Metals Market |
Spot prices of solid sulphur in eastern China touched a record 11,850 yuan (USD 1,743.16) per metric tonne earlier this month before easing to 9,043.5 yuan per tonne on Friday as shipments resumed through the Strait, according to data from Shanghai Metals Market. Despite the correction, prices remain 292% higher than a year ago.
Implications for Market Participants
Analysts at Huatai Futures said the proposed contracts would allow users to hedge against further price volatility. They added that sulphur futures could also help build visible commercial inventories at the exchange, strengthen supply-chain resilience and improve China's pricing power in the global sulphur market.
For commodity traders, procurement teams, and analysts, the launch of sulphur futures on the Dalian Commodity Exchange would provide a much-needed risk management tool in a market characterized by extreme price swings. The recent price correction from record highs, while offering some relief, underscores the continued vulnerability to geopolitical disruptions in the Strait of Hormuz. China's accelerating timeline for sulphur futures reflects a broader strategic push to secure pricing influence and supply chain stability in critical industrial inputs.
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