Q3 collapse: China phosphate curbs and 80% Vancouver drop

From July into August 2022 the sulfur market reversed violently. Keg River, citing Fertecon weekly Vancouver spots, reported roughly an 80% decline over about five weeks. Argus described Vancouver falling from the high-$400s toward under $65/t FOB within about two months as phosphate interest faded. BC Insight / CRU reported Middle East FOB averages dropping from about $485/t in June toward about $71/t by early August, with China’s restrictions on processed phosphate exports and affordability concerns driving demand destruction. Floating storage and unsold vessels near China featured in open commentary as the proximate trigger for the crash. US Gulf inventories and higher refinery sulfur output added Atlantic-side pressure. UNCERTAIN: how much of the August floor was true demand destruction versus temporary destocking by traders. The July-August 2022 collapse remains the cleanest recent example of sulfur demand destruction. China’s restrictions on processed phosphate exports, affordability stress for farmers, and floating storage overhangs near Chinese ports combined to erase the mid-year scarcity narrative in weeks. Fertecon-based Vancouver commentary of an roughly 80% spot drop, Argus’s fall toward under $65/t FOB, and BC Insight’s Middle East FOB path from about $485/t to about $71/t are mutually consistent public anchors. US Gulf length from higher refinery sulfur output added supply into a demand vacuum. Canadian exporters that had programmed H2 stems faced a different commercial problem than Q2: how to place tonnes when FOB no longer covered inland costs. Some answer was continued loadings already fixed; some answer was pour-to-block inland. The episode is why 2026 affordability warnings in phosphate and metals chains deserve equal weight with supply headlines.

Key points

• Keg River / Fertecon: ~80% Vancouver spot drop mid-July to mid-August 2022.
• Argus: Vancouver from ~$478/t peak toward under $65/t FOB within ~two months.
• BC Insight: ME FOB ~$485/t June to ~$71/t early August 2022.
• China phosphate export restrictions and affordability cut sulfur offtake.
• UNCERTAIN: share of crash from China floating storage liquidation vs fertilizer margin collapse.

Sources

• Sulphur Market Falls Back to Earth (Keg River)
• Price Trends (BC Insight / CRU, Sep 2022)
• Viewpoint: Sulfur volatility to wane as supply recovers (Argus)

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Public reference summary. Weekly PRA assessments require a commercial license. Not investment advice.