With sulfur prices at their highest levels since 2022, Canadian suppliers are expected to continue to draw from inventories to support elevated export demand from Vancouver.
Suppliers have drawn on sulfur inventories in 2025 as margins remain supported by elevated export prices out of Vancouver. Closing sulfur inventory levels measured 11.66mn t in July, down by more than 377,000t, or about 3pc on the year, and the lowest since May 2019, according to data from the Alberta Energy Regulator (AER).
When export prices are elevated, suppliers will often pull from vast sulfur inventories in Alberta for re-melting into molten sulfur for rail transit to prilling facilities in British Columbia and Alberta. The sulfur then moves in solid form to terminals in Vancouver and Port Moody for vessel loading.
The cost of the export process typically exceeds $150/t, according to sources, significantly reducing economic viability during periods of low export pricing. Producers will sometimes incur negative netbacks when sulfur prices are low, which can lead to pouring sulfur into blocked form and building inventories in Alberta.
From January-July this year, the Argus Vancouver sulfur price has averaged $238/t fob, more than triple the average of $78/t fob over the same period a year earlier.
The sulfur market could face some headwinds in the fourth quarter as support from fertilizers could waiver, with elevated phosphate fertilizer prices eroding affordability, resulting in some demand destruction. But growing demand for sulfur from metals producers is expected to remain supportive and provide a floor for pricing in the medium term.
With sulfur pricing supporting elevated exports of Vancouver through at least the end of the year and lower output from Alberta-based sulfur producers, inventories could fall further as favorable margins support drawing from stocks.
Elevated prices have supported solid sulfur exports of Vancouver from January-July, which have increased by nearly 5pc on the year to 2.04mn t.
Global markets have remained firm for much of the year, with metals producers in Indonesia ramping up operations at sulfur burners, lifting import demand. Although Canadian shipments of sulfur to Indonesia from January-July have slipped by 23pc on the year, shifting trade flows have supported higher exports to alternative destinations.
Canadian suppliers from January-July this year delivered 122,842t to Brazil, up by nearly threefold from the same period in 2024. Exports to Cuba surged by 96,041t to 122,467t, while deliveries to Australia rose by 5pc to 356,234t.
