Government efforts to reduce costs for US sulfur consumers would not be as simple as incentivizing rail shipments, while export controls could worsen the conditions that have driven prices to record highs.
Florida lawmakers recently expressed concern about high sulfur prices in a letter to the White House after prices hit a record high with the third quarter Tampa settlement at $705/long tonne (lt) delivered. Those prices have led to cutbacks in phosphate fertilizer production.
The US Department of Agriculture and the Department of Transportation have floated the possibility of using railroads to better move domestic sulfur supplies, or providing incentives to keep sulfur in the US in an effort to address farmer affordability issues.
Many of the refineries on the US Gulf coast — the main source of sulfur production and exports in the US — are not serviced by rail and rely on trucks to deliver sulfur to local customers and terminals. Because of this, such efforts would likely do little to address fundamental logistical limitations of the US sulfur market.
US sulfur production in 2025 totaled 7.48mn t, 59pc of which came from the Gulf coast, while consumption reached 7.61mn t, according to the US Geological Survey. Similarly on the west coast, a lack of rail infrastructure encourages sulfur exports, regardless of where prices sit. Exports from both regions, because of domestic logistical limitations, essentially serve to balance the US market.
The balance of sulfur that supplies many inland US customers mostly comes from Canada, shipped in molten form by rail. The US in January-July 2026 imported 1.08mn t of sulfur from Canada, more than double the volume from the same period a year earlier, accounting for more than 99pc of total imports so far in 2026. Overall, sulfur imports are up by more than 43pc on the year despite the steady threat of tariffs on Canadian sulfur.
Although Canadian sulfur has remained exempt because of its eligibility under the US-Mexico-Canada trade agreement, the threat of tariffs remains a concern as relations between the US and Canada have deteriorated.
Although considered unlikely by most market participants, any duties levied on Canadian sulfur would only raise domestic prices and place further strain on consumers.
Global markets driving sulfur costs
A severe imbalance in the global sulfur market, driven mostly by demand-induced deficits that began in 2025, has shifted to a substantial supply-driven deficit in 2026 resulting from the ongoing war in the Mideast.
At the beginning of the US-Israel with Iran, attacks on vessels severely cut shipments through the strait of Hormuz, impacting around 50pc of globally-traded sulfur. Prices at the US Gulf coast increased from a midpoint of $491/t fob on 26 February to a high of $1,175/t fob on 13 August, supported by war-driven export demand.
Export prices in the US Gulf since mid-August have fallen, reaching a midpoint of $1,025/t fob on 17 September. Weaker demand and buyer resistance, mostly from fertilizer and nickel producers, has applied pressure on suppliers and driven prices lower.
The war in the Middle East and its impact on supply and freight rates has been the primary driver of the sulfur price rally in 2026. Even if the war were to end imminently, elevated prices would likely linger through at least the end of the year because of damage to production facilities, terminals and infrastructure in the region.
But even prior to the war in the Middle East, a global supply deficit tightened markets during the second half of 2025. Surging demand from nickel producers in Indonesia and copper producers in sub-Saharan Africa drove prices to historically elevated levels, despite steady supply.
An export ban implemented by Russia beginning in the fourth quarter of 2025 marked the first constraint on supply, squeezing an already undersupplied market. Any suspension of exports from the US would only tighten markets further and is raise global prices, placing more strain on the global economy.
Removing the ability for US producers to export would also impact refinery operations because of the lack of storage across US infrastructure. Some estimate that if there were a moratorium on sulfur exports, refineries would have to greatly reduce their operating rates.
