China Chemical Prices Surge as Hormuz, Sulfur Ban, and Tungsten Curbs Collide

On July 1, 2026, several major Chinese refining and chemical producers raised their factory-gate prices for widely used solvents, including toluene, isopropanol, and xylene. The coordinated move, issued by mainstream refineries across Central China, Shandong, Jiangsu, and South China, capped a six-month stretch in which Chinese chemical prices climbed across the board.

Sinopec's Central China branch lifted its toluene price by 50 yuan per ton, while Shandong producers such as Chambroad Petrochemical and Dongming Petrochemical raised toluene by 30 to 50 yuan per ton, pushing quotes into the 5,770 to 5,950 yuan per ton range. In the south, isopropanol offers rose by 25 to 50 yuan per ton and settled near 6,100 yuan per ton. Traders point to firm crude oil costs, tight regional supply, and the pass-through of high input costs built up earlier in the year.

In the first half of 2026, chemicals rose at very different rates, forming distinct price groups. Sulfur led the market with a rise of about 144 percent, briefly spiking close to 500 percent during the sharpest phase of the crisis. Diethylene glycol climbed roughly 143 percent, and sulfuric acid gained about 125 percent as fertilizer and metals demand held firm. Tungsten hexafluoride, a specialty gas used to build semiconductor chips, more than tripled from about 750,000 to over 2 million yuan per ton, driven by tight global supply and Chinese controls on tungsten exports.

In the sulfur market, China's own policy response has deepened the squeeze. On April 10, 2026, Beijing announced a full halt on sulfuric acid exports, effective May 1 and set to run through at least August 2026, with only electronic-grade material exempt. The measure replaced an earlier export quota and pulled the world's largest acid supplier, which shipped about 4.6 million tons in 2025, off the market. As of early July 2026, the ban remains in force, and combined with Russia's sulfur export restrictions and the blocked Gulf route it has left copper producers in Chile, nickel operations in Indonesia, and fertilizer buyers in India and Africa searching for alternative supply. For Chinese producers the export halt keeps more acid at home, yet the underlying sulfur shortage keeps pushing domestic feedstock costs higher.

Beyond the top gainers, hundreds of bulk and specialty chemicals rose in step. A second tier of sulfur-based inorganics and intermediates gained 70 to 100 percent, a third tier of common bulk chemicals rose 30 to 50 percent, and a fourth tier of solvents such as methanol, ethylene glycol, and xylene climbed 10 to 30 percent. The July 1 solvent hikes fall mostly into that fourth group.

By early July 2026, conditions had eased only partially. On June 27, naval authorities opened a wider shipping lane near Oman that allowed more traffic through the strait, but flows remain well below pre-crisis levels and sulfur inventories at Chinese ports stay low. With refinery maintenance and tight regional supply still in play, solvent and aromatic prices are holding firm and prove easier to lift than to bring down.

Analysts expect some of the most overheated products to correct over the medium term as domestic capacity for specialty gases, phosphorus chemicals, and intermediates comes online and import substitution advances. Even so, elevated feedstock costs are likely to reset price floors higher and keep pressure on downstream sectors such as coatings, fertilizers, pharmaceuticals, and advanced materials.