Fresh Gulf sulfur loadings expected to lag despite Hormuz reopening

Global seaborne dry bulk fertilizer shipments fell 19% year over year in May 2026, largely driven by lower loadings from the Persian Gulf after the Strait of Hormuz effectively closed, disrupting Gulf-origin supply and spilling into broader trade flows, according to an S&P Global Commodities at Sea report.

The report projects global dry bulk fertilizer trade will remain disrupted, with shipments forecast to decline about 20% year over year in the second quarter, led by sulfur shipments, which are forecast to fall 47% from a year earlier, marking the steepest decline among major fertilizer raw materials.

Nitrogen shipments are expected to decrease 24%, phosphates 20%, while potash is forecast to remain broadly resilient with slight growth due to its lower dependence on Middle Eastern supply.

Although vessel traffic through the Strait of Hormuz has resumed, the report said fresh sulfur loadings from the Persian Gulf continue to lag because recent cargo movements have largely reflected the clearance of previously stranded vessels rather than a recovery in production and exports.

Full normalization is not expected before late Q3, as Gulf oil and gas-linked sulfur production gradually restarts.

Supply is expected to remain especially constrained after Russia extended its temporary ban on sulfur exports until Dec. 31, 2026, the government said June 26, further extending the impact of Middle East disruptions on global sulfur availability and fertilizer production. The combined effect is expected to keep sulfur markets structurally tight even as regional shipping conditions improve.

May trade data already reflected the scale of the disruption. Sulfur shipments from the UAE dropped to 74,000 mt in May from 530,000 mt a year earlier, while Qatar shipments fell to 49,000 mt from 375,000 mt.

Outside the Gulf, Canada has strengthened its role as an alternative supplier. Canadian sulfur shipments increased 68% year over year to 325,000 mt in May, partially offsetting lost Middle Eastern exports amid tightening global supply.

The sulfur shortage has also weighed heavily on the phosphate fertilizer trade. Global seaborne phosphate shipments declined 29% year over year to 4.2 million mt in May as reduced sulfur availability, China's tighter phosphate export restrictions and production cuts among key suppliers constrained exports.

Morocco's shipments fell 47% while mainland China reduced exports 67% following expanded export controls. Saudi Arabia proved more resilient than other Gulf exporters, with phosphate shipments declining only 1% year over year as cargoes were rerouted from Ras Al Khair to Yanbu on the Red Sea.

However, the report said the rerouting cannot fully compensate for reduced Gulf logistics capacity, suggesting phosphate supply will recover only gradually even after Gulf shipping conditions improve.

Looking ahead, the report forecasts only a marginal 1% year-over-year decline in global fertilizer shipments during the third quarter, which is a signal of a recovery.

"Fertilizer trade is expected to gradually recover into late Q3 and early Q4, but persistent sulfur tightness and lagging Gulf loadings will keep the market volatile in the interim", said the report.

Platts, part of S&P Global Energy, latest assessed granular sulfur on June 2 at $1,100/mt FOB Vancouver and at $995-1,000/mt FOB Middle East, spot, excluding Iran.