As the global sulfur supply gap remains difficult to close in the near term, the titanium dioxide (TiO₂) industry is undergoing a profound divergence. Due to differences in raw materials and production processes, sulfate-process and chloride-process TiO₂ manufacturers are experiencing vastly different operating conditions—a tale of two extremes.

Since the beginning of this year, declining global oil and gas processing volumes, compounded by geopolitical tensions in the Middle East, have reduced global sulfur supply and driven prices sharply higher. Sulfur prices have hit their highest levels of the year, surging from an average of approximately RMB 3,850/ton at the start of the year to nearly 200% growth over the past six months. This price explosion has cascaded through the supply chain via sulfuric acid, with sulfuric acid prices rising by 130% over the same period.

Although recent de-escalation in Middle East tensions has prompted sulfur prices to retreat from their peaks, a swift recovery in supply remains unlikely in the short term. Industry insiders suggest that even if a U.S.-Iran truce is reached and the Strait of Hormuz is fully reopened, restoring production capacity in the Middle East will still take time.

The two dominant production processes for titanium dioxide are the sulfate process and the chloride process. The sulfate process relies on titanium concentrate and sulfuric acid as core raw materials, while the chloride process uses titanium-bearing feedstocks and chlorine gas—the key distinction being whether the process depends on sulfur.

At present, large sulfate-process enterprises are able to secure raw materials through multiple channels and are managing cost pressures reasonably well. Smaller producers, however, are struggling—with a notable increase in production cuts and shutdowns over the past two months. In stark contrast, chloride-process TiO₂ manufacturers are entirely insulated from the sulfur price surge due to their different raw material inputs. Moreover, as competition intensifies and supply contracts in the sulfate-process segment, chloride-process products have gained stronger pricing power in the market, further boosting their profit margins.