German sulphur consumer Kelheim Fibres will wind down its operations by the end of this year. The company announced the decision on 24 November after a planned sale to the LEO III Fund, managed by the Dubag Group, collapsed. The potential sale was linked to Kelheim’s ongoing insolvency process. However, it fell through because the buyer could not secure downstream supply contracts for 2026.
Production set to end on 31 December
Kelheim confirmed that production will be phased out by 31 December 2025, as regular output is no longer viable. Operations will shut down completely unless new downstream customers commit to purchasing output. The company is attempting a last round of talks, but long-term continuation remains unlikely.
Sulphur supply challenges deepen pressure
Kelheim Fibres is a small consumer of sulphur and sells limited volumes of surplus sulphuric acid locally. The company has also faced reduced sulphur availability throughout 2025. Its main supplier, Bayernoil’s Vohburg-Neustadt refinery, suffered a fire in January. Since then, the refinery has operated at lower rates, tightening sulphur supply in the region.
Industry strain grows in western Europe
The challenges facing Kelheim reflect broader stress in the European chemical and fibre sector. Sulphur prices are at a three-year high, and raw material and energy costs remain elevated. At the same time, weak downstream demand is preventing producers from passing on cost increases to customers.
Lower-priced imports have intensified competition, further eroding demand for fibre products produced in Europe. As a result, the outlook for Kelheim Fibres sulphur operations and other European producers remains difficult heading into 2026.
Sources: Argus
