Sulfur Market in Brief
Spot market activity was missing this week. Granular sulfur offers from traders have been decreased to around USD110/MT CFR China, but buying interest is still absent, with rising port inventories and weak phosphate market sentiment sapping import demand.
Similarly interest is muted in other CFR markets, and prices elsewhere are holding steady on a lack of confirmed trades or bid/offer indications.
For the fob markets, Iranian sulfur supplier IGCC is offering a total of 100,000MT through two sales tenders of crushed and mixed flaked sulfur, few bids have been received for the company's crushed cargoes so far.
In the contract markets, the remaining negotiations that are ongoing for third quarter contract prices are indicated to be nearing the closing stages. Lower settlement prices on the quarter are widely anticipated, in line with movements in the spot market.
Active Forces in the Market
Market Outlook in Next Month
Market players are beginning to lose confidence in the prospect of price increases during the third quarter, with inventories high and phosphates market sentiment still leaning towards bearish.
Asia
China
Import trade has stalled this week on weak market sentiment, mounting port stocks and a lack of confidence in price levels. Downstream phosphates manufacturers have committed to a sizeable DAP production cut, undermining the demand outlook for sulfur. At the same time, port stocks have grown to exceed 2mn t, representing a six-year high.
Yangtze River prices fell sharply early in the week, establishing a large discount to CFR indications early. This encouraged some local end-users and traders to step in and book tones from the ports. The increase in domestic buying prompted a rally towards the end of the week, but it was not enough to bridge the gap or encourage importers to step in for CFR cargoes.
Because of these factors, selling any cargo on a CFR basis this week represented a major challenge. No new trades were confirmed, while firm bids and offers were also in short supply. The most competitive bids and offers centered on USD110/MT CFR. Offers below USD110/MT CFR were for non-Mideast tones. Bids at USD105/MT CFR and below have not been accepted to date. Crushed lump indications were lacking, but prices for molten sulfur have slipped by USD5/MT on a sale of a 3,000t cargo this week at USD85/MT CFR China, for early August loading.
Domestic market
Sinopec has cut its Puguang prices at both sites, with Wanzhou cut to Yn870/MT and Dazhou reduced to Yn830/MT. Yangtze River port prices started the week in retreat, falling to a low of Yn830/MT ex- warehouse, reflecting around USD101/MT CFR. After some buying in the range Yn830-840/MT, prices rose, seeing bids and offers range Yn850-870/MT close to publication.
The midpoint of this range would represent around USD105/MT CFR equivalent. Paper prices followed a similar path, falling early in the week to Yn834/MT for August and Yn839/MT for September, before gaining strength from the port price rebound to trade nearer Yn872/MT and Yn878/MT respectively by press time.
Sulfur port stocks hit six-year high
China's sulfur port inventories rose to their highest in almost six years this week, at 2.1mn t, as a steady flow of product to the country in recent months combined with weak demand allowed stocks to build.
India
CFR India prices are held steady this week at USD115-120/MT on a lack of confirmed, representative business, or bid/offer levels. Sulfur consumer Indorama's purchase tender closed on 8 July, but an award was not confirmed close to press time.
Bulk offers are understood to be minimal, but containers of Turkmenistan origin sulfur are currently on offer at USD100/MT CIF, according to market participants. In the domestic market, demand for sulfur is low and expected to remain so this month because of maintenances, and lower than expected precipitation levels from the delayed monsoon. Refiner and sulfur producer MRPL is operating at reduced rates following a two month shutdown because of water shortages in India.
During this period, the refinery did not produce any sulfur and it still has no immediate plans to offer an export tender to the market. Fertilizer producer RCF has issued a transportation tender for the delivery of 3,500t of molten sulfur. The sulfur is to be transported from BPCL's refinery to RCF's production unit in Trombay. The transportation tender will close on 24 July.
Middle East
Confirmation is still awaited for settlement prices on third quarter contract shipments to buyers in north Africa, Brazil and to traders. So far, settlement indications between traders and the UAE's state-owned sulfur producer Adnoc are indicated to be topping out at USD100/MT fob.
Settlements for cargoes to buyers in Brazil and north Africa from Middle East producers are indicated on a CFR basis netting back to the mid/high-USD70s/MT, to low-USD80s/MT fob Middle East. In the spot market, trading was lacking this week, keeping fob Middle East prices stable at USD95-100/MT. The next activity will likely come from Qatari state-owned sulfur supplier Muntajat, which closes a monthly sales tender for 35,000t of granular sulfur on 23 July.
Iran
Iranian sulfur supplier IGCC has issued a tender today to sell a mixed cargo of 40,000t of granular and flaked sulfur. The cargo is for early August loading from Assaluyeh port. IGCC has also extended the closing date of its tender to sell two 30,000t crushed lump cargoes on an ex-works basis from its plant in northern Iran until next week, in order to attract more interest.
The crushed lump tender is the first IGCC has offered on an ex-works basis.
Kuwait
Contract shipments from Kuwait's state owned sulfur supplier KPC to buyers in north Africa have been placed in the high-90s/MT to low-USD100s/MT. The price was not confirmed by the buyers close to the time of press. KPC will have two cargoes available to Morocco and Tunisia this quarter, as well as three additional cargoes which it will offer to the market based on the company's monthly Kuwait Sulphur Price (KSP).
Qatar
State-owned marketer Muntajat will close its monthly sales tender for 35,000t on 23 July.
UAE
Abu Dhabi's state-owned sulfur producer Adnoc has set its July Official Selling Price at USD100/MT fob Ruwais.
Africa
Contract negotiations for third-quarter shipments to North Africa remain ongoing. Settlement prices are still indicated within the USD80-100/MT CFR North Africa range. Confirmation from suppliers remains outstanding, but granular cargoes from the Middle East are so far indicated in the low-USD100s/MT at a maximum and those from the FSU are indicated in the USD90s/MT CFR. Cargoes from other origins are indicated at around USD80/MT CFR at a minimum.
Morocco
Around 493,000t is currently discharging, or scheduled for discharge at Jorf Lsfar, according to the latest port line-up. In the freight market there is a check for 25,000-55,000t loading Kavkaz, Russia on 13-15 July for shipment to Jorf Lasfar.
South Africa
The MV Cl Teresa arrived at Richards Bay on 7 July after departing from the port of Ust-Luga, Russia on 1 June. The vessel has a deadweight of 64,000t.
Tunisia
Tunisian fertilizer suppliers increased exports of TSP and phosphoric acid in June, while DAP shipments fell. There were no ammonia imports in the month.
Freight Market Overview
Fertilizer freight rates pushed higher this week as a shortage of ships in the US Gulf encouraged owners to hike their offers and rates trended higher. Charterers with front haul cargoes from the Black Sea or the Mediterranean to East Asia were trading at USD20-23,000/d. A voyage from the east coast of South America to the Mideast Gulf was booked at USD15,000/d with a ballast bonus of USD550,000 while journeys from South America to east Asia were booked at USD14,750/d with a ballast bonus of USD475,000.
Transatlantic voyages traded even higher with discussions taking place at USD18,000/d and at least one booking at this level as Bunge booked the Bulk Colombia from Ponta da Madeira to the Mediterranean. In the fertilizer market, BPC booked the Ultramax Ever Grace from Klaipeda, Lithuania to China at USD41/MT, loading from 18-20 July.
Report By: MoahammadReza Barakchian
