Sulfur Market in Brief
With many marketers waiting to see what happens, the spot market activity has been subdued in the east this week. In particular, the final Middle East monthly lifting prices revealing and widely anticipated reductions on August prices.
However, there has been some actions seen in the North African and Mediterranean markets. Libya’s NOC has awarded its sales tender for two September loaders. Tupras of Turkey concluded its e-tender for September loading and an Egyptian buyer managed to secure an 8,000 MT cargo with CFR delivery at low/mid USD70s per MT.
Active Forces in the Market
Market Outlook in Next Month
As the finished fertilizer market outlook continues to be bleak, some of the market has lost confidence that price softening will come to a halt, even for a short time. On the other side, this lack of support in downstream is expected to see some end-users reduce their sulfur demand in last quarter of the year.
Asia
China
Existing lack of confidence in pricing undermining potential trade, the market remains slow and weak. All importers widely adopted ‘wait and see’ approach in case they do not have an immediate need to buy.
The progressive depreciation of the Chinese Yuan against the US dollar further discouraged imports on a USD basis. This additional deterrent was not needed, considering substantial port stocks and the weak downstream phosphates market outlook.
Minimal fi rm import bids were noted in the uncertain market conditions, but price targets in the south are now sub-USD80/MT CFR for granular sulfur. Mideast and open/non Iranian granular cargoes were offered in the low/mid-USD80s/MTCFR to southern buyers, but were not concluded.
Yangtze river bids were tabled in the low-USD80s/MT CFR against offers for Mideast October delivery cargoes in the mid/high-USD 80s/MT CFR. The crushed lump market is still dead, prices are placed well below that of granular product and are more in line with molten CFR prices.
The China CFR price has been assessed at USD60-84/MT on reduced bid and offer levels.
Domestic market
Sinopec has reduced prices at both of its Puguang sites by Yn10/MT. Dazhou sulfur is now priced at Yn760/MT whilst Wanzhou product is now priced at Yn730/MT.
Refiners in the east have lowered prices again by around Yn40-80/MT. On 27 August, port prices were in the range of Yn730-735/MT, equivalent to mid-USD80s/MT CFR. By press time prices had fallen to Yn720-725/MT ex-warehouse, which is equivalent to the low/mid-USD80s/MT CFR.
Molten sulfur prices in Shandong are down, to Yn530- 550/MT ex-tank. Upcoming turnarounds downstream within Shandong are dampening the sentiment further. The currency depreciation prompted a rise in domestic paper values early in the week.
But there was little trading at the higher levels. At the start of the week, September
was trading at Yn748/MT, October at Yn762/MT and November at Yn765/MT. By 28 August, paper prices had edged lower, to around Yn141/MT for September and Yn757/MT for October, and at press time they had fallen again to Yn736/MT for September, Yn755/MT for October and Yn759/MT for November.
Port inventories have officially hit 2.2mn t in China, a level not achieved since July 2013.
India
The purchase tender from fertilizer producer RCF is yet to be awarded but is expected to be awarded to the domestic trader, Devdhar Chemical, which made the lowest offer of Rs 6,291 ex-works excluding GST and RCF transportation costs.
With these included, the price is estimated to be around Rs 8,700 delivered, which is equal to the low-USD120s/MT CFR. The extended deadline for trading house MMTC's purchase tender has now passed. Only two offers are heard to have been made against it.
An award had not been made at press time, but the delivery port has been altered from Visakhapatnam to Calcutta. The India CFR price is held steady on no new CFR business and a lack of bid and offer price indications.
Domestic demand is muted because of the heavy rains. Also, some transportation issues have appeared because of damaged roadways from the heavy rains. Following a minor landslide last week at state-owned refiner MRPL's Mangalore refinery, normal operations are expected to be resumed in 10 days. Sulphur production has not been hindered by the incident.
Regarding scheduled vessel arrivals, the molten Sulphur carrier MV Sulphur Guardian, will arrive at Vizag port on 7 September. The Mitsui-owned vessel departed from Sodegaura, Japan 24 August. The cargo will likely be discharged by Indian fertilizer producer CIL under contract.
India’s first half sulfur imports inch up
According to GTT customs data, India imported 633,000t sulfur in January-June, up by 6% year on year.
Middle East
The Middle East fob price is assessed at USD65-68/MT FOB on increasing freight rates and lower CFR prices in key markets as well as September lifting prices, which are starting to be announced in the USD60s/MT FOB.
Iran
Sulphur supplier IGCC has postponed the closing date of its latest spot sales tender to 30 August. The last business in Iran saw prices fall to range USD50-60/MT FOB on a crushed lump/granular spread. Prices are held at this level in anticipation of further guidance when IGCC's tender closes.
Jordan
Fertilizer producer JPMC is still yet to award its term purchase tender. The company is understood to have healthy stocks, which could be assisting with the delay. Trading company BGN has loaded 50,000MT of bulk Sulphur at Ruwais, UAE aboard the MV CP Chongqing, for shipment to Aqaba.
The vessel departed Ruwais on 28 August and is scheduled arrive at Aqaba on 7 September.
Qatar
Qatari state-owned marketer Muntajat has set its August Qatar Sulphur Price (QSP) at USD75/MTMT fob Ras Laffan. This is a drop of USD25/MT on the July QSP.
Africa
The north Africa CFR price has been assessed at USD70-80/MT as cargoes under 10,000,T - which are usually bought at a premium to full size lots - are being secured at lower and lower prices.
There is still a notable lack of buying of cargoes over 10,000MT with larger regional buyers understood to be covered for the rest of this quarter.
Egypt
A cargo of 8,000MT of Kazakh origin sulfur has been bought by Abu Zaabal/Polyserve and sold by Greenfield at USD73/MT CFR Abu Qir. Now, buyers in Egypt are understood to be bidding exclusively under USD70/MT CFR.
South Africa
Fertilizer major Foskor will not return to the sulfur spot market until mid-September. The company last entered the spot market in July, when it secured 40,000MT of Middle East loading material in the high- USD80s/MT CFR Richards Bay.
Freight Market Overview
The fertilizer freight market progressed with its steeply climb this week, particularly in the Atlantic basin since the continued pace of fixing has depleted much of the available tonnage in the region and has left the characters to compete ferociously for the rest of the vessels.
The transatlantic rate pushed higher to USD 25,000/d between the US Gulf and Europe and at least one charterer picked up a ship on the inverse journey at USD15,000/d.
Fronthaul cargoes from the US Gulf to Asia-Pacific are under discussion at or close to USD 30,000/d while voyages from the east coast of South America are at or just below USD20,000/d. Fronthaul journeys from the Mediterranean or Black Sea at USD 25,000/d or higher and the market in the region remained firm. Participants suggested that all rates were still poised to move higher as the volume of tonnage remained limited.
Fertilizer bookings were limited during the week but RCF did book an unnamed Handymax vessel late last week for a urea shipment between Oman and Krishnapatnam, India, at USD20.95/MT — loading from 28-30 August.
Participants have also suggested that shipowners were increasingly reluctant to agree to shipments for fourth quarter loading dates as the IMO 2020 regulations start to disrupt the market. A wide swathe of ships are expected to be absent from the market for either fuel tank cleaning — which some estimate as requiring several weeks — or scrubber installation.
This has combined with the uncertainty surrounding the availability of the new 0.5% sulfur fuel grades and has made some owners reluctant to commit to fourth quarter cargoes until the direction of fuel prices, fuel availability and the number of ships trading on the market becomes clearer.
Report By: Parya Ahmad Pour
