Sulfur Market in Brief
In the east, the market activity has been muted due to China’s National holidays. On the other hand, the final leg of contract discussions has been attracting attention. These both have led to a market participant describe the market in a “reduces despair”. Actually, the mentioned factors have made spot prices being held broadly stable in key purchasing markets which is providing the market a small moment of reprieve.
However, the news on 4Q contract settlements are still fueling the market’s sentiment, particularly regarding the Moroccan fertilizer producer OCP which will not receive any sulfur from UAE’s Adnoc in the 4Q. This lack may force a volume of 750k MT sulfur into the East of Suez market and deteriorate the current situation. However, this could make prices stable for the west to such an extent as OCP seeks for suppliers in the region to fill the gap.
Active Forces in the Market
Market Outlook in Next Month
With the 4Q of 2019 arrived, the outlook for the rest of the year remains the same, as gloomy. Prices are expected to progress with their downward trend and some market participants even suggest prices of USD 30 for FOB and USD 50 for CFR delivery.
Asia
China
The National Day holiday has kept activity muted in China this week. There is one report of a spot deal concluded at USD67/MT CFR but this could not be confirmed. All eyes are now on the post-holiday market, but with stocks at 2.3mn t and increases expected, there is not too much hope of a high level of activity.
The China CFR price is held at USD45-72/MT and the ex-works price is held at Yn620-630/MT. The MV Glovis Marie is scheduled to arrive at Fangcheng port on 10 October. The vessel was loaded at Ruwais port, UAE and departed on 24 September. The vessel has a deadweight of 55,705MT.
The MV Bulk Bolivia is also expected to arrive at Fangcheng port on 15 October. The vessel with deadweight of 63,465MT departed Ruwais port, UAE on 27 September. The MV Nicolaos A is scheduled to arrive at Beihai port on 13 October. The vessel with a deadweight of 53,806MT departed Jubail, Saudi Arabia on 26 September.
The MV Pola Ilaria departed Ras Laffan, Qatar on 11 September and was scheduled to arrive at Nanjing port on 2 October. The vessel has a deadweight of 37,495MT.
India
Sulfur consumer CIL has not had success yet in its search for 30,000MT and is targeting a price under USD70/MT CFR. There is a report of USD70/MT CFR being concluded but could not be confirmed with any trading party. Prices are held steady at USD73-77/MT CFR on minimal activity and no confirmed price indications.
Middle East
The only confirmed price points for Middle East 4Q contract prices continue to be for the contracts settled between traders and the UAE's Adnoc in the range of USD48-50/MT FOB.
Negotiations for cargoes to be delivered to north Africa are reported to have been concluded in the mid-USD60s/MT CFR which would netback to low-USD40s/MT FOB. No sell-side confirmation was available at press time, but it is understood that no Adnoc product has been settled for shipment to north African buyer OCP. This indicates that around 750,000t of sulfur will not be allocated to contracts and will possibly end up in the free/spot market.
For Brazil, sellers are still yet to confirm that they will not be delivering anything under contract. So far, a 4Q Middle East contract range of USD42-50/MT FOB is implied In the spot market, the range has been assessed at USD46-49/MT FOB on falling monthly prices, contracts starting to settle largely in the USD40s/MT FOB and market sentiment remaining soft.
Iran
Refiner and sulfur supplier Kharg Petrochemicals (KHIPC) has issued a tender to sell 25,000-30,000MT of granular sulfur. The cargo is to load at Kharg Island port 15-25 October.
Elsewhere, a Memorandum of Understanding has been signed between Iranian sulfur producer Ilam Petrochemical Company and Noorhan Sanat Co for the construction of a new sulfur recovery unit and granulator at the Ilam Petrochemical Plant. The new units will have a capacity to produce 8,815MT/year of sulfur.
Qatar
Qatari state-owned marketer Muntajat has set its October Qatar Sulfur Price (QSP) at USD48/MT FOB Ras Laffan, down by USD17/MT from the September price.
The company is also understood to be sold out on a spot basis for this year and will not be issuing its usual monthly spot tender for a November or December loader. Milaha Maritime and Logistics is in the freight market with a check for 40,000MT loading Ras Laffan 20-22 October for shipment to Fangcheng or Zhenjiang, China.
UAE
Abu Dhabi state-owned sulfur producer Adnoc has set its October Official Selling Price (OSP) at USD49/MT FOB Ruwais.
Africa
Moroccan fertilizer producer OCP has concluded its contract negotiations at USD52-65/MT CFR for the fourth quarter. The top end is supported by Middle East product and the bottom end
by Mediterranean/European MT. Russian supply falls in the middle of the range and OCP will only take granular product of Russian origin this quarter.
When it comes to the Middle East, no Adnoc origin Sulfur will be received this quarter. Tunisian fertilizer producer GCT is understood to be in discussions but no conclusions have been heard. The range is still pending final assessment as confirmation could not be obtained from all parties at press time.
In the spot market, with contract prices now coming to light, it is unlikely that buyers will pay above the mid-USD60s/MT CFR for spot. Also, firm bids from smaller consumers continue to fall and crushed lump product is being secured below USD60/MT in these smaller markets. The price has been assessed at USD55-65/MT CFR.
Egypt
Buyers are now bidding under-USD60/MT CFR for granular Sulfur but as yet nothing has been concluded at this level. Lumps were last indicated in the mid-USD50s/MT CFR for done business.
South Africa
There is a check in the freight market for 22,500-25,000MT loading Min Al Ahmadi, Kuwait 17-19 October for shipment to Richards Bay.
South Africa’s sulfur imports totaled just 441,000MT in the year to July, down by 22pc on the prior-year period. Qatar and Kazakhstan supplied the most, at 130,000MT and 108,000MT respectively, but this was down by 9% and 23%. The UAE was the third largest supplier, but delivered just 107,000%, down by 50pc. Imports from Russia nonetheless increased to 50,000%, from zero the prior-year period. In August, South Africa imported 100,000 MT, down by around 32%. Qatar and Kazakhstan again delivered the lion’s-share, at 50,000MT, and 50,000MT respectively.
Report By: Naeemeh Ferdowsi
