Sulfur Market in week ending to Feb 7th 2019
While east is waiting, west is almost active
The market in East Suez is in standby, where Qatar and Iran’s sales tenders are being closed after Chinese Lunar New Year’s holidays to be able to allow China to take part. However, sellers’ expectations are vague to see whether post-holiday demand of Chinese will be back or not.
The market silence of China has given the chance to some buyers in west to take advantage resulting close impending purchase tenders of Latin America.
Forces in the Market
1- Chinese buyers’ return is expected to be with their set targets in line with Brazil’s CFR price as it has dropped to less than latest closed business in China.
2- The leading price setter for Middle East’s second half of February is Qatar sales tender, Muntajat.
3- Italian key sulfur producing plants maintenance operations pushes some consumers towards spot market.
Market Outlook in Next Month
It is expected to observe a small price recovery entering March. However, not many experts expect significant shift in price, at least not in the first season of 2019.
Due to underway Lunar New Year holidays in China, no new business has been heard to be conducted which keeps the price flat for USD 110-120 per MT on CFR basis.
There has been no official figures available for port stock and interpretations on market status was mingled. While some market participants commented on healthy line ups specifically at port of Fengcheng, others placed levels at under 1.3m MT.
Due to environmental controls getting stricter in China, the chemical fertilizer production for agricultural fell last year and is expected to fall further which may consequently lead to demand fall.
Except for a purchase tender for 8,000 MT of Sulfur which closed on Feb 4th and will be open for one week, no other spot business has been observed or heard of in the country. In domestic market demand, the market is reported as idle with planned maintenance. The upcoming end of sugar season together with the international price fall push the market. The increasing domestic sulfur production which is pushed to be injected to domestic supply chain also weighs on expectations to increase prices.
No new spot business has been heard in the Middle East this
week with attention now focused on next week's spot sales
Iran’s IGCC has issued a tender to sell 30,000 MT of granular sulfur for late February.
Qatar’s Muntajat has issued its monthly sales tender for 35,000 MT of granular sulfur to load at Ras-Laffan port during March.
Abu Dhabi state-owned sulfur producer Adnoc has set its February official selling price at USD 108/t fob Ruwais, a fall of USD 19/MT from the suppliers January price.
Like most others, there is no new confirmed business in the North African market this week. However, buyers are targeting prices under last operated levels, spanning USD 120-130 per MT on CFR basis.
Crushed lumps with Black Sea origin are being offered to the market at around USD 130 per MT CFR, but buyers are countering about USD10 per MT lower.
There are two freight market inquiries linked to first quarter contracts:
- Adnoc Logistics and Services, 50,000 MT loading Ruwais, UAE 15-23 February for shipment to Jorf Lasfar or Safi port UAE
- 35,000 MT loading Beaumont, USA 15-21 February for shipment to Jorf Lasfar.
Regarding deliveries to Jorf Lasfar, a total of 521,000 MT is either discharging - or is scheduled to discharge - at port between now and 27 February, but several vessels have been shifted to anchorage today because of bad weather.
An additional 57,000t of Baltic loaded sulfur is scheduled to discharge at Safi port this week. The cargo is arriving aboard the MV Cramond Island.
Fertilizer producer ICS/Indorama is intending to get back to the market in the coming month for a cargo for April or May shipment, which will begin to cover its second quarter needs.
The MV White Hawk arrived at Richards Bay on 1 February. The vessel has a deadweight of 61,360 MT and was loaded at Ust Luga port, Russia.
A Brief on Freight Market
Dry bulk vessels freight rates trend has been downwards this year and the drop off has been sharp particularly in the Atlantic, US Gulf, Baltic, and Mediterranean regions.
Like many other indexes, Chinese Lunar New Year holidays have significantly reduced activity in East Asia to modestly nothing. Cargo volume is also not high enough to push increase in freight prices for now. Merely the relative strength of the Pacific Market will be influential in recovering Atlantic freight rates.
In spite of all expectations, demand should begin to raise from next week by Chinese holidays ending, which shall provide more clarity in Global Market.
Report By: Parya Ahmad Pour