Amoot Iranian Trading Company

Tending to a soft stable state This week, prices have continued their stable to soft trend. There has been concluded business which softened molten sulfur prices in China together with solid sulfur prices in India. In west of Suez recent business, prices have been softened in North Africa and the Mediterranean. Due to the large portion of market waiting for Middle East price announcements or the commence of 2Q contract discussions, not much price negotiations have been done for March prices. Active Forces in the Market - Tupras refinery of Turkey’s next sales tender will lead the upcoming Mediterranean market price for March. - The Iranian government KHIPV sales tender is supposed to be closed next week to not only signal Iran FOB prices but also probably low-end granular prices in China. - It is probable that the PPL’s purchase tender award in the mid USD 110/MT CRF spurs other east of Suez buyers to look for competitive price levels in the coming week. Market Outlook in Next Month With the re-opening of Volga Don river system, Russia will get back its ability to transport sulfur to the Black Sea port of Kavkaz by Mid-April. For this, quantities of 1.8-1.9 Million MT of Russian Sulfur are already discussion for the 2019 river navigation season which shall focus on North African markets that will likely help buyers to moderate any probable price increase. Asia China As Chinese market participants return from New Year holiday, the activity has been slowly ramping up. However, some trade has been executed this week which stables prices. There are reports of an end-user securing sulfur slightly. According to some reports an end-user securing sulfur slightly over the mid-120s/MT CFR but this transaction could not be confirmed with a buyer, and end-users are now bidding for March at around USD120/MT CFR in the south, with comments of sufficient stocks and plant maintenance, together with a poor outlook for the finished fertilizer market, curbing overall sulfur demand. In the river, Middle East granular is being offered in the high-$120s/MT CFR and small lots are in the mid-$120s/MT CFR. Crushed lumps are not being vastly offered to the market with supply limited, but seller price targets are at around $120/MT CFR. India Indian PPL received four offers for its last purchase tender from market activists. The prices offered were in the range of USD 130s/MT for CFR delivery to USD 120/MT CFR. Finally the tender was awarded to BGN in the mid-USD 110s/MT CFR. No further near term purchase is expected in the Indian sulfur market due to the Indian fertilizer plants entering the maintenance season and domestic sugar season in March. It has also been understood in the export market that two awards have been made against Reliance Industry term supply tender, with other awards under discussion. Indian sulfur imports was increased to just under 1.28 million MT last year despite domestic production increasing as new supply streams started up. Middle East Middle East prices are stable this week with no confirmed direct spot business. Currently the market is waiting for March price indications with UAE, Qatar and Kuwaits’s monthly prices being introduced in the coming week. Iran KHIPC, the Iranian Sulfur producer and refiner issued a tender of sales of 30,000 MT of Granular Sulfur. The freight to China is currently estimated USD 30-35 per MT. the freight market of loading bagged sulfur in Iran for 18-28 February shipment to China is about 30,000 MT and there exist an enquiry for bulk sulfur loading in the same period for an amount of 25-45k MT. Iranian Sulfur supplier IGCC stays out of the spot market this week. The company is focused on rebuilding its inventories and expects to return to the market during the first half of March. Africa The North Africa price of CFR delivery has been estimated at USD 115-125 per MT on confirmed concluded businesses As well as lower bid and offer levels. There are reports of a cargo sold in to North Africa significantly below this but confirmation from all transacting parties could not be obtained. Morocco Fertilizer producer OCP is heard to have secured around 40,000t of US Gulf origin sulfur and a price close to USD100/MT CFR has been attached. But the trade could not be confirmed with a sell-side party or the wider market. Port operations at Jorf Lasfar were hindered by bad weather this week, as the port closed 18-19 February in response to high tides. South Africa Spot demand is muted. Buyers are widely indicating they are covered by recent purchases or available domestic supply. Yet, in the freight market, three inquiries have been issued for bulk shipments to Richards Bay; 35,000t loading Qatar 1-2 March; 35,000t loading Ras Laffan, Qatar 28 February - 2 March; 38,000t loading Ruwais, UAE 27 February - 1 March. Freight Market Summary Two outages - one at IPL Australia due to heavy rains and floods and the other at Mexican producer Pemex, the result of a power-hungry raccoon chewing on electricity cables - have lent some bullish sentiment to an otherwise depressed phosphates market this week. The Australian shutdown is the far more important. The Pemex impact has been to merely slow the rate of loading. Pemex already had plentiful stocks hence the effect on global supply is negligible. Australia is the exception and prices remain under pressure. All in all, in short term the outlook is slightly soft. If Brazil enters the market, then prices could rebound quite strongly. Report By: Mohammadreza Barakchian