Amoot Iranian Trading Company

Although very early, market attention is starting to turn to the second quarter of the year. West of Suez spot activity is almost completely absent as key buyers in Brazil and North Africa have focused their attention to upcoming contract negotiations, following a recent stint of spot buying at competitive prices. While on the supply-side, results of sales strategy tenders are awaited to confirm Russian sulphur availability.

In the East, it is understood that only some producers have tabled some initial price ideas have been tabled, but it is too early for agreements to have been made. Buyers are expected to push prices down as they have also upped buying activity in the last few weeks and are focusing on current poor fertilizer market fundamentals.

• With the elevated CFR purchase prices in China this week, it can be considered that Chinese market for March and early April have been covered.
• As Qatar Muntajat announced its monthly tender, the April monthly prices will be directed.

As the purchase trend would likely be back to a degree after the traditional break during the contract negotiation period, early April would be the time that quarterly contract settlements will provide guide to spot price movements.

China

Following last week's domestic sulphur conference, granular sulphur activity has increased with various cargoes concluded in the mid-to-high-USD120s/MT CFR this week. There are also indications that there have been sales of Canadian product made to China with prices spanning the low-to-mid-USD120s/MT CFR attached.

March now seems to be largely covered and April is the next focus, but until second quarter contracts are settled, not much is likely to be offered. Crushed lump business continues to be thin with few offers available and even fewer buyers interested.

Participants in crushed lump trade are also hesitant to put a price on business because of the current lack of availability and liquidity. The China cfr price is held steady at USD105-128/MT on done business.

Chinese Domestic Market: Sinopec for yet another week has held prices at RMB 980/MT ex-Daxhou and RMB1,090/MT ex-Wanzhou. Stocks at the two sites combined are understood to be at 71,000 MT. Port prices have now dropped by enough across the week to align with CFR granular prices. Paper prices fell this week also from over RMB 1,060/MT to around RMB1,050/MT for April. Port inventory levels are at 1.40 M MT this week. The three percentage point decrease in VAT applicable to sulphur announced by the government this week, means a cost reduction for sulphur importers. No start date has been announced, but it is widely expected to commence on 1 May, as per last year.

India

Import demand is not seen in the Indian market currently which keeps CFR prices stable. Domestic sulphur demand has been strong during February because of increased inquiries from sulphuric acid producers and suppliers, which are taking advantage of the comparatively lower sulphur prices. Sugar cane producers have also been keeping domestic demand strong, but the season is now winding down. Indian DAP inventories rose to their highest level in this fertilizer year at the end of last month, provisional government data show.

A spot deal has been confirmed in the Middle East this week for a UAE cargo which will be shipped to China and is priced in the low-USD 110s/MT fob. There are reports of spot sales having been made to South Africa of Middle East product but a price cannot be confirmed, with reports spanning the range of USD100-112/MT FOB. The Middle East fob price has been assessed at $104-111/t, with the low end supported by stable prices in other CFR markets. For 2Q contracts, it is understood that some producers have commenced negotiations with a starting point in the low-USD 110s/MT FOB.

Qatar

Qatari state-owned marketer Muntajat has issued its monthly tender to sell 35,000 MT of sulphur for loading in April at Ras Laffan port. According to port data, around 178,500 MT of Qatari sulphur was exported in February. In the freight market, there is an inquiry for 35,000 MT loading 18-19 March at Ras Laffan for shipment to Zhenjiang or Fangcheng or Beihai ports, China.

UAE

According to port data, the UAE loaded 570,500 MT of sulphur for overseas export in February. There are two freight inquiries in the market for 30,000MT, loading Ruwais 15-18 March to discharge at Chennai or Vizag and Paradeep or Haldia ports, India and to discharge at Chennai or Vizag and Haldia ports, India.

North African spot prices have nudged down on the top end on recent sales to Egypt. Other buyers in the region remain out of the spot market with second quarter contract negotiations looming. Buyers are expected to look for a drop on the first quarter price because of the steep softening in spot prices since the start of this year as well as the currently weak sentiment in the finished fertilizer market. The North Africa spot price has been assessed at USD 105-123/MT CFR.

Egypt

Buyers are now heard to be bidding USD 110/MT CFR for crushed lumps and no higher than USD 120/MT CFR for granular. But available offers are few at these levels. Freight between the Black Sea and Egypt for bulk cargoes under 10,000MT is around USD 27/MT.

South Africa

Fertilizer producer Foskor is widely understood to have undertaken unplanned maintenance at its acid plant in Richards Bay, following a recent gas leak. Foskor was not available to comment and it is not clear when the company will next return to the sulphur spot market. There are however reports of two deals in to the country of ex-Middle East origin product this week, but no confirmation from buy or sell-side parties could be obtained.

Supramax freight rates rose and fell rapidly this week but settled largely in line with the same time last week. Poor weather conditions and fog in the Mississippi limited the number of ships that could make themselves available and some owners managed to wrap up fixtures at a   premium to previous levels. But as soon as these conditions cleared charterers pushed hard for lower levels and picked up vessels at a discount to the current rate — before the market finally settled flat with last week.

Early this week Vale has declared force majeure on certain shipments from Brazil but this should largely affect the Capesize market rather than the Supramax market. Participants said that Supramax and Handysize trading was much more active this week compared to the previous two weeks and that rates are likely to trend upwards — despite the current flatness. This sentiment echoed around the market and most owners started to push for higher levels on standard fixtures. Bunker fuel prices also started to tick higher on 7 March, which could start to push the $/t rates higher as well and further inflate market levels next week.

Report By: Shahriyar Yusefi