Sulfur Market in Brief
Illiquidity has returned to key trading market hubs, following a short increase in East of Suez trading activity last week. Buyers are now largely covered for March demand. But there could be some interest appearing for late-March loaders in the coming weeks, to cover first-half April requirements. The returning demand will likely be relying on two major factors; First - if spot price levels continue to soften and/or are considered attractive when buying interest returns. Second - if final-product prices have improved, because the currently weak finished fertilizer market and poor sentiment is weighing on sulfur market price ideas and demand at the moment.
Active Forces in the Market
Market Outlook in Next Month
There is this market speculation that buying interest will return in the second half of April, by bringing a small rebound in prices with it, which would follow a similar pattern to last year. The timing will also coincide with the likely conclusion of second quarter contract negotiations, as well as the end of two key sulfur market conferences.
Asia
China
The import market has been muted after last week’s flurry of activity. Sliding domestic port and paper prices have seen confidence weaken, undermining demand for CFR cargoes. Buyers are bemused by the decline and most opt to wait-and-see as a result. Next week’s award of Muntajat's tender is being eagerly awaited to provide clearer price guidance. There is demand in the south for prompt cargoes, but price ideas fell from the mid-USD 120s CFR to the low-USD 120/MT CFR as the week progressed. Close to press time, there were unconfirmed reports of a trade at this level despite offers still being heard in the mid-to-high-USD 120s/MT CFR for what little is still available. Crushed lumps of Russian origin are being offered by a trader to the market, and bid prices for lumps are heard at around USD 110/MT CFR. But availability is still thin, and even thinner in concluded transactions.
Domestic Market
For the first time since before the Chinese Lunar New Year Sinopec has lowered prices at Puguang's sites. Wanzhou tones have been lowered by RMB 40/MT to RMB 1,050/MT and Dazhou MTs have been dropped by RMB 20/MT to RMB 960/MT. Yangtze River prices have declined from RMB 1,040/MT at
the start of the week - equivalent to mid/high-USD 120s/MT CFR - to nearer RMB 1,020-1,030/MT export warehouse by press time - equivalent to mid-USD 120/MT CFR. Current prices would reflect the mid-USD 120/MT CFR equivalent at current VAT (16pc). Crushed lumps at port are priced RMB 60-70/MT below granular sulfur. Paper prices have fallen sharply highlighting the weaker sentiment, with April moving from RMB 1,050/MT last week to around RMB 1,017/MT this week. Port stocks are at 1.37mn t, down by around 25,000t on the week. Nantong port is holding only around 60,000t as it will be ceasing sulfur discharge at the end of April. It is understood that traders with stocks in hands are pushing product already sold to end-users to their specific warehouses before the deadline and there are also some small quantities being shipped to end-users without a price yet agreed because of the impending closure and subsequent loss of sulfur storage at the port.
India
There have been reports in the market this week of buying interest from an end-user, but nothing has been confirmed concluded and the majority of buyers are said to be covered in the near term and have no immediate demand. The lack of activity in the Indian market is keeping prices
stable at USD 115-120/MT CFR. In the export market, a freight inquiry for 15,000t loading New Mangalore 21-23 March for shipment to Fangcheng, China, is linked to the last spot sales tender from state-controlled sulfur supplier MRPL.
Indian state-controlled refiner and sulfur supplier MRPL plans maintenance of a 70,000 b/d crude distillation unit (CDU) in April for around 20 days at its 300,000 b/d Mangalore refinery.
Middle East
Spot business lacks this week in the Middle East, as it does in much of the wider market, with attention now turned to the result of the impending Qatar tender and ongoing quarterly contract negotiations. Supplier price ideas for trader 2Q contracts are understood to have lowered this week from the low-USD 110s/MT fob to the mid-USD 100s/MT fob. But no conclusions have been drawn yet, with negotiations said to be in the very early stages by participants.
Iran
Iranian sulfur producer IGCC awarded a tender to sell 50,000 MT of granular sulfur last week at USD 95/MT fob Assaluyeh, with the cargo due to load in the second half of March. IGCC is understood to no longer be offering any crushed lump cargoes for export. No time frame has been confirmed. The company's last offer of crushed lumps through a sales tender was in September 2018. The tender was awarded at USD 130/MT fob Bandar Abbas.
Qatar
Sulfur supplier Muntajat will close its monthly spot sales tender on 19 March.
UAE
In the freight market there is an inquiry from a trader for 50,000t loading Ruwais 25-27 March, for shipment to China and is linked to a spot sale last week of ex-UAE sulfur. Also, Adnoc Logistics and Services is in the freight market with an inquiry for 50,000t loading Ruwais 19-21 March, for shipment to Jorf Lasfar or Safi ports, Morocco. UAE state-owned sulfur producer Adnoc has contracted interserve subsidiary Adyard Group to replace the liquid sulfur loading system at Adnoc's onshore plant, at Al-Ruwais.
Africa
The North Africa CFR prices holds steady this week at USD105- 123/MT CFR with sales concluded within the current range.
Egypt
Bid levels are indicated in the low-USD 120s/MT and under for granular sulfur. But these are attracting little interest from sellers. A parcel of crushed lumps have been sold in to Egypt this
week ex-FSU and a price in the mid-USD 110s/MT CFR has been attached.
South Africa
Pulp and paper producer Sappi has purchased a 9,000 MT cargo of ex-Middle East granular sulfur at around USD 110/MT CFR Richards Bay. There was no sell-side confirmation available at press time.
Sappi's requirements are now covered, and the buyer does not intend to return to the spot market until June.
Freight Market Summary
Fertilizer freight rates for Supra-max sized vessels in the Atlantic basin trended lower this week after appearing to peak on Thursday last week. But sentiment appeared to be driven by a surplus of available tonnage in the Pacific basin, which dragged down rates there are encouraged charterers in the Atlantic basin to also aggressively lower their offers.
But voyage (USD/MT) rates were supported by rising fuel prices the cost of 380 cst high sulfur grade at the port of Rotterdam rose by USD10.75/MT between 8 and 12 March. But this support is unlikely to last long as prices have already started to drop again. While Supra-max rates remain under pressure, some analysts suggest that rates will soon tick higher again.
Fertilizer fixtures were limited although Bainbridge, which often charters fertilizer cargoes, booked the Ultramax Bulk Guatemala from the Mideast Gulf to India at USD12,500/d with a ballast bonus of USD 250,000 as the ship is currently off South Africa.
Report By: Ensieh Arbabi
