Sulfur Market in Brief
The Spot prices have declined again in east and west of Suez market. The CFR offers to China have slipped to less than USD 120/MT in response to less end-user demand and the steady weakness in the end-product market. A price of USD 117-118/MT CFR China is widely indicated as the tradable level, with buyers in south China still bidding for lower.
In Brazil, Mosaic has purchased a cargo with USD 103/MT CFR attached, setting a new low-end spot range for the Brazil CFR price. Interest is now decidedly absent for offers over USD100s/MT CFR. Settlements have not yet been reached for quarterly contracts, but buyers are gaining some confidence from the lower spot values and widely anticipate softer second-quarter prices once agreements are formalized.
Active Forces in the Market
Market Outlook in Next Month
Spot demand should pick up somewhat following the conclusion of second-quarter contract negotiations. The outlook for prices remains weak in the near-term but producers and traders alike are confident that the price floor has almost been reached.
Asia
China
Compared with last week, trade in the Chinese market almost halted for CFR cargoes. But there was talk of two deals concluded in the high-USD110s/MT CFR this week. Additional buying interest was lackluster but discussions in the river were heard to be taking place in the high-USD110s/MT CFR.
In the South, price ideas were under USD 115/MT CFR because of healthy stocks and scheduled April maintenance. In the crushed lump market no new business was heard, with offers currently absent for Iranian product. But there were still expectations for Russian tones to return to the market in the second quarter.
A trade was reported in the low-USD 110/MT to an end-user along the river, but this could not be confirmed. The China CFR price was assessed at USD 100-118/MT.
Domestic Market
Prices at Puguang were lowered by Sinopec for a third week running. Wanzhou was reduced by RMB 50/MT to RMB 960/MT and Dazhou sulphur has been lowered by RMB 30/MT to RMB 910/MT. Stocks at Wanzhou were understood to be at around 35,000 MT and stocks at Dazhou 47,000 MT with the facility still operating near full capacity. Port prices have held across the week at RMB 950-960/MT, equivalent to mid-USD110s/MT CFR, down by around RMB 20/MT on the week as buying interest thinned even for ex-port tones. Molten domestic prices were last heard at RMB 1,100/MT in Shandong and crushed lump tones ex-port were still priced RMB 60-70/MT below granular sulfur. Paper prices slipped to RMB 930/MT. Port stocks were at 1.41mn MT this week, an increase of around 60,000 MT on the week. Stocks at Nantong fell even further to 30,000 MT as the closure of sulfur operations at the port looms..
India
Maintenance season: RCF issued a tender on 20 March inviting bids for mechanical maintenance works at its sulfur melter at Trombay. The tender includes various works at the sulfur crusher, melter, sulfur pumps and piping. The tender will close on 3 April. RCF is the latest Indian sulfur consumer to prepare for maintenance works. CIL is currently undergoing a 30-35 day maintenance at its sites in Vizag and Kakinada, which started in early March. IFFCO will bring its plants in Paradeep offline from the second week of April for three weeks.
FACT will also carry out planned maintenance at its Paradeep facility for three weeks, starting in April. These various maintenances will pull India's import demand lower across the coming month along with the impending end of the financial year which will see consumers want to hold low stock levels. But despite weak import demand, suppliers are indicating steady domestic demand, with firmer sulfuric acid prices on the year encouraging more sulfur demand from the acid sector. Sulfuric acid prices are averaging USD 33/ MT more than in March 2018.
Middle East
Second quarter negotiations continue
Negotiations for second quarter contract cargoes are still ongoing - or yet to start in some instances - between suppliers in the Middle East and buyers in Brazil and North Africa. Contract prices are expected to soften below the first quarter values of USD 105-123/MT fob, but sell-side price targets have not yet been confirmed.
State-owned sulfur supplier Adnoc has so far settled its contracts with traders at USD 104/MT fob Ruwais, which is USD 20/MT fob below its first quarter settlements with traders. No new spot activity was confirmed this week and Middle East spot availability during the second quarter was not confirmed, with mixed reports currently in the market.
Qatari state-owned Muntajat has set the first April price for the region at USD 103/MT fob Ras Laff an/Mesaieed. More prices from Kuwait's KPC and the UAE's Adnoc are anticipated in the week to come, providing more clarity on price targets for the coming month.
Iran
The market is characteristically quiet in the aftermath of the 21 March Iranian New Year Holiday. Supplier IGCC is widely expected to initiate proceedings by early April, off ering a sales tender for granular sulfur. Fob Iran prices were assessed down notionally to USD 78-88/MT, reflecting the highest sale prices currently achievable for shipments to China, with freight between the two regions indicated at around USD 30-35/MT, and international market sentiment still leaning towards bearish.
Qatar
Qatar's state-owned marketer Muntajat has set its April Qatar Sulfur Price (QSP) at USD 103/MT fob Ras Laffan/Mesaieed..
Africa
Negotiations are underway for second-quarter North Africa CFR contracts but no conclusions have been drawn yet. Market participants indicate that the buyers in the region are seeking to settle prices for the quarter at around USD 100/MT CFR. For the spot market, CFR North Africa prices have been assessed downward to USD 100-115/MT, on weakening market sentiment.
Egypt
Buying interest in Egypt is muted at present, following last week's explosion at the NCIC-owned Ain Sokhna facility, and some end-users are covered by tones currently in hand. Firm offers are heard in the mid-USD 110/MT CFR for granular — at a maximum — but trades have not been completed at such levels.
South Africa
Demand for fresh imports to Richard's Bay remains lackluster, with buyers largely covered by recent purchases and healthy port inventories.
Freight Market Summary
Fertilizer freight rates this week diverged as the South American markets started to push higher while the US east coast faded on a lack of available cargoes. But overall the global market was still poised to push higher and participants are suggesting rates could be stronger in April.
A Greek public holiday early in the week did slow trading but several ships were booked from the US Gulf on transatlantic journeys at USD 16,000/d while vessels from the east coast of South America saying across the Atlantic commanded USD 15,000/d.
In the fertilizer market, Cargill booked the Panamax Agri Kinsale from Klapeida, Lithuania to Dammam, Bahrain for USD15,000/d. There were no other fixtures for now although Bainbridge, which often books ships for fertilizer cargoes, did pick up two Kamsarmaxes from Indonesia to India at USD 7,500-7,750/d and an additional vessel from Richards Bay, South Africa to India at USD10,250/d.
Report By: Javad Najafi
