Sulfur Market in Brief
Initial settlements for the 2nd quarter contracts were confirmed this week.
There have also been prices of under USD 100 per MT CFR achieved between morocco and some Middle Eastern producers. Moreover, in North Africa there are ongoing negotiations occurring at prices as low as USD 80 per MT of CFR delivery for other origins’ products.
In Brazil and North Africa, CFR settlements indicate USD 33-35 per MT falls on 2019’s first quarter. Brazilian prices were also in the low USD 100s per MT.
Regarding West Europe market, first quarter Benelux contracts prices at USD 130-1460per MT have been fully confirmed. However there have also been some settlements still pending and some yet to be confirmed with reports of USD 5 per MT increase being achieved.
Active Forces in the Market
Market Outlook in Next Month
Assuming the history of the two last years repeats, the market is going to observe flat to slightly firm prices in May. However many of the upcoming movements will depend on the finished fertilizer market and there still is concern persisting regarding the phosphate market with the continuous weakness noted by marketers.
Asia
China
The market lacks clear price direction ahead of the major Argus conference in Shanghai next week. This week started off on a firmer footing, but has settled back amid a dearth of confirmed business. There was also a report close to press time of a 50,000 MT cargo having been sold for discharge in Fangcheng in the low-USD120s/MT CFR, but this could not be confirmed with the buy-side or wider market.
There are limited bids ranging USD113-119/MT CFR, but the top end is for part cargoes. More often, a wait-and-see approach is being adopted among buyers. For crushed lump, bid prices have been reported at around USD 110/MT CFR in the river but confirmed concluded business is lacking.
In the molten sulfur market, a cargo is understood to have been sold below USD100/MT CFR but the vessel was distressed and these circumstances mean the cargo cannot be included for assessment.
Domestic Market
Sinopec has held prices flat at Puguang this week. Wanzhou is at RMB 960/MT and Dazhou RMB 910/MT. Both prices are sitting below the port price.
The paper market had firmed at the start of the week to RMB 980/MT. By mid-week May price levels where at RMB 986/MT and June at RMB 990/MT, but prices did increase further with May at RMB 1,015 and June at RMB 1,030/MT, equivalent to the high-USD 120s/MT CFR, representing a modest contango. This strong paper movement has prompted some physical restocking among traders, believing a floor has been reached. Yangtze River levels have responded, firming to RMB 970-975/MT at the start of the week, reflecting USD 121-122/MT CFR equivalent basis the reduced VAT rate, and then to RMB 990-1,000 MT at press time. But confidence in prices increased as the week progressed with offers over RMB 1,010/MT.
Port stocks are at 1.36mn MT, down by around 50,000 MT on the week. Nantong port is now holding just 20,000 MT, having dropped 10,000 MT on the week, with the cancellation of sulfur operations imminent.
India
There has been some purchase taking place in the spot market of late with Tata Chemical s and Sai Phosphates which secured about 17,000 MT in between, with a price near USD 130 per MT for CFR delivery. The purchases are however too small for making the assessment and there are also smaller lots priced at a premium to full cargo sales.
Middle East
There have been understood of some quarterly contract settlements between North Africa and the Middle East, with netbacks in the range of high USD 70s per MT to low USD 80s per MT Middle East FOB.
There are also some negotiations with North African consumers in progress, however the price levels are anticipated to be near the ones already concluded.
For Brazil, some buyers have reported settlements of about USD 102 per MT for CFR delivery which means a low/mid USD 80s per MT for FOB delivery, but the Middle East producers have been suspended for 2nd quarter contract price to be agreed upon.
Traders have already settled with UAE's Adnoc at USD 104/MT FOB for the second quarter. Currently, the 2Q contract price is indicated to range USD 78-104/MT FOB. The Middle East FOB spot price has been assessed at USD100- 105/MT as monthly prices announced in the range of USD102- 105/MT FOB indicate that prices in excess of the mid-USD 100s/MT FOB are not achievable in the current market and key CFR markets are holding flat-to-soft.
UAE
There are reports of ex-UAE cargoes having been sold this week but it has not been confirmed from seller’s side pr the wider market. Adnoc sets April sulfur price at USD105/MT FOB Ruwais. This is USD 3/MT below the company's March price and the lowest official selling price the company has set since September 2017.
Africa
Reports state that Moroccan Fertilizer producer, OCP has settled some of its Middle East contracts for the 2nd quarter at the very high USD 90s per MT for CFR delivery and there are in progress discussions with the remaining Middle East producers and the suppliers of FSU and Mediterranean sulfur. It is expected that there will be a conclusion drawn for the significant quantities in the upcoming week.
In the spot market, no business has been confirmed for cargoes over 10,000 MT keeping prices flat at USD 100-115/MT CFR.
Egypt
There was a cargo with Greek origin purchased by Egypt at around USD 110 per MT with CFR delivery but the cargo may not be a correct price assessment as it has been too small. There has also been other small sales in the range of USD 106-114 per MT of CFR delivery.
Granular sulfur bids have been heard to be in the low USD 100s per MT CFR and crushed lumps in the mid USD 90s per MT CFR.
Freight Market Summary
Fertilizer freight rates ticked lower this week as the Atlantic Supramax market remained under pressure. But a rally in the Pacific basin has started to exert some upwards pressure and participants cautioned that rates could move higher next week.
The cost of freight between the US Gulf and Asia settled around USD 17,000-18,000/d while transatlantic rates from the US Gulf were stable around USD15,000/d — at which level Fayette booked the Supramax Florentina to the Black Sea. Trading between northern Europe and the Mediterranean rose and Engie picked up the Supramax Young Spirit at USD 10,000/d, which remained the market level.
Fixing activity from the east coast of South America increased during the week but was still not enough to absorb the surplus of available tonnage. In the fertilizer market, Itiro booked the Panamax Golden Endurer between the Baltic and India at $18,000/d. Bainbridge, which often books fertilizer cargoes, booked the Panamax Elpida at $6,750/d from Indonesia to India.
Report By: Parya AhmadPour
