Sulfur Market in Brief
This week, the Labors’ Day holiday holidays have put much of the market on pause, except for Iran, Turkmenistan, and Mediterranean which have been holding the market weight.
In spite of the certain level of liquidity, Mediterranean business concluded within the current CFR and FOB ranges continued to hold steady like the rest of the Suez market where trade is almost completely absent in many key regions.
Especially as buyers in key Latin American and North African markets in particular remain on the side lines. In Iran, granular prices ticked up by just $1/t on the award of the IGCC spot tender. Whilst in Turkmenistan, the latest exchange tender from Turkmengas saw over 300,000t be sold for onwards shipment and sale in to the supply chain within the next three months. The target market will most likely be China.
Active Forces in the Market
Market Outlook in Next Month
Sellers of the market are looking towards the third quarter with hopes that the sulphur price will see some improvements globally. However, the summer holiday season may prevent trade holding at an increased level on the second quarter for the entire period.
Asia
China
The latter part of the week the Chinese market was shut down due to the Labour Day holidays. However two unconfirmed deals have been reported ranging low to mid USD 120s/MT CFR for May Middle East loading cargos.
In spite of firm offers in the south staying persistently in the USD 110s/MT CFR, offers are lacking but firm bids in the river are now no lower than USD120/MT CFR. It has been understood that river bids are led by domestic traders.
The latest Iranian sales tender award and the Middle East lifting prices announced so far are also supporting granular sulphur prices in the current firm bid range of mid/high-USD110s to low-USD120s/MT CFR. And before the holidays commenced, negotiations were also heard to be taking place within the range on a north/south China spread.
No crushed lump business has been reported this week, but prices are still placed in the high-USD100s/MT CFR. In the molten market, there are reports of two deals having been concluded in the mid-USD100s/MT CFR of Korean origin, but other sellers continue to put the molten price below USD100/MT CFR, with demand still waning as safety checks continue.
The China CFR price has been assessed at USD98-121/MT, with the increase supported by persistent firm buy-side bids. In the freight market there is an inquiry for 4-6 shipments of 35,000-40,000 MT cargoes across 1 June - 31 December for discharge in Fangcheng with the option of Zhenjiang loading at either Ruwais port, UAE or Ras Laffan, Qatar.
Domestic market
Pugang prices were flat-to-firm from Sinopec this week. Wanzhou tones are up Yn10/MT to Yn990 whilst Dazhou prices were held flat at Yn860/MT. At the start of the week port prices were placed at Yn990- Yn1,000/MT, equivalent to mid-USD 120s/MT CFR and remained there across the week because of the Labour Day holidays. The paper market has been generally stable at Yn1,006/MT for June and Yn1,018/MT for July.
China’s first quarter sulphur imports have seen 8% on-year gains, as well as 18% gains on the fourth quarter of 2018, to total 2.8mn MT. But both domestic and international prices have continued to soften because of a weaker end-product fertilizer market as well as a reduced appetite for spot cargoes, with more contract off-take agreements continuing to satisfy China's demand.
Middle East supply has dominated first quarter imports, accounting for 56% of overall deliveries, at around 1.6mn MT. Qatar is the lead supplier so far this year and has shipped 464,000 MT, up by 98%. Imports of Iranian product have also surged by 139%, to 374,000 MT, as US trade sanctions on Iran continue to narrow the country’s alternative export options.
India
The import market is still nonexistent with buyers in no hurry to enter the market and recent maintenances only just coming to their end-time. Domestically, suppliers indicate that demand is stable.
Weather warnings have been issued because of cyclonic storm Fani for Odisha, West Bengal and Srikakulam, and Vijayanagaram districts of Andhra Pradesh coasts, but with key sulphur consumers still under turnaround on the large part, no notable impacts on sulphur are expected. When it comes to the export market, inquiries for May loading cargoes are said to be healthy.
Middle East
No new spot business has been reported or confirmed in the Middle East, but announced monthly lifting prices are so far sitting in the low-USD100s/MT FOB.
Iran
Fob Iran granular prices have firmed by USD1/MT this week following the award by sulphur supplier IGCC of its re-issued sulphur sales tender for 50,000 MT at USD 89/MT fob Assaluyeh. The cargo will load during the second half of May. IGCC expects to next enter the spot market with a sulphur sales tender in June. The company has also indicated that it is at the latter stages of its term tender negotiations, and expects to finalize these in the coming weeks.
Qatar
Qatar's state-owned marketer Muntajat has set the May Qatar Sulphur Price (QSP) at USD 102/MT FOB Ras Laffan, which is down by USD1/t on the April price.
Africa
Spot activity for full-sized cargoes on a CFR North Africa basis remains absent as key end-users are either covered or still seeking tones at target prices.
Egypt
Prices for crushed lumps and granular sulphur are still understood to be in the range of low/mid-USD 90s/MT CFR to mid-USD100s/MT CFR.
Libya
Libya's state-owned NOC has condemned the militarization of its energy infrastructure, following a spate of incidents in recent weeks, including the capture of NOC's Es Sider airfield, the attempted takeover of NOC tug boats and the use of the Ras Lanuf terminal by warships and other military vessels.
Morocco
Around 341,000t is currently scheduled for discharge at Jorf Lasfar port. The line-up currently comprises seven bulk sulphur carrying vessels, at least six of which were loaded at Ruwais port, UAE.
Fertilizer producer OCP is still out of the spot market and is expected to remain so for the rest of the quarter with healthy stocks and continuous contract deliveries satisfying demand.
South Africa
South African phosphates producer Foskor has resumed production following a worker strike which cut production to 25-40% of capacity.
First quarter sulphur imports to South Africa totaled 177,000 MT, flat on the year, but down by 17% on the fourth quarter of 2018. Kazakhstan was the lead supplier, owing to greater Kashagan availability, but its deliveries were down by 29%, to 57,000 MT.
The remaining balance came from Middle East suppliers, largely because of close proximity and competitive freight rates. Saudi Arabia and the UAE supplied 45,000 MT and 38,000 MT, with volumes from the UAE up from zero.
Freight Market Overview
As public holidays both in Europe and Asia-Pacific disrupted booking activity, fertilizer freight rates experienced a fall this week. Charterers were slow to make new cargoes available and owners started to compete to secure what remained. But as a market participant suggested, the shortage of cargoes was not just because of the holiday disruptions but also because of an overall lack of material. Coal cargoes from the US Gulf have been limited and the grain markets have been focused on the Panamax class rather than Supramax.
For the moment, the transatlantic rate settled at USD11,000/d as XO Shipping booked the Supramax CL Boy at this level from the US to Italy. The Supramax Shou Chen Shan was booked on a longer transatlantic voyage from South America to the east Mediterranean at USD 13,500/d but this was at a premium because of the longer voyage.
In the fertilizer market, Seacoast put the Supramax Poseidon S on subjects at USD7,000/d for a fertilizer cargo from the Mideast Gulf to east coast India while AHT fixed the Handysize Teng Da from the Mideast Gulf to China with a sulphur cargo.
Report By: Mohammad Reza Barakchian
