Sulfur Market in Brief
This week there has been a Flat-to-soft pricing sentiment in the global sulphur market. Geopolitical trade tensions, weak finished fertilizer market sentiment, and a general sense of uncertainty, are all hampering business to certain degrees across the globe.
The latest spot sales tender in the Middle East has helped to support the fob price to an extent, and a total absence of any confirmed business in markets east of Suez is helping the CFR prices being kept steady. However Chinese port prices have taken another hit, with stocks build and the foresaid uncertainties impact the buyers’ confidence.
In the West, market activity remains largely static as the previous purchases and contract commitments limited trade. Any observed price movements are on firm bid/offer prices softening and small Mediterranean trades.
Active Forces in the Market
Market Outlook in Next Month
Despite attitude in the immediate market remaining rough, expectations for the end of second quarter and start of third quarter are still vague.
Market participants are indeed expecting third quarter contract prices, almost in their entirety, to settle down on second quarter, but exactly where they settle will influence the next movements in the spot market.
If contracts settle in alignment or above spot prices at that time, it could then be said that a market floor has been found; if they settle lower, then the market could still be headed on a downward path.
Asia
China
Currency fluctuations, weak downstream sentiment, rising port stocks, and a general sense of uncertainty among global trade tensions have hampered granular sulphur business again this week. There is a lack of confidence among both buyers and sellers who are unclear on future price direction. As a result, bids are few and far between, spanning sub-USD115/MT CFR in the south to USD 117-118/MT CFR in the river.
June loading cargoes from the Middle East are already well-committed and firm offers are thin. But there were unconfirmed reports this week of a Middle East cargo having been offered to the south at USD 117/MT CFR, and reports of three cargoes having been sold of Middle East and Canadian origin in the high-USD 110s to low-USD 120s/MT CFR. Considering Chinese price indications today, traders would struggle to break-even based on the latest Middle East spot conclusion in the range of USD 103-104/MT fob.
Iranian/MTurkmenistan crushed lump cargoes are under discussion at prices below USD 110/MT CFR in southern ports, and buyer price targets are sitting as low as USD 100/MT CFR. For the molten market, there is no new business confirmed concluded, but there is some tightness in South Korean supply, with currently maintenance underway. The China CFR price has been assessed at USD 98-121/MT CFR with no business confirmed.
The MV Tengda departed Ruwais port, UAE on 14 May and is scheduled to arrive a CJK port, on 4 June. The vessel has a deadweight of 38,340t.
Domestic market
Wanzhou prices have been held flat once again by Sinopec at Yn990/MT and Dazhou tonnes have been increased once again by Yn10/MT to now total Yn880/MT. Puguang production rates are still pegged at 5,000t/d and stocks are indicated to be totalling 110,000t, but sales of Dazhou stored tonnes are healthy.
Port prices started the week in the range of Yn975-Yn980/MT and had fallen to Yn960/MT by Wednesday. At press time, they had slipped further on a trade in the range of Yn955-960/MT and bids have now fallen to Yn950/MT, reflecting around USD 116/MT CFR.
India
The MV Sea Lord is scheduled to arrive at Jaigad port on the West Coast of India on 18 May. The vessel is carrying around 18,000t of sulphur loaded in Saudi Arabia and has been secured by four buyers. A price in the range of USD 110-115/MT CFR is attached to the vessel but the deal was concluded outside of the assessment window and is not considered to be representative of the CFR India price by market participants, so has not been included for assessment.
Freight between the Middle East and West Coast India is currently indicated at around USD 9/MT for 30,000-35,000t cargoes. In the freight market there are two inquiries for lots loading at Ruwais, UAE or Umm Said, Qatar for shipment to India:
14,000-15,000t loading 28-31 May for shipment to West Coast India
11,000-13,000t loading 28-31 May for shipment to Muntra/ Goa range.
Trading company BGN is loading 35,000t aboard the MV Densa Puma on 16 May for shipment to fertilizer producer IFFCO.
On the consumer maintenance side, IFFCO restarted its plant on 15 May following maintenance commencing at the company's Paradeep plant in the second week of April. FACT restarted its ammonia plant on 16 May with the sulphuric acid plant following next week and the NPS plant at the end of May. Paradeep Phosphates Limited (PPL) is expecting to resume operations by the end of the month, after starting works in early April, and will not tender for sulphur for at least another week.
Bangladesh
The MV Sulphur Espoir has been taken out of service this week, indefinitely. The molten sulphur carrier, which has a deadweight of 3999 MT, arrived at Chittagong port 15 May and is now reported to be decommissioned or scrapped.
Middle East
The Middle East fob price has been assessed down slightly to USD 100-104/MT on the award of the latest spot sales tender. Supply is indicated to be tight in the region with lots forward sold or being shipped under contract.
Iran
The NIGC has ordered the construction of a second phase of the Ilam Gas Refinery in West Iran. The second phase would increase production capacity at the plant by 50pc. The refinery produced 60,000 MT of sulphur in the last Iranian calendar year to 20 March and exported half of this volume.
The expansion will see sulphur production capacity increase to 90,000 MT/yr. No time frame has been given yet for the expansion project. In the freight market there is a check for 30,000-45,000 MT loading Bandar Abbas 23-28 May for shipment to Zhenjiang, China.
Kuwait
In the freight market, a vessel nomination is awaited for 56,000 MT to load at Shuaiba for shipment to Indonesia.
Qatar
The spot sales tender from Qatari-state owned marketer Muntajat is understood to have been awarded slightly below the last tender which concluded at around USD 105/MT fob.
UAE
In the freight market there are two checks for cargoes loading Ruwais:
52,000-64,000t loading 18-28 May for Singapore/Japan range
37,000-55,000t loading 17-19 May for Yangtze River, China.
UAE-based storage firm BPGIC plans to build a 250,000 b/d refinery in Fujairah, with the first phase to be completed by the first quarter of 2020.
Africa
The North African CFR spot price has been assessed down to USD 88-103/MT on a drop in firm bids and offers. The bottom end.
Egypt
Firm bids from Egyptian buyers have been received in the low-USD 90s/MT CFR for granular sulphur and crushed lump price targets are now firmly in the USD 80s/MT CFR. Counter offers are closer to USD100/MT CFR for granular.
Morocco
Fertilizer producer OCP is still out of the market and is understood to be covered until mid-July.
South Africa
Shell and BP's Sapref joint venture in South Africa will shut its 180,000 b/d refinery in Durban for maintenance from 22 May until the end of July.
Freight Market Overview
Fertilizer freight rates remained relatively stable this week though the Supramax and Handysize markets diverged with more Handysize vessels becoming available in the Atlantic basin and pushing the cost of shipping down. Supramax rates ticked up slightly during the week on
the back of a declining volume of tonnage as booked vessels were not replaced with open vessels. But this tightness in supply was focussed on prompt loading dates and participants expected more ships to become available in early June and beyond.
In the transatlantic market, Brazilian charterers looked to book cargoes to northern Europe at USD 14,000/d while shipments from the US Gulf were discussed around USD 12,000/d. The inverse journey was priced down at USD 5,000/d. For long fronthaul voyages from the east coast of South America to China, volumes continued to ramp up and charterers are now paying USD 14,000/d along with a USD 400,000 ballast bonus.
In the fertilizer market, several Europe or Baltic cargoes were reportedly booked to either east coast of South America or India/China. Voyages to South America were priced at USD 5,000/d. Elsewhere, Rashtriya Chemicals and Fertilizers (RCF) reportedly booked an unnamed vessel for a 40,000t urea cargo from Oman to Kandla, loading from 17-19 May, at USD 11.05/MT.
Report By: Parya AhmadPour
