Sulfur Market in Brief
Stable is the word to describe this week’s market despite a few markets being softened by a dollar or two. However, there are doubts on whether this price stability is a reflection of market resilience or just a general lack of activity. A low level of activity seems to be the most popular conclusion of the Muslim’s Eid celebrations, China’s Dragon Boat Festival, and the impending industry conference in Montreal.
The next round of spot buying - outside of the current open tenders - is now expected to be a case of 'who blinks first', as both sellers and buyers sit on the side-lines waiting for clear pricing signals before diving back in to the spot market. Also, the impending start of 3Q negotiations will keep ll except those with immediate need out of the market, as positions are protected until conclusions are drawn.
Active Forces in the Market
Market Outlook in Next Month
Over the past three years, a sulfur price recovery has started sometime between the middle of the second quarter and the middle of the third quarter. And there could be some strategic positions being held in the market at the moment with the supply-side waiting for signs of this to be started again. But the bleak outlook downstream in the phosphates sector, alongside rising stock levels in China particularly, do not point to a sustained price recovery in the short-term.
Asia
A lack of price confidence continues to hamper spot trading during another quiet week for the market. A major industry event next week, alongside imminent Dragon Boat Festival holidays, also did little to encourage activity. There is a lack of Mideast granular being offered firm, which buyers attribute to Eid celebrations as well as traders withdrawing, awaiting better prices.
China
In the south, there are minimal firm bids or offers, but those being tabled are heard in the mid-to-high-USD110s/MT CFR for prompt shipment. There are also reports of a granular deal done last week at USD115/MT CFR, but other major buyers say Mideast tonnes are not currently available at this price.
Crushed lump business has dried up, with no trades reported or price indications heard.
Molten sulphur is indicated in the mid-USD90s/MT CFR for imports but demand is thin and the supply/demand picture is being described as balanced with there being some supply tightness. The China CFR price has been held steady at USD95-118/MT.
Sinopec has held Puguang prices fl at once again. Wanzhou sulphur is Yn990/MT for a sixth week and Dazhou sulphur is Yn880/MT for a fourth week. The site is producing around 5,000t/d and stocks are understood to be at around 120,000t. Late last week, a Hubei end-user secured around 30,000t in the range of Yn970-975/MT whilst bids are now in the midYn960s-970/MT, equivalent to around USD117/MT CFR. Molten sulphur is at Yn880-930/MT ex-tank Shandong. In the paper market, July was trading at Yn973/MT at the start of this week but prices declined to Yn967/MT for July and Yn975/MT for August near press time.
India
The Indian spot market is remaining quiet with contract deliveries covering demand at the moment. Market participants do anticipate demand returning following next week's industry conference. The MV Densa Puma discharged around 35,000t of sulphur for IFFCO this week. The cargo was loaded by trader BGN under contract. BGN expects to load another 50,000t cargo for IFFCO in mid-July, to cover its third quarter contract commitments.
South Korea
South Korea's largest refiner SK Innovation, is planning to invest 250bn won (USD212mn) in environmental upgrades at its 870,000 b/d Ulsan complex by 2023, including the full conversion of power generation feedstock to LNG.
Middle East
The Eid holiday has limited spot business this week along with a general lack of availability understood to be in the region for June loaders. An end-July loader has been sold to Madagascar but the cargo falls outside of the Middle East assessment methodology.
Iran
Iranian suppliers Khark Petrochemical's (KHIPC) and IGCC have each issued sales tenders for granular sulphur this week, totalling 80,000t. KHIPC is offering 30,000t +/-10pc of granular sulphur. The cargo is to load on 15-20 June and bids are requested on an FOB Kharg Island basis.
Iran's IGCC is also offering 50,000t of granular sulphur. The cargo is to load during the second half of June and bids are requested on a fob Assaluyeh basis. The last sale of Iranian granular sulphur was completed in mid-May, when IGCC awarded a granular sulphur sales tender for the same volume at USD85/MT fob Assaluyeh. The company does not expect to issue any crushed lump sales tenders this year, with the majority of its availability currently being allocated to the domestic market.
Kuwait
Kuwaiti state-owned refiner and sulphur producer KPC has lowered its June Kuwait Sulphur Price (KSP) by USD1/MT compared with May, to USD101/MT fob Kuwait.
Qatar
The monthly sulphur tender from Qatari state owned marketer Muntajat for a 35,000t July loading cargo closes on 18 June.
UAE
Abu Dhabi state-owned sulphur producer Adnoc has set its June Official Selling Price (OSP) for sulphur at USD102/MT fob Ruwais, USD3/MT below its May price.
Africa
The North Africa CFR price has been assessed at USD88-99/MT following the recent sale of an FSU cargo to the region, which is priced in the high-USD90s/MT CFR.
Egypt
Suppliers are still receiving bids under USD95/MT CFR for granular sulphur and under USD90/MT CFR for crushed lumps. The MV Rek Titan was scheduled to arrive at Abu Qir port on 5 June. The vessel, which has a deadweight of 7,643t, departed Constantza, Romania on 1 June and was loaded by trader BGN.
Morocco
In the freight market there is a check for 50,000t loading Yanbu, Saudi Red Sea 16-18 June for shipment to Morocco.
South Africa
Pulp and paper producer Sappi has secured 6,000t of granular sulphur from a trader at USD112/MT CFR Richards Bay. The cargo is understood to have been purchased at port on a CFR basis. The company may return to the market for a larger size cargo at the end of June, if prices are favorable. Fertilizer producer Foskor is still understood to be looking for a second-half June loader.
Freight Market Overview
Fertilizer freight rates remained relatively stable this week. Charterers were reportedly more active in the Atlantic basin and although some fixtures were concluded above last-done levels, there were not sufficient new cargoes to push the market higher.
Some transatlantic cargoes from the US Gulf were reportedly booked as high as USD14,000/d but some participants placed the rate closer to USD12,000/d for standard terms. The rate for a longer transatlantic journey from east coast of South America to the east Mediterranean was priced at around USD16,000/d as an unnamed charterer put the Supramax Equinox Star on subjects on this route for mid-June loading.
The cost of 380cst material at Singapore reached USD373.90/MT on 4 June down from USD416.70/MT on 22 May while the cost for the same grade at Rotterdam reached USD358.50/MT down from USD394.50/MT over the same time period. Movement on prices was limited on 5 June because of a public holiday in Singapore. Fertilizer fixtures were limited during the week.
Report By: Parya AhmadPour
