Sulfur Market in Brief
The prices for Granular Sulfur in most markets are trending flat to slightly softer with the slim interest available this week.
As the market participants are seeking for clarity over the price direction, activity levels are low. The main focus of participants will be on Muntajat monthly sales tender award, next week, which shall be providing some pricing guidance.
However, some interest in Indian market has created some movements with the fertilizer major Paradeep Phosphates issuing a buying tender of 35k-40k MT July shipment this week. This is following 12 weeks of spot market absence, and buyer Coromandel (CIL) also understood to be enquiring for spot tonnage.
Fob market activity-centered on the reported award of a 30,000MT sales tender from Iran's Khark Petrochemicals, as well as deals reported in North America, at slightly lower levels.
Active Forces in the Market
Inventory levels at Yangtze River ports are reported to stand at between 1.72mn MT and 1.9mn MT, the highest level this year. This is likely to limit import demand.
Market Outlook in Next Month
The inability of solid sulphur to load at Beaumont port, US Gulf, is expected to last until the start of 2020. Rather than tightening the market there are expectations this could contribute to some lengthening as US Gulf solid sulphur imports will be reduced because of the increased availability of US molten sulphur, making more cargoes available for other end-user markets..
Asia
China
Buyers and traders are still waiting for a market signal to provide clearer price guidance and spark some activity, after weeks of stagnation. Some participants think this may only come with third quarter Middle East contract conclusions. This week, the market remained slow and prices continued to hold at existing levels amid a dearth of spot trade. The downstream phosphates sector shows no sign of improving and sulphur port stocks continue to build, now estimated closer to 1.9mn t. Both of these factors encourage only essential spot purchases. In the Yangtze River, a 25,000t cargo of Iranian granular sulphur was sold at USD115/MT CFR for July arrival.
Middle East origin granular was offered at USD120-121/MT CFR for July arrival, but firm bids were up to a maximum of USD118/MT CFR. While the gap is not large, neither side is willing to concede ground in today’s uncertain market.
An 8,000t cargo of Vietnamese granular is on offer, and understood to be attracting bids around USD115/MT CFR. A cargo from west coast North America is also understood to have been sold to China at a similar level. In the south, Turkmen granular sulphur is offered around USD116-117/MT CFR. Middle East granular is being bid at USD115-116/MT CFR for July arrival, but there are few, if any, firm offers.
Reports of a trade at USD118/MT CFR could not be confirmed. Crushed lump business still lacks in the Chinese market with no price indications heard. Molten sulphur is currently indicated in the range of USD93- 95/MT CFR with a sale of 3,000t concluded in the range. The China CFR price has been assessed at USD93-118/MT CFR. Sinopec held its Puguang prices stable again this week, at Yn990/MT Wanzhou and Yn880/MT Dazhou. Sulphur prices held at around Yn970/MT at Yangtze River ports most of the week, reflecting approximately USD118/MT CFR.
Some business at Yn960/MT was reported late in the week. Paper prices have firmed slightly to around Yn973/MT for July and Yn985/MT for August. Molten sulphur is being indicated in a wider range of Yn900-950/MT ex-tank Shandong. Port stock official figures were are 1.72mn t earlier this week, up 10,000t but at press time market participants were indicating inventories closer to 1.8-2mn t.
India
Fertilizer producer Paradeep Phosphate (PPL) has returned to the spot market seeking 35,000-40,000t through a tender which closes on 17 June. The cargo is for arrival 5-10 July. PPL was last in the spot market in late-February. Queries for sulphur spot sulphur demand have also been heard from fertilizer producer CIL. Offers to the Indian market have so far been reported within the current India CFR range.
Water shortages in India had been limiting industrial operations on all sides of the market, but some suppliers are now hopeful the coming monsoon will prompt a strong return in domestic sulphur demand. Port authorities in the western Indian state of Gujarat are halting operations as Cyclone Varu approaches.
Turkmenistan
A number of bids for Turkmengas' recent sales tender for 590,000t of bulk sulphur are understood to have been tabled at around USD10/MT ex-works. But the tender has not yet been awarded.
Middle East
Spot business in the Middle East is lacking, following the Eid holidays as well as the IFA conference in Montreal, Canada this week. Third quarter contract negotiations are expected to now take precedent in the region and the only spot business, on an fob Middle East basis, expected to come from Qatar, with Muntajat's 35,000t monthly tender.
Iran
Fob Iran prices have softened to USD71-81/MT this week, on the reported award of supplier KHIPC's 30,000t sales tender. The award has not been confirmed by all transacting parties but prices are widely reported within this range.
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 spot sales tender from Qatari-state owned marketer Muntajat will close on 18 June.
UAE
Ruwais port remains hampered by operational constraints. The sulphur handling terminal which links sulphur from the Habshan and Shah Fields remains under maintenance, and could remain so until early-August. All of Adnoc's sulphur exports are currently flowing through just one berth, which is causing congestion and prolonged delays.
Two tankers are in distress in the Gulf of Oman. A Fujairah port official said distress calls were received earlier today from two vessels, with ship brokers reporting that at least one has been attacked.
Africa
Egypt
Eid holidays have slowed purchases, but end-users continue to express interest in granular material at prices in the mid-USD90s/MT CFR and below. Interest in crushed lump material is tabled at prices below USD90/MT CFR.
Morocco
Around 248,000t of bulk sulphur is currently scheduled for discharge at Jorf Lasfar, according to the latest port line-up.
South Africa
Fertilizer producer Foskor is continuing to slowly ramp up operations, following strike action last month and planned maintenance at one of the company's sulphuric acid plants.
Tunisia
Fertilzier producer Tifert has no spot sulphur requirements at the moment, and it intends to return to the market in July at the earliest, if conditions prove favourable.
Freight Market Overview
Voyage (USD/MT) fertilizer freight rates continued to trend lower this week despite a slight uptick in time charter (USD/day) market as a continued drop in fuel prices allowed owners to accept lower rates while receiving the same revenues. The cost of 380cst high sulphur bunker fuel at the port of Rotterdam reached USD355.50/MT on 12 June down from USDUSD388.50/MT two weeks ago on 30 May.
The price for the same grade in Singapore fell to USD372.21/MT on 12 June compared to USD403.01/ MT on 30 May. Given that Supramaxes typically burn 33 MT /d of fuel, this would mean a total saving of USD27,225 over a 25-day voyage, which would be around 49.5¢/ MT on a 55,000 MT Supramax/Ultramax cargo.
And since voyage rates have not fallen in line with fuel prices, owners’ revenues — and time charter rates — have actually moved higher. Booking activity was slow at the start of the week but time charter rates did increase despite the drop in voyage rates. Transatlantic cargoes from the US Gulf were under discussion as high as USD14,000/d with front haul journeys from Brazil to China priced at USD17,000/d and moving higher.
Report By: Naeemeh Ferdowsi
