Middle East Q2 sulphur exports rise $200/t plus

01 April 2008 14:44  [Source: ICIS news]

LONDON (ICIS news)--Middle East sulphur prices for second-quarter shipment to China and India are rising by at least $200/tonne on the back of a tight supply situation, market sources said on Tuesday.

 

Abu Dhabi National Oil Co (Adnoc) has agreed some second-quarter contract prices with traders for shipments to China at around $650/tonne FOB (free on board) Ruwais, up from around $450/tonne FOB in the first quarter of this year.

 

Meanwhile, Kuwait Petroleum Corporation (KPC) said it had agreed second-quarter contracts for shipments to India at $675/tonne FOB, up from the $440s/tonne FOB for January-March 2008.

  

KPC remains in talks on prices for April-June shipment to China but is looking for a price in the mid-$600s/tonne FOB, up from around $450/tonne FOB in the first quarter.

 

Another major Middle East producer, Saudi Aramco, is yet to settle any second quarter contracts, but is targeting prices in the mid-$600s/tonne FOB for shipments to China, with a premium of more than $10/tonne for shipments to India. Aramco agreed its first quarter prices at $445-450/tonne FOB.

 

These increases come at a time when supply is extremely tight in the Middle East due to reduced natural gas production, delays in new projects coming onstream and extremely strong demand last year and at the start of this year.

 

Both Adnoc and Aramco are only loading minimum volumes, exercising the minus 10% options under their contracts. Aramco has also had to delays some contract shipments and is understood to be short of around one cargo per month.

 

KPC is also considering exercising its option to ship minimum volumes to contract customers.

By: Rebecca Clarke
+44 20 8652 3214

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