Initial H2 Russian, Kazakh sulphur heard up $400/t

26 June 2008 17:22  [Source: ICIS news]

LONDON (ICIS news)--Initial second-half 2008 contract settlements have been reported for Russian and Kazakh sulphur at increases of around $400/tonne (€256/tonne) over January-June levels, market sources said on Thursday.

 

ICEC is understood to have agreed second-half contracts with all markets, except Morocco, at $800-825/tonne CFR (cost and freight).

 

The markets include Tunisia, Israel, Turkey, Spain, Senegal and Brazil. ICEC is expected to agree with Morocco at a similar price level by the end of the week.

 

First-half prices in key buyer markets Tunisia and Morocco were agreed at $420-440/tonne CFR.

 

ICEC markets Kazakh sulphur for TengizChevroil to a number of markets and holds an allocation of 1.5m tonnes of Russian sulphur from Gazprom Export for shipment to Tunisia (800,000 tonnes), Israel (300,000 tonnes) and Brazil (400,000 tonnes).

 

Middle East producers have been in Tunisia and Morocco this week to start negotiations for second-half contracts.

 

The producers are targeting prices in excess of $1,000/tonne CFR for their contracts, although these offers are understood to have been rejected.

 

Initial counter offers from North African buyers are rumoured to have been just above $800/tonne CFR, sources said.

 

However, Middle East producers remain confident of achieving higher prices in North Africa than those agreed for Russian sulphur.

 

They say that Russian sulphur can only be exported to certain countries, while their product can easily be diverted elsewhere, putting them in a stronger position.

 

Sulphur prices have soared this year on the back of tight supply globally and strong demand from the phosphate fertilizer industry.

 

($1 = €0.64)

 

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By: Rebecca Clarke
+44 20 8652 3214

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