Sulphur markets subdued on weak demand, prices

28 August 2008 16:24  [Source: ICIS news]

LONDON (ICIS news)--Sulphur markets worldwide are quiet amid weak demand, falling international prices and uncertainty over Chinese fertilizer export taxes, market sources said on Thursday.

Expectations that prices will drop further has prompted buyers to step away from the market before making their move to buy.

At its peak earlier this year sulphur was trading at around $800/tonne (€544/tonne) CFR (cost and freight) China and buyer price ideas are now below $700/tonne CFR and expected to drop off further.

Lower prices have come on the back of weak demand from major market China. An increase in the export tax on Chinese phosphates earlier this year dented demand for sulphur.

Chinese sulphur stocks are now reported above 1m tonnes and phosphates stocks above 2m tonnes and phosphates producers have cut output as a result, further cutting sulphur demand.

Additionally, there is uncertainty over whether the export tax will be continued, or raised or lowered, and what it will mean for sulphur demand for the rest of this year.

Reports suggest that the Chinese government has decided to keep the tax on phosphates at 135%, but there has been no official confirmation.

Middle East sulphur producers have indicated that they are waiting for clearer signals from China on the export tax before deciding whether to offer any sulphur to the market.

Indian prices have also fallen, with last done business at $680/tonne CFR, down from a deal a week earlier at $755/tonne CFR.

($1 = €0.68)

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By: Rebecca Clarke
+44 20 8652 3214

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