Middle East sulphur prices fall more than $100/t

02 September 2008 15:10  [Source: ICIS news]

LONDON (ICIS news)--Middle East sulphur prices have dropped more than $100/tonne following a spot sale out of Kuwait amid improving supply levels and weak demand, market sources said on Tuesday.

 

An official at Kuwait Petroleum Corp (KPC) confirmed that it had sold a 25,000 tonnes cargo to trader Transammonia for late August lifting from Shuaiba at a price in the low-$600s/tonne FOB (free on board).

 

This price is down from previous Middle East price indications of $770/tonne FOB during August.

 

The producer said this was a distress cargo that had to be sold prompt and as such the price was lower.

 

However, the spot sale comes amid improving supply levels in the Middle East due to non-agreement of contracts and weak demand in key markets China and India, which has seen delivered prices in those markets drop off.

 

KPC did not agree a second-half contract with Morocco’s Office Cherifien des Phosphates (OCP) or with Shell for third-quarter shipments to China and as such now has more tonnage available.

 

The producer was also offering a 25,000-30,000 tonne cargo for end of September shipment but said it expected this to be sold at the prevailing market price rather than at an artificially low price as it was not a distress cargo.

 

KPC is looking to what price Abu Dhabi National Oil Co (Adnoc) declares for September, as this is widely viewed as an indicator of price levels and direction.

 

The producer is due to declare its September price in the next couple of days and traders were expecting a sharp decrease from the $770/tonne FOB August price.

 

To discuss issues facing the chemicals industry visit ICIS connect

By: Rebecca Clarke
+44 20 8652 3214

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