UpdateAdnoc cuts Sept sulphur $190 to $580/t

03 September 2008 11:26  [Source: ICIS news]

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LONDON (ICIS news)--Abu Dhabi National Oil Co (Adnoc) has dropped its sulphur lifting price for September by $190/tonne (€131/tonne) on improving Middle East supplies and weak demand from the key China and India markets, a company official said on Wednesday.

The price, largely viewed as an indicator of global sulphur direction, was set at $580/tonne FOB (free on board) Ruwais, down from the August price of $770/tonne FOB. 

This number is down from a peak of $820/tonne FOB in July, but at $85/tonne higher than January and $380/tonne above the same month of 2007 is still historically high.

Adnoc was attempting to bring some stability to a falling market by reducing the price by such a large amount, and did not want to see prices falling any lower, the company official said.

Adnoc had already indicated that there would be a drop in September pricing in line with market levels. Traders had suggested that the price would need to drop to around $600-620/tonne FOB to make shipments workable.

The announcement followed news that Kuwait Petroleum Corp (KPC) sold a cargo in late August in the low-$600s/tonne FOB, although the producer had insisted it was a distress cargo and not reflective of the real market level.

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

($1 = €0.69)

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By: Rebecca Clarke
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