Phosphate fertilizer producer GCT agrees H2, Q3 sulphur contracts

02 July 2010 14:47  [Source: ICIS news]

LONDON (ICIS news)--Tunisian phosphate fertilizer producer Groupe Chimique Tunisien (GCT) has agreed second-half and third-quarter 2010 sulphur contracts with its suppliers, market sources said on Friday.

GCT was understood to have agreed second-half contracts with two Middle East sulphur producers, Abu Dhabi National Oil Co (Adnoc) and Kuwait Petroleum Corp (KPC), in the mid/high $80s/tonne (€68-70/tonne) CFR (cost and freight). The new contract price was below the first half’s level of around $100/tonne CFR.

Adnoc and KPC had initially been looking for a price in the $90s/tonne CFR, according to officials from both companies. The agreed price, netting back to the $50s/tonne FOB (free on board), was below KPC’s price ideas for eastern customers. The KPC official said this was a result of price competition with Black Sea suppliers.

Meanwhile, sources said that GCT had failed to conclude a contract with Saudi Aramco for the second half of 2010. The producer’s initial price idea for North Africa was close to $60/tonne FOB, an Aramco official said. Based on freight estimates of $35/tonne, the price would imply mid $90s/tonne CFR.

With its Black Sea sulphur suppliers, the Tunisian buyer has settled second-half contracts in the low $80s/tonne CFR.

Russian producer GazpromExport (GPE) had indicated earlier that it would not be able to offer in the $80s/tonne CFR to North African buyers due to production costs, according to a GPE official.

GCT only renewed its second-half contracts with one of its two Italian suppliers at $60/tonne CFR, because the other supplier would not have enough sulphur availability to supply to the buyer for the third quarter.

GCT has also agreed second-half and third-quarter agreements with European suppliers in the low $80s/tonne CFR, sources said.

During the second-quarter, the buyer rejected price offers from a major European producer in the high $140s/tonne CFR, citing comfortable inventory levels.

All of GCT’s contract negotiations for the second-half and third-quarter of 2010 have now ended, sources said. Meanwhile, contract negotiations for another North African buyer, Morocco’s Office Cherifien des Phosphates (OCP), were believed to be close to conclusions.

($1 = €0.80)

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By: Freda Gordon
44 208 652 3214

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