Kuwait Petroleum sulphur tender award pushes prices higher

13 August 2010 12:48  [Source: ICIS news]

LONDON (ICIS)--Kuwait Petroleum Corp has awarded a sulphur sales tender at a price nearly $20/tonne (€15.60/tonne) above the last completed business out of the Middle East amid soaring spot prices and increasing demand, market sources said on Friday.

Kuwait Petroleum awarded its 12 August tender at $125-130/tonne FOB (free on board) to one of its current customers, a company official said.

The producer tendered for 25,000 tonnes of granular sulphur for 17-19 September loading in Shuaiba. The official said the cargo was likely to be shipped to southeast Asia.

The tender award has pushed prices up nearly $20/tonne from last week’s tender by Iran-based Petrochemical Commercial Co, which was at $107/tonne FOB.

The price was also above the monthly sulphur price set by Abu Dhabi National Oil Co (Adnoc) for August, which was set at $110/tonne FOB Ruwais.

Sulphur spot prices, which bottomed out in early July, have soared since last week. The upbeat outlook in the market was driven by firming downstream demand.

Strong demand in the diammonium phosphate (DAP) market, mainly due to the large amount of material committed for export to India, has led DAP prices to firm.

In addition, anticipation of strong sulphur demand during the autumn fertilizer application season in China – a high-volume import market – pushed sulphur prices in the region this week to $125-130/tonne CFR (cost and freight).

A trader said: “Demand in China has definitely picked up recently. And as Chinese buyers are willing to pay higher prices, FOB prices in the Middle East are also going up.”

Tight sulphur supply in the Middle East region, anticipated logistical problems over the winter season in Russia and Canada, and surging crop prices following Russia’s ban on grain exports have also fuelled sulphur prices.

“Everyone’s very bullish at the moment. I think this price rise will last for a month or two. When prices are too high, Chinese buyers will hide again and prices will crash,” added the trader.

Sulphur is a raw material for phosphate fertilizer production.

($1 = €0.78)

Click here for more information on sulphur and fertilizers
Read Paul Hodges’ Chemicals and the Economy blog

By: Freda Gordon
44 208 652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly