29 November 2011 16:21 [Source: ICIS news]
LONDON (ICIS)--Abu Dhabi National Oil Co (Adnoc) should lower its official selling price for sulphur to reflect weakened market demand, traders said on Tuesday.
The November sulphur price of $220/tonne (€165/tonne) FOB (free on board) Ruwais has failed to materialise this month, as sales in its applicable Indian market took place in the $231-242/tonne CFR (cost and freight) range. Freight rates between the Middle East and India are estimated in the low/mid-$20s/tonne.
Several traders pointed out that they had “suffered losses” in November and the December official selling price should be lowered to reflect weaker market demand.
“Indian buyers are covered,” an India-based trader said. “The east coast is served by domestic sulphur suppliers and buyers from the west coast are unlikely to issue tenders until early/mid December for January deliveries.”
A tailing pricing direction in the largest sulphur import market, China, is also expected to bring downward pressure on Indian sulphur prices next month.
Chinese sulphur prices trended downwards in recent weeks due to lower downstream demand and prices, including sulphuric acid and phosphate fertilizers. Chinese sulphur sales slipped to $215/tonne CFR this week from the low-$230s/tonne CFR in late October.
“If CFR levels are at $215/tonne CFR, the Adnoc price should be below $200/tonne FOB to reflect the market,” a Middle East-based trader added.
The UAE sulphur producer has maintained its monthly sulphur price, still perceived as a market indicator, at $220/tonne FOB since September.
($1 = € 0.75)
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