06 January 2012 15:52 [Source: ICIS news]
LONDON (ICIS)--The sulphur market continues to soften with first-quarter contracts between Kuwait Petroleum Corp (KPC) and customers finalised at a $40/tonne (€31/tonne) drop from the last quarter, market sources said on Friday.
At least three traders confirmed concluding first-quarter contracts with KPC, citing a range of $170–180/tonne FOB (free on board) Shuaiba, down from $210–215/tonne FOB in the fourth quarter.
Another trader who remains in negotiation says the producer is firm on its offer at $175/tonne FOB.
The decline in sulphur prices is down to dwindling demand from the downstream phosphate fertilizer market, dampened further by news of fertilizer producers reducing their output in the first quarter because of declining phosphate prices, including Mosaic in the US, PhosAgro in Russia and Office Cherifien des Phosphates (OCP) in Morocco.
Major Middle East producers, including Abu Dhabi National Oil Co (ADNOC) and Saudi Aramco, have not yet announced any settlements, and are understood to be firm on their offers at around $190/tonne FOB, countered by traders at $160–165/tonne FOB.
The majority of sulphur contract negotiations across the globe are ongoing because buyers are in no rush to settle as prices continue to weaken.
No conclusions have been heard yet in North America, but suppliers have lowered their targets to the mid/high-$190s/tonne FOB Vancouver, from $205–215/tonne FOB tabled in end December.
In light of high phosphate inventories, Brazilian buyers have also adjusted their price ideas down by $10/tonne to around $200/tonne CFR from two weeks ago.
The demand situation in North Africa is bleaker, with OCP reducing its phosphate output in Q1 and Group Chimique Tunisien’s (GCT) phosphate plants are still in dire straits due to ?xml:namespace>
The only other region with news of first-quarter contract settlements is northwest
($1 = €0.78)
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