30 January 2012 10:47 [Source: ICIS news]
LONDON (ICIS)--First-quarter US Tampa sulphur contracts have settled down by 22% to $172/long ton (€131/long ton), US-based Mosaic said on Monday.
On a cost and freight (CFR) basis, the phosphate fertilizer producer is the first to settle sulphur contracts in Tampa for the first quarter.
Other outstanding first-quarter contracts are expected to follow the $48/long ton drop.
The decrease fell within expectations of a $20-60/long ton drop, prompted by declining global sulphur prices due to weaker downstream demand for phosphates.
In response to declining phosphates demand, and hence spot prices, Mosaic announced earlier in January that it is cutting di-ammonium phosphate (DAP) and mono-ammonium phosphate (MAP) production by 250,000 tonnes in the first quarter.
The quantity is equivalent to around 125,000 tonnes of sulphur, meaning that the producer will have to reduce its sulphur spot purchases and fill its inventory space to allow for continual off-take of contract quantities.
US Tampa prices had been stable for three quarters at $220/long ton CFR since April 2011.
Sulphur is a key raw material in the production of phosphate fertilizers, including DAP and MAP.
($1 = €0.76)
For more on sulphur visit ICIS pricing fertilizers
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