FocusChina sulphur to rebound on peak fertilizer consumption season

06 February 2012 06:20  [Source: ICIS news]

By Natalie Hui

SINGAPORE (ICIS)--China’s sulphur prices may be in for a modest rebound because of a seasonal pick-up in sales of downstream fertilizer phosphates starting mid-February, market players said on Monday.

Demand peaks in March to April when the spring season is in full swing - conducive to applying fertilizers on crops in China. But weak international values of sulphur will likely temper any price gains in China, they said.

Sulphur prices in the eastern and southern regions of China are expected to hover within the $205-215/tonne (€156-163/tonne) CFR (cost and freight) China range in the first three months 2012, after falling in the December 2011 quarter, market players said.

On 3 February 2012, spot prices were assessed at $190-205/tonne CFR China, up $5/tonne week on week, according to ICIS China data.

Prices hit a three-year high of $235-250/tonne CFR China in June 2011, backed by brisk domestic demand from phosphate producers, which had been exporting strong volumes of fertilizers. But prices started tumbling in the fourth quarter following the government’s imposition of high tariff on shipping out phosphates, despite weak domestic demand.

“Domestic traders showed more interest in sulphur imports after [the] Chinese New Year holiday [22-28 January], despite mass arrivals in January, as most were heading directly for end-users,” a China-based trader said.

“In view of the impending peak consumption season for fertilizers, traders registered more buying intentions,” he said.

China’s domestic ammonium phosphates prices were stable to higher in the week ending 3 February, with offers for 55% monoammonium phosphate (MAP) powder quoted at CNY2,700/tonne ($428/tonne) EXW (ex-warehouse), while offers for 64% diammonium phosphate (DAP) increased to CNY3,300-3,400/tonne DEL (delivered) NE (northeast) China, up by CNY50/tonne week on the week at the high end of the range, a market player said.

Aramco Trading in Saudi Arabia has maintained a bullish stance on the Chinese sulphur market, said a company source, adding that the company had sold a spot cargo into China in the week after the Lunar New Year holiday, priced in the mid-$180/tonne levels FOB (free on board).

Adnoc is close to finalising its first-quarter sulphur prices with a Japanese trader at below $180/tonne FOB.

Meanwhile, first-quarter sulphur contracts between Kuwait Petroleum Company (KPC) and customers have been finalised at $170-180/tonne FOB.

In other markets, however, spot sulphur prices are stable to lower.

In the Middle East, sulphur prices were assessed unchanged at $170-190/tonne FOB, according to ICIS data.

In India, spot prices are on a decline, with a 35,000-tonne purchase tender by Paradeep Phosphate Ltd (PPL) recently awarded at $182/tonne CFR, down $4/tonne or 2% lower from the previous spot business concluded in January.

Reliance Industries was heard to have lowered its domestic sulphur prices by an equivalent of around $10/tonne for north India, and by around $20/tonne for the southern region, market sources said.

($1 = €0.76 / $1 = CNY6.31)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Natalie Hui

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