China sulphur inventories down 0.89m tonnes year on year

21 February 2014 11:51 Source:ICIS News

LONDON (ICIS)--Chinese formed sulphur inventory levels are currently down by almost 1m tonnes year on year and prices remain high as a result, according to market sources on Friday.

Sulphur inventories at the nine major domestic ports hit a three-year record high of 2.14m tonnes in February 2013, because many traders focused too much on the Chinese market. This in turn created an oversupply which pushed prices down to a 2013 low of $78-85/tonne CFR (cost and freight).

Chinese Formed Sulphur Inventory Levels
(’000 tonnes)


20 February

13 February

Fangcheng port

400

330

Zhanjiang port

40

60

Beihai port

33

34

Zhenjiang

190

190

Nantong port

340

360

Qingdao port

230

250

Rizhao port

0

0

Longkou port

12

10

Tianjin port

2

2

Total

1,247

1,236

However, spot sulphur prices in China have been firming since September 2013 because of cuts in production from the Middle East, which is a major exporter of sulphur to the region. A drop in domestic inventory levels has invariably contributed to the price rises seen in the spot market in recent months.

In relation to the recent spot price development in China, an international trader said: “Chinese buyers are covered up to March - they went out flat before the Lunar New Year holiday. If they [Chinese buyers]need more sulphur, they will find a high price.”

Another source active in China quoted spot levels at $200-210/tonne CFR China.

“There are some high offers in the market, but above $210/tonne CFR is not achievable at the moment and end users are still rejecting offers above $200/tonne CFR. I think $200-210/tonne CFR is a reasonable price range at the moment,” the source said.

Sulphur spot prices in China are now at their highest level since September 2012. ICIS assessments were stable this week at $185-215/tonne CFR, although offers were seen as high at $220-230/tonne CFR.

Sulphur is an involuntary by-product recovered from oil and gas production. Ninety per cent of sulphur is used for the production of sulphuric acid, of which close to 60% is used to make phosphate fertilizers.

Belle Zhang contributed to this article

By Julia Meehan