International sulphur market keen to gain fresh direction

23 May 2014 15:51 Source:ICIS News

Focus article by Julia Meehan

LONDON (ICIS)--The international sulphur market, while remaining in somewhat of a wait-and-see mode ahead of the IFA (International Fertilizer Industry Association) Annual Conference in Sydney, Australia, appears to be picking up in terms of tenders, new enquiries and price ideas, sources said on Friday.

Invariably the market situation in China remains a key focus as does price developments and availability out of the Middle East.

“China looks like it’s still holding back [from purchasing] but they will need to buy soon and I am hearing higher prices,” said one international trader.

“The market is definitely feeling better and there doesn’t seem to be so much sulphur around, but I wouldn’t say its short.

“But I try to get some spot from the Middle East but they [Middle East producers] could not supply,” said a second trader.

Steady demand in China and relatively balanced supply from the Middle East has kept these key sulphur markets rather motionless in terms of direction. However, the majority of sources are expecting demand to start improving in China and stocks in the Middle East start depleting as a result.

While China experienced another rather non-eventful week in terms of market direction, buying interest continued to emerge from India, which in turn lifted price ideas and market sentiment there. This was not however widespread, with some sources suggesting that India was now more focused on its phosphate demand rather than its sulphur needs.

“India like FACT will come back to the market but it will all be DAP [diammonium phosphate] demand and not sulphur,” said a sulphur trader selling to the Asian market.

FACT remains in the market with a tender which was reissued owing to offers being too high. FACT said that it hoped to secure 15,000-25,00 tonnes of sulphur at below $165/tonne CFR (cost and freight) Cochin, which was the price it paid for its previous tender.

Sellers said they were not prepared to drop their prices since the market was moving in the opposite direction.

Market participants have been eagerly awaiting news of Tasweeq’s sulphur tender for 30,000 tonnes of sulphur for June loading. The tender closed on 20 May, with bids asked to remain valid until 22 May.

It was reported the tender had been awarded at $153/tonne FOB (free on board), but many sources dismissed this number as too high. Indeed, Tasweeq said that it expected it to be awarded in the $130s/tonne following its May Qatar Sulphur Price (QSP) at $133/tonne FOB.

“$153/tonne sounds high but you never know in this market,” said an Asia based trader.

Other tenders featuring the in Middle East include Jordan’s JPMC and Iran’s IPCC.

In other major exporting region Canada, availability was expected to improve on the resumption of Syncrude being able to restart its sulphur loading. However, due to a power failure over the weekend this has now been delayed.

In the US, Mosaic confirmed its board of directors has approved the construction of a 1m long ton/year sulphur remelter on 15 May. Construction will begin immediately and the anticipated completion of the project is July 2015.

North African phosphate producers OCP and GCT were said to be running their respective operations at 70%. OCP was reported to have covered its sulphuric acid and sulphur demand for the second quarter.

In South Africa, Foskor said it was fully covered with sulphur and would have no requirements until August.

“We are fully cover and will not be back in the market until August. We have plenty of sulphur,” said a Foskor source.

In Europe, the market was a little mixed in relation to its balance. Buyers said there was no shortage of sulphur availability, while others felt that there were some pockets of tightness, particularly in the south.

Contract negotiations for the third quarter are expected to get underway in mid-June.

“I feel the liquid market is a little tight. For contracts, I will not start my discussions until June. It’s too soon to say about the market,” said a large sulphur buyer.

By Julia Meehan