International sulphur spot price tick-up continues

LONDON (ICIS)–International sulphur spot prices continued to move up this week on the back of increased exports from the Middle East, healthy demand and balanced-to-tight availability, sources confirmed on Friday.

“We are going to see $200/tonne CFR (cost and freight) China very soon. Phosphate producers claim to be very comfortable but they keep buying from inventories and local traders keep replenishing,” said an international trader.

Sulphur prices in major exporting region the Middle East are valued at $166-170/tonne FOB (free on board) Middle East, while spot prices in major importing region China are currently around $160-185/tonne CFR.

Despite the recent price gains in the spot market, there remains an air of caution among some market participants towards the pace of the upward momentum, suggesting that $200/tonne CFR will be a ceiling, particularly in China.

Indeed, some buyers in China were already seen to be retreating to the sidelines, adopting a wait-and-see approach.

“The increases in China are because of speculators. Producers [of fertilizers] will not pay these higher prices,” said an Asian source.

“End-users are already moving to the sidelines this week,” the source added.

Elsewhere in the world, sulphur spot prices were firmer and outside long-term contract agreements, the international sulphur market does not appear to be awash with material.

“There is enough sulphur to go around, but I would not described the market as long, in fact I would say it’s quite tight,” said another trader selling largely to the Asian markets.

On a contractual basis, discussions were underway for major benchmark contract settlers in North Africa, Tampa and Brazil.

A seller involved in the contract negotiation process with North Africa said that discussions had started, but were slow.

“We have started negotiations and of course they want it lower, but it’s not so easy with Ramadan. The negotiation is very slow, but I hope we are close to coming to an agreement. We are in no hurry to settle because the market is growing,” the supplier said.

In Brazil, third-quarter contract price negotiations continue and the mid-$170s/tonne CFR is currently under discussion.

A seller, supplying Brazil with contract volumes, said it too was progressing with its third-quarter contract negotiations.

“We are progressing on quarter-three negotiations: we are around the mid-$170s/tonne CFR,” the seller confirmed.

The US Tampa contract price is also in the negotiation phase. Some sources believe that the contract price will be agreed sooner rather than later, while others think it might not be until the end of July.

Meanwhile in Europe, contract price negotiations are drawing to a close for the majority of buyers and sellers in Europe, with rollovers confirmed in most instances.

The second-quarter liquid sulphur contract price was agreed at $159-170/tonne delivered Benelux.