LONDON (ICIS)--Abu Dhabi National Oil Company (ADNOC) has set its official selling price (OSP) for September shipments to the Indian market at $155/tonne FOB (free on board) Ruwais, a company source confirmed on Monday.
In relation to the $20/tonne price reduction from August to September, an ADNOC source said: “The September price is indicative of recent tenders and direct communications from buyers.”
Despite a slowdown in demand in August for sulphur in both China and India, ADNOC expects the recent price initiatives by Middle East producers to bring down the value of sulphur, boosting demand.
“Especially in India, the sulphur price was not attractive and PPL (Paradeep Phosphates Limited) and IFFCO (India Farmers Fertiliser Cooperative Limited) were out of the market saying they were covered.
“I think India can now absorb more sulphur at this price level and we will see buyers coming back to the market,” the ADNOC source added.
ADNOC’s price announcement comes hot on the heels of major Middle East producer Tasweeq publishing its September price at $151/tonne FOB, down by $18/tonne from August.
Despite ADNOC’s OSP for September, a trader serving the sulphur market in Asia doubted that $155/tonne FOB would generate a surge in demand.
“With $155/tonne plus $17-18/tonne freight to China, that’s $172/tonne CFR (cost and freight). Allocation of $5/tonne will be given to holders which equals $167/tonne CFR.
“With the current China sulphur market at $163-165/tonne CFR it will be impossible for traders to make a profit,” the trader said.