International sulphur prices look set to bottom out – traders

Julia Meehan

05-Sep-2014

SulphurLONDON (ICIS)–International sulphur prices may have bottomed out following a month of downward price erosion, particularly in the key China market, traders said on Friday.

“I don’t think prices have further to go in China. Everybody is watching the international market and all that the Middle East producers have done is brought their export prices to more realistic levels,” said a trader.

Major Middle East producers Tasweeq and ADNOC adjusted their September prices down by $18-20/tonne respectively, which was welcomed by the market since many sources believed that such a price move would bring Chinese buyers back.

China spot prices are currently valued at $160-175/tonne CFR (cost and freight), while in the Middle East the range is set at $151-159/tonne FOB (free on board).

“The Middle East move is good for the market. It means that FOB [Middle East] and CFR [China] are now in line when taking freight into account,” said a second trader.

Commenting on current price developments, a domestic China source said: “The spot market is fluctuating now and I don’t know if the price has really bottomed out.

“In the next three days, it will be the mid-autumn festival so holidays in China. So the market will be more clear when the Chinese come back to work. The price is not high now so it maybe possible that the price will soon bottom out.”

Not only were the Middle East producers price intentions expected to stimulate demand in China, India too was expect to come back to the market.

“Especially in India a sulphur price above $170/tonne CFR India was not so attractive and buyers have stayed out of the market. They keep saying that they are covered – this is the reaction I get from them.

“But they will come back to the market and I think India can absorb more sulphur,” said a producer serving the Indian market.

The producer believe the market to be “fundamentally healthy” and expected to see prices in the fourth quarter at $155-165/tonne FOB Middle East.

Indeed, one international trader firmly believed that fundamentally the sulphur market remained in good shape.

“The market is bottoming out. The prices went down and now we are starting to get more and more demand and unable to cover it all. These are usually the first signs of the market bottoming out,” the international trader said.

“We’ve not been very active on purpose because we feel the market is getting better and if China does come back we could see price moving up,” the trader concluded.

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?