International sulphur prices look set to bottom out – traders
Julia Meehan
05-Sep-2014
LONDON
(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.
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