Middle East sulphur price increases boost international sentiment

Focus article by Julia Meehan

LONDON (ICIS)–Middle East sulphur price increases by ADNOC and Tasweeq for December have boosted spot prices in major importing region China and subsequently lifted market sentiment, sources said on Friday.

Qatar International Petroleum Marketing Company Ltd (Tasweeq) increased its December price by $27/tonne to $146/tonne (free on board) Ras Laffen, while Abu Dhabi National Oil Company (ADNOC) set its official selling price (OSP) for December sulphur shipments to the Indian market at $150/tonne FOB Ruwais, up $15/tonne on November.

“We have seen prices increase in China but this is not driven by supply. Very few deals have taken place,” commented a trader.

Indeed, it would seem that the higher prices in China have created a bit of a standoff between buyers and sellers, as Chinese buyers expressed their reluctance towards the higher prices bandied around the market.

In addition to the higher monthly prices posted by ADNOC and Tasweeq, import cargoes arriving at the major Chinese ports continue to lessen resulting in the lowest inventory levels calculated at the major ports since May 2014.

In relation to the higher prices heard in the market week on week, a second sulphur trader selling Middle East sulphur to locations in Asia said: “Middle East producers don’t have much cargo. They never do this time of year because Russian supply will stop.

“I think it’s a period of good demand. China will be looking for cargo this month and next month. Things will definitely pick up ahead of the Lunar New Year holiday,” it added.

Higher prices were also heard in India, with the Paradeep Phosphates Limited (PPL) tender for second-half December delivery to Paradeep attracting offers in a $170-175/tonne CFR price range, However, many sources thought that the offers were too high.

FACT also reissued a purchase tender for 15,000-25,000 tonnes of sulphur for early January arrival.

The majority of business is closed now for the remainder of 2014 and much of the focus is on first-quarter contracts.

In Russia, river navigation and high winds continued to hamper deliveries.

“We have had logistical problems since September because of the terrible storms this year. It is still one day of loading at the port and two days of waiting. We have a couple of vessel left on the river before navigation closes,” said a major supplier of Russian sulphur.

In Europe, first-quarter sulphur contract price ideas have yet to be aired and sources are not expecting to close contracts until the first week of January.

“We will be able to confirm our prices for next year in the final days of December,” said a major sulphur supplier to Europe.

In Latin America, Vale is now looking to secure its annual volumes for Brazil and also for its nickel operation in the French territory in the Pacific of New Caledonia.

AFT/Fertinal is also looking to secure a 55,000-tonne cargo for January delivery for its fertilizer operations in Mexico.