International sulphur sellers nervous about lack of trade flow

LONDON (ICIS)–International sulphur sellers are starting to get nervous about the lack of demand from key markets such as China and India but also from other locations, sources said on Friday.

“There really is so little buying interest at the moment, particularly in China. In India, there’s hardly any buyers,” a trader said.

Another trader who sells largely to Asia but also monitors buying activity in North Africa and Latin America, said: “Brazil is looking now, and North Africa is taking its regular volumes, but the market to me does not feel very strong. It is quiet.

“Maybe things have slowed because people are turning their focus on Q2 contracts, but we have moved from an illiquid to a very liquid market in a very short space of time. Which is a little worrying.”

Middle East producers have also expressed their concern about the lack of demand from China since the Lunar New year holiday.

In China, prices continue to come under pressure because of a lack of demand, although inventories remain below 1m tonnes.

China-formed sulphur inventory levels have increased week on week, but only by 1.4%.

Sources say downstream producers were fully covered with the stocks they moved to their plants prior to the Lunar New Year holiday in February.

Sulphur prices in China are currently valued at $150-167/tonne CFR (cost and freight) China, down $3-5/tonne from the previous week.

“Now it’s very hard to predict the market situation and make a good analysis,” said a Japanese trader selling sulphur to the Chinese market. “The factories have enough stock until the end of April and phosphate producers are not in a position to secure any cargoes.”

Another trader active in China said: “The [sulphur] market in China is still in a wait-and-see mode. Port inventories are less than 1 million tonnes and companies have enough stock in their factories because they transported a lot of sulphur in February.”

Qatar International Petroleum Marketing Company Ltd (Tasweeq) is expected to announce its April price in the coming days. As yet, no indications have been given, but in light of the downward price pressure in China, sources are expecting Middle East producers to bring down their monthly prices.

Abu Dhabi National Oil Company (ADNOC) will also announce its official selling price (OSP) for March sulphur shipments to the Indian market soon.