Europe Q4 sulphur price pressured by global losses

LONDON (ICIS)–European fourth-quarter contract discussions are underway and prices are under pressure because of international losses, sources confirmed on Thursday.

A major sulphur buyer for the production of caprolactam (capro) said: “I have spoken to some downstream users and reductions of $25/tonne are being talked about.

“I spoke to a producer and it opened negotiations at [a reduction of] $10-15/tonne. I would not be surprised if we see prices coming down by $25/tonne. We have not seen the floor yet.”

The European third-quarter liquid sulphur contract price rolled over at $154-165/tonne delivered Benelux on the back of balanced market fundamentals. 

Another capro producer was not sounding as ambitious about the extent of its sulphur price reduction moving from the third to fourth quarter.

“We have not finalised anything yet, but the [downward] tendency sounds familiar. I would be delighted to get a reduction of $25/tonne.

“There has been a big change [in prices] especially in Asia. Our Chinese capro competitors are getting an advantage. I’ve talked to my suppliers and maybe we will settle at the end of next week down by $15/tonne.”

Meanwhile, on the selling side, a producer said it had made no progress and had yet to enter into serious discussions with its customers.

“Today there have been no developments. I have not started our discussions, but we had one meeting with one of the biggest sulphur buyers in Europe and negotiations will be difficult for sure,” the producer said.

While the European sulphur market acts independently to other regions, because it is liquid rather than solid based, the sharp prices falls in major consuming countries, such as, China, Brazil and North Africa, cannot be ignored.

A European sulphur trader who plays an active part in contract negotiations said: “We were expecting Europe to be slightly lower – meaning $10/tonne because of the weakness.

“There is no justification for $25/tonne. The lower prices offered by sellers will be more in sympathy.”