LONDON (ICIS)--Abu Dhabi National Oil Company (ADNOC) is understood to have announced its January Official Selling Price (OSP) to the Indian market at $155/tonne FOB (free on board) - a drop of 21% (or $40/tonne), according to sources on Wednesday.
This follows a similar drop in the January Qatar Selling Price (QSP) announced by Muntajat last week, and reflects falling spot prices in China and India in recent weeks.
The drop in the January OSP mirrors falls in China spot prices in recent weeks, and comes despite tight sulphur supply across the Middle East.
Increases in Middle East monthly posted prices during the second half of the year were predominantly driven by a combination of low availability and strong demand from China.
China saw high consumption throughout the second half of 2017, but particularly from October to late November, which caused prices to jump significantly.
The strong demand was partially linked to downstream players moving some 2018 production forward to avoid a new environmental tax, which comes in to effect on 1 January, and in part due to restocking ahead of the Lunar New Year.
Demand fell back once lead times meant that purchases would not arrive in time for these two purposes.
Last week, ADNOC and OCP announced a unique granulated sulphur supply deal up to 2025.
ADNOC exported more than 2m tonnes of granulated sulphur to Morocco in 2016, from its annual output of more than 6m tonnes, and under this agreement will consider a gradual increase in contracted annual volumes.
Its sulphur production will increase as sour gas projects are brought on-line, part of plans to achieve gas self-sufficiency by 2030, it said.