Global sulphur prices weaken further on high stocks, weak demand

LONDON (ICIS)–Global sulphur prices weakened further this week as China’s inventories climbed higher and the end use phosphate market weakened.

China’s sulphur port inventories were at 2.09m tonnes in the week ended 18 July, up by 67,000 tonnes from the previous week, ICIS data showed, a six-year high.

Inventory at Zhenjiang port reached 1.2m tonnes; the port has a capacity of 1.5m tonnes.

An international trader concluded a spot sale for 35,000 tonnes to Sinochem Fertilizer at $102/tonne CFR (cost and freight) China, according to sources, with shipment for August.

Prices at ports along the Yangtze River remained stable at Chinese yuan (CNY) 840/tonne ($102/tonne).

The market is expected to soften further, as domestic demand is still in a lull season, affecting prices for the rest of July.

The overall run rates in China’s phosphates sector are at around 55% for diammonium phosphate (DAP) and 50% for monoammonium phosphate (MAP), as the main domestic 6+2 phosphates producers cut production rates, following the recent drop in export prices.

Sentiment dampened further among Middle East exporters as Chinese import prices dropped, and freight rates increased on geopolitical issues.

A deal was concluded in the low-mid $70s/tonne FOB (free on board) in the Arab Gulf.

China import and Middle East export prices have both reached two-year lows.

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In India, demand from the end-use phosphate fertilizers market remains limited on the back of ample stocks.

Phosphate producer IFFCO has reduced the retail prices of non-urea nutrients such as DAP and nitrogen, phosphorous, potassium (NPK) complexes by 6-8%, sources said.

Coromandel has issued a purchase tender for 20,000 tonnes of sulphur; the tender closes on 19 July.

The market is looking to the outcome of the tender to assess if Indian prices will begin to track the global downtrend.

The northwest Europe (NWE) market is quiet since sulphur third-quarter (Q3) contracts were settled at a rollover, despite weakening global prices.

In Canada, no new business was confirmed concluded out of Vancouver.

The price range widened on a combination of a lower China netback and an absence of new activity, as buyers and sellers remain far apart in price discussions.

US refineries continue to run hard and, combined with the Beaumont shiploader outage, will lead to a buildup in inventories.

No new deals were done in the US Gulf and the range is steady this week. Discussions are ongoing in California for August cargoes.

In Brazil, there remains a wide gap between buyers and sellers regarding price.

There were multiple new offers into the country, with some discussions around $95/tonne CFR.

A deal was being negotiated just below $100/tonne CFR, sources said.

($1= CNY6.88)

Pictured: A sulphur storage terminal in China; archive image
Source: Sipa Asia/Shutterstock

Focus article by Erica Sesay

Additional reporting by Rita Wang and Annalise Porter