Global sulphur market seeks direction ahead of Q3 settlement

LONDON (ICIS)–The global sulphur market was largely in wait-and-see mode, as various tenders were being agreed during the week and Q3 negotiations kicked off.

Much of the focus was on the outcome of Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat’s) latest spot tender, which closed this week. While details of the award are unclear, offers were heard in the low-60s/tonne FOB, higher than the $57/tonne FOB Muntajat announced at the start of the month for the June Qatar Sulphur Price (QSP).

Another major producer in the region, Abu Dhabi National Oil Company (Adnoc), has started negotiations with its contract partners for Q3 tonnes, the outcome of which will further indicate pricing direction.

In China, import activity was limited, as market players waited to ascertain pricing for Middle East tonnes. Also, inventories at ports increased by 170,000 tonnes during the week to 2.9m tonnes, indicating possibly limited demand in the short term.

Talk of business concluded at $80-81/tonne CFR was not broadly confirmed in the market.

“I am somewhat skeptical about $80-81/tonne. Discussions in the $78-$79/tonne range are expected to conclude soon,” a trader said.

Spot prices were also stable in the domestic market, at CNY 665/tonne EXW (ex-works) at ports along the Yangtze River. Downstream phosphate plants maintained run rates of around 70%.

Sinopec Puguang Gasfield kept its prices flat at CNY590/tonne EXW for truck deliveries and at CNY690/tonne at Wanzhou port.

In Taiwan, Formosa Petrochemical Corporation (FPCC) is said to have awarded its latest tender in the low-$70s/tonne FOB, destined to China.

In India, it is understood negotiations are ongoing for PPL’s 9 June purchase tender for 35,000 tonnes (+/-10%) of bright yellow crude granular sulphur for arrival at Paradeep on 10-15 July. The outcome of the tender will indicate pricing sentiment in the Indian import market.

In Canada, pricing is heard slightly softer this week, with little new activity seen.

Inventories have improved since the extremely tight period earlier in the quarter.

Demand from China is likely to remain muted as port inventories in the region move higher.

In the US, the market remains very quiet as low inventories keep export cargoes from being feasible. Production has improved after the very low levels seen in April and May.

The European market is said to be balanced, amid continued tight supply and stable-to-weak demand, because of the impact of coronavirus on end-use sectors such as caprolactam (capro).

Market players await the outcome of Q3 settlements.

Sulphur is a co-product of oil and gas production. It is the primary source in the production of sulphuric acid, which is used to manufacture fertilizers (primarily phosphates) and caprolactam.

Focus article by Erica Sesay

Additional reporting: Rita Wang, Annalise Porter