US January sulphur production, shipments rise year on year

14 March 2014 16:31 Source:ICIS News

HOUSTON (ICIS)--The US produced 763,000 tonnes of sulphur via oil and gas processing in January, according to preliminary numbers provided by the US Geological Survey on Friday.

Total production is up from 700,000 tonnes in January 2013. Shipments also rose in January to 792,000 tonnes in 2014 from 703,000 tonnes in 2013.

Sulphur production from petroleum totalled 675,000 tonnes and production from natural gas was 89,000 tonnes.

Sulphur stocks were 134,000 tonnes at the end of January, down from 161,000 tonnes at the end of December 2013.

Production and shipment were down month-on-month, as sulphur production in December was 806,000 tonnes and shipments totalled 795,000 tonnes.

Total production from 2013 was 8.7m tonnes, up from 8.4m tonnes in 2012.

The US sulphur market is well supplied, but spot prices have risen to the $145-150/tonne FOB (free on board) range in the US Gulf due to prices increasing in the international market. However, the second quarter sulphur settlement is not expected to rise to that level due to changing dynamics.

Tampa sulphur contracts settled at $110/long ton DEL (delivered) and an increase has been expected due to the discrepancy between spot in the US Gulf and the first quarter settlement, due to a tightening international market.

However, the international sulphur market is plateauing after rising since September 2013 due to a lack of availability in the Middle East. Prices in key market China have fallen the last two weeks and inventories are heard up, and producer Saudi Aramco set their April sulphur price down $10/tonne.

Where the second quarter settlement will end up is uncertain due to the plateau, as a large increase had been expected.

Sulphur is an involuntary by-product recovered from oil and gas production. 90% of sulphur is used for the production of sulphuric acid, of which close to 60% is used to make phosphate fertilizers.

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By David Tonyan