International sulphur prices ease following Saudi price reduction

Julia Meehan

15-Aug-2014

SulphurLONDON (ICIS)–International sulphur pricing sentiment has started to show signs of easing following an announcement by Saudi Aramco Trading to reduce its September price by $11/tonne, sources said on Friday.

In relation to its decision to reduce its September price, Saudi Aramco said: “We saw the situation in China – this was really the reason since all the end-users there were not willing to pay $190/tonne CFR (cost and freight).

“So we decided to ease up a little bit but not enough to hurt the market. Demand is still standing still, but we are hoping India and China will start to pick up.”

The price decision by Saudi Aramco Trading was welcomed by market followers, describing the move as “representative” and “responsible”.

Middle East prices have been firming since early May, moving from an average of $137/tonne FOB (free on board) Middle East to $171/tonne FOB by early August.

Buyers in major importing region China have shown some strong resistance towards the price increases, preferring to draw on stocks rather than make new sulphur purchases and this in turn has created renewed downward price pressure.

In India, sulphur prices were also softer, but owing to a lack of buying interest sources said it was difficult to pin point a valid price range.

“India is covered and there is not much going on. The range is $190-195/tonne CFR because there are no new deals,” said an Asia based trader.

In the US, price ideas were also softer since the market focuses much on international price developments.

The only region that appeared stable this week was Europe, but this business there largely contract based, with only a small percent agreed on a spot basis.

There was an assumption from a trader that there was some length in the European sulphur market because it was finding it difficult to place volumes.

“I have done a few spot deals, but I think September is looking long in the ARA (Amsterdam-Rotterdam-Antwerp) because tank space is full and there really isn’t much spot demand. There are no spot deals being done above contract,” the trader said.

The third-quarter contract price in Europe settled in a $159-170/tonne delivered Benelux.

Meanwhile, downstream phosphate demand was starting to slow in Tampa in the US and Brazil, however demand in China for the domestic market was starting to emerge.

“We are expecting phosphate demand to start improving in China and I expected sulphur prices will start to firm again on October,” said a Middle East sulphur producer.

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