Price Caution in Sulphur Market

Prices have been up in the sulphur market for some months now, but this is the first time in many weeks where I sense sentiment is turning more cautious. I want to share with you what I said in our 𝘉𝘳𝘪𝘦𝘧𝘪𝘯𝘨: 𝘚𝘶𝘭𝘱𝘩𝘶𝘳.

As price levels inch closer to the last historical highs, there are continued worries over demand destruction. This comes on the back of Tampa molten sulphur settling at $495.69/lt DEL for 1Q, which is the highest quarterly Tampa settlement since 3Q08 at $617/lt DEL. 

Market players are watching closely for any sign of market weakness and monitoring all offers. With the latest buying across China, Indonesia and Jordan, there are some concerns over spot needs in the coming weeks. Lunar New Year holidays start in mid February, while Indian fertilizer plants will start taking their annual turnarounds from March. Buying from Indonesia for 1Q is also largely done, though more could go to a few fertilizers and nickel producers. Brazil’s needs are slow, with Mosaic pausing some fertilizer production due to high sulphur costs.

We are fully aware of demand destruction in the chemicals sector, notably in Europe. Another one bites the dust this week with a Chinese titanium dioxide (TiO₂) plant to be shut permanently. Tronox announced earlier this week its plan to permanently shut its sulphur‑consuming plant that makes 46,000 t/yr of TiO₂ in Fuzhou, China, citing weak domestic demand and increasing costs of sulphur as the key reasons behind the decision. Some positive news in Europe, however, includes DOMO being ordered by the German authorities to continue operating its Leuna facilities at reduced levels for now, and BASF lifting its force majeure at the Antwerp site in Belgium earlier in the week.

The supply situation is largely unchanged. There is no Qatari spot tender this month, and Jubail in Saudi Arabia still has production issues, which resulted in two Red Sea cargoes heading to China. There are still no exports from Russia, and many are closely watching the situation in Iran, particularly as one January loader due to load in Iran for China is still pending.

There is a change in Kazakhstan, however, as Tengizchevroil (TCO) has confirmed the resumption of initial crude oil production after the safe commencement of the site power distribution system.