Tampa: Weather-related issues continued to plague the sulfur market, with transit difficulties and mechanical troubles the most prevalent.
Railcar deliveries extended already significant delays to up to 200 percent of normal delivery windows. On the supply side, a Syncrude refinery outage has gone unresolved for nearly the entire first quarter. Production was originally scheduled to resume around Feb. 14, but the facility remained closed as of last week, with mechanical complications rumored to be the cause. Despite the loss of an estimated 1,000 mt of sulfur produced per day on average by the refinery, sources said the market has not been substantially affected.
EPA announced new Tier 3 regulations of sulfur in gasoline beginning in 2017, mandating the reduction of sulfur levels to a third of previous totals. Despite speculation that Tier 3 could lead to an increase in sulfur hitting the market, sources didn’t see the change affecting volume in any considerable way. “We’re talking about a small move from 30 ppm to 10 ppm,” one source said.
A bigger concern may be the cost to refineries, thought to be sizable given the level of sophistication required to remove such a high degree of sulfur. U.S. refineries are currently profitable and should be able to absorb the costs now, sources said, but the expenditures necessary to effect the switch could be more difficult to bear should sulfur market conditions deteriorate at some point in the future.
U.S. refinery outputs fell slightly for the week ending Feb. 28, according to the U.S. Energy Information Administration. Operating rates dropped to 87.4 percent from 88.0 percent the week before, a 0.6 percent decrease. The rate was ahead of the 82.2 percent reported in the same week of 2013, and was significantly higher than the five-year average of 83.4 percent.
The price of molten sulfur delivered to Tampa was $110/lt for the first quarter.
U.S. Gulf: Gulf prill, long stagnant at sub-market prices due to a dearth of trading activity, rose to an estimated $150-$160/mt FOB based on current domestic and international market conditions.
Vancouver: Spot prices in the Vancouver sulfur market were unchanged last week, quoted in a range of $160-$180/mt FOB. Sources speculated the international market – a driving force behind price increases in the North American market – may have hit a price ceiling, though snug supply could keep levels from dropping off substantially until the market finds broader price agreement.
The price of sulfur from Alberta was unchanged in a range of (-)30-(+)37/mt.
West Coast: The price of West Coast sulfur remained in a range of $150-$165/mt FOB.
Benelux: The first-quarter Benelux price was $130-$144/mt.
ADNOC: The ADNOC price for March rose to $200/mt FOB, up $20/mt from the previous $180/mt FOB.