Tampa: Sources called the domestic sulfur market quiet for the week, although speculation regarding the first-quarter price of molten sulfur delivered to Tampa continued to gain steam.
Settlement talks were not expected to begin in force until after the New Year, but complex market conditions gave observers plenty to debate as 2015 drew to a close.
Supply both at the domestic and international levels remained an important factor, sources said. Some argued that domestic supply is down headed into the first quarter, thanks to shrinking U.S. refinery runs due to softer crack spreads, along with refinery turnarounds at facilities like Alberta Oil Sands producer Syncrude.
A domestic supply downturn would stand in contrast to worldwide sulfur production, which is forecast to increase by up to 7 percent in 2016, according to industry sources.
On the consumption side, lower ammonia pricing for January has softened the sting of ongoing weakness in the domestic phosphate market, but unsteady farm economics means phosphate “volumes and demand will remain in question,” said one source.
Throw a strong U.S. dollar into the mix, which some argued is likely to translate to softer offshore pricing, and the result is a set of highly divided expectations for the first quarter. Price speculation ranged from a decrease of $5/lt from the fourth-quarter contract of $110/lt to as much as a $10/lt increase.
Domestic refining capacity grew for the week, according to the U.S. Energy Information Administration (EIA). Utilization stood at 92.6 percent for the period ending Dec. 25, an increase of 1.3 percent from the previous week’s 91.3 percent and also ahead of the five-year average of 90.8 percent, but down from the year-ago 94.4 percent.
Average daily crude inputs rose to 16.682 million barrels/d, a 214,000 barrel/d increase from the last reported 16.468 million barrels/d.
U.S. Gulf: Gulf netbacks continued to be reported in the $115-$120/mt FOB range.
Vancouver: Sources described little-to-no movement in the Vancouver sulfur market.
Chinese spot was reportedly quiet ahead of the February Lunar New Year holiday. Last-done in that market was said to fall in the $130-$135/mt CFR range, translating to a $115-$120/mt FOB price at Vancouver.
A turnaround forced Alberta Oil Sands refiner Syncrude into reduced production for the week, sources said. Netbacks to Alberta producers continued to be quoted in the (-)$12-$85/mt FOB range.
West Coast: West Coast prills were unchanged at $110-$115/mt FOB.
Negotiations for the first-quarter price of West Coast molten sulfur were underway last week, sources said. Observers expected little change from fourth-quarter levels of $65-$115/lt FOB.
ADNOC: Abu Dhabi National Oil Co. sulfur for December was quoted at $130/mt FOB Ruwais, a $5/mt increase from November levels of $125/mt FOB.
Aramco: Saudi Aramco sulfur for December loading was offered at $128/mt FOB Jubail, $13/mt FOB higher than the November price of $115/mt FOB.
Tasweeq: Formed sulfur produced in Qatar fell to $119/mt FOB Ras Laffan for the month of January, a $10/mt drop from $129/mt FOB in December.