Tampa: Sulfur market players continued to describe a soft domestic market. Observers were generally bearish on the market’s short-term prospects, expecting weakness both in March and extending into the second quarter.
Looking for good news, sources pointed to signals that refiners had begun substantially cutting back production in response to tumbling crack spreads.
Flush supply was widely cited as one factor in the Tampa market’s first-quarter price decline. Burdened with more supply than interest, some suppliers were said to “overship” customers – sending buyers more product than ordered – in order to unload excess material.
The extra supply was largely attributed to a year of tremendous profit margins in the refining sector. The large margins incentivized producers to run at nearly historic capacity for much of 2015, but falling crude prices have cut margins to their lowest point in over a year, sources said.
The first-quarter contract price of molten sulfur delivered to Tampa was $95/lt, $15/lt below the fourth-quarter price of $110/lt.
Refinery utilization grew for the week ending Feb. 12, according to data from the U.S. Energy Information Administration (EIA). Capacity rose to 88.3 percent for the week, an increase of 2.2 percent from the week-ago 86.1 percent. The numbers represented the first weekly refining capacity increase of 2016.
Despite the climb, current-week capacity was lower than the 88.7 percent logged during the same week in 2015, but beat the 86.3 percent five-year average.
Average daily crude inputs were also higher for the week. The EIA clocked inputs at 15.848 million barrels/d, a 338,000 barrel/d increase from 15.510 million barrels/d at last check.
U.S. Gulf: Based on recent transactions into Brazil, price ideas for prilled sulfur offered from the U.S. Gulf were quoted around $85/mt FOB, unchanged from the week before.
Vancouver: Vancouver sulfur players described no change in spot, calling the market $80-$90/mt FOB for the week. Rumored offers in the mid-$70s/mt went unconfirmed.
Vancouver contracts continued to run even with spot.
Low-end pricing from Western Canada could be traced to the Chinese spot market, where last-done transactions were described in the $90-$95/mt CFR range.
Alberta producer netbacks were called (-)$27-$60/mt FOB, unmoved from the previous report.
West Coast: Holding pace with Vancouver, the West Coast solid sulfur market was flat at $75-$85/mt FOB.
Molten sulfur contracts fell in a range of $65-$115/lt FOB for the first quarter.
ADNOC: The Abu Dhabi National Oil Co. listed its February price of formed sulfur as $105/mt FOB Ruwais, $17/mt below $122/mt FOB announced for January.
Aramco: March-loading Saudi Aramco cargoes were priced at $90/mt Jubail, sources said. The March price represented a decrease of $25/mt from $115/mt in February.
Tasweeq: Sulfur produced in Qatar was offered at $89/mt Ras Laffan for February, $30/mt below the January level of $119/mt.