Tampa: Domestic sulfur players described no major changes in the North American market heading into the second quarter.
Settlement talks for the contract price of molten sulfur delivered to Tampa are expected to begin soon – “probably” next week, sources said – and will kick off against a backdrop of international market weakness and prolonged price erosion.
The first-quarter contract price of $95/lt is universally expected to tumble in the second quarter, with landing spots generally predicted in the $65-$75/lt range.
Middle Eastern producers began sliding into the upper $70s/mt with Tasweeq’s newly-announced April pricing, a shift based on Chinese spot market values quoted in the $80s/mt CFR heading into the second quarter.
Additionally, sources said swelling supply in the U.S. Gulf, a byproduct of rising refining rates and the processing of greater quantities of sour crude, could pressure Tampa further.
Some observers went so far as to characterize Gulf pricing as the ultimate leading indicator for Tampa contracts in 2016. “(Tampa) depends on what happens with the U.S. Gulf export price,” said one contact.
Refinery utilization grew last week, according to the U.S. Energy Information Administration (EIA). Capacity stood at 90.4 percent for the week ending March 25, a 2.0 percent increase from the previous week’s 88.4 percent, and also ahead of the year-ago 89.4 percent and the five-year average of 87.5 percent.
Average daily inputs were markedly higher at 16.234 million barrels/d, a 414,000 barrel/d hike from the previous week’s 15.820 million barrels/d.
U.S. Gulf: Market watchers continued to report Brazilian bids in the $70s/mt CFR last week, but sources believed deals had yet to be struck at those levels. Last-done was called in the $70-$75/mt FOB range, unchanged from last report.
Vancouver: Last-done sales on the Vancouver spot market were unchanged at $75-$85/mt FOB, sellers said. Contract pricing continued to run even with spot.
Alberta producer netbacks were reported flat at (-)$27-$60/mt FOB.
Last-done at China was called in a range of $80-$85/mt CFR.
West Coast: West Coast formed sulfur was unchanged for the week. Sources put price ideas at $70-$80/mt FOB.
California molten contracts fell in the $65-$115/lt FOB range for the first quarter, but a drop in international pricing was expected to push second-quarter values lower. Market watchers speculated that an average $20/lt drop was likely.
ADNOC: The March price of Abu Dhabi National Oil Co. prill was $88/mt FOB Ruwais, $17/mt below February levels of $105/mt. ADNOC had not released updated April pricing as of March 31, but sources expect a downward move for the new month.
Aramco: Saudi Aramco sulfur was offered at $85/mt FOB Jubail for April loading, $5/mt below the March price of $90/mt FOB.
Tasweeq: Qatar state-owned sulfur producer Tasweeq reduced pricing for formed sulfur last week, offering cargoes at $78/mt FOB Ras Laffan for the month of April. The new pricing represents a drop of $9/mt from $87/mt in March.