Tampa: Negotiations for the first-quarter contract price of molten sulfur delivered to Tampa kicked off last week. Expectations for the contract varied, but most speculated that a $5-$10/lt increase from the fourth quarter’s $69.55/lt DEL was likely.
Those calling for a larger increase pointed to sizeable upticks in international market pricing since the start of the fourth quarter, including Chinese import prices firming to the tune of $10-$15/mt CFR.
Weaker January offers from two Middle Eastern suppliers may have dinged that argument, some believed, as producers in that region appeared to disagree on the market’s direction.
Some also questioned the domestic fundamentals landscape. “If anything, we have lots of sulfur floating around,” said one market player. “The U.S. market appears a little oversupplied at present.”
Unplanned boiler repairs at the 335,000 barrel/d Philadelphia Energy Solutions refinery forced a 90,000 barrel/d fluid catalytic cracking unit to reduce production last week, Reuters reported. The full extent of the curtailment was not immediately known. Repairs to the damaged unit were expected to take “a while.”
Refinery utilization was higher last week, according to the U.S. Energy Information Administration (EIA). Refining capacity swelled to 92.0 percent for the week ending Dec. 30, a 1.0 percent increase from the prior week’s 91.0 percent, but trailing both the year-ago 92.6 percent and the 92.4 percent five-year average.
Average daily crude inputs also rose, notching 16.689 million barrels/d, an increase of 132,000 barrels/d from 16.557 million barrels/d recorded on Dec. 23.
U.S. Gulf: Last-done on the Gulf export market remained at $70-$71/mt FOB last week. Sources previously expected pricing to rise by $10/mt FOB or more in the next round of business, but the market’s refusal to budge left many struggling to explain its relative weakness.
“Still confounded as to the reason the Gulf Coast price is so low relative to the rest of the world,” said one source. “(Producers) could be paying extra in freight and still do better (selling) to Asia,” another trader argued.
Vancouver: Sources described limited firming in the Vancouver export market. While most called pricing in the high-$80s/mt FOB, scattered sales were reported in the “low-$90s/mt FOB” for the week, leaving the market in a $87-$92/mt FOB range, up from $85-$89/mt FOB quoted for late December.
Chinese spot imports continued to be called $101-$107/mt CFR, although some observers believed the market was headed lower in the near term. Already weak phosphate production could wane further should international pricing fail to recover, sources argued, making sustained highs in China an uncertainty.
Others disagreed, however, arguing that the apparent willingness of end users to pay full price was a positive sign for the market’s health. “The increased prices are ‘real’ and don’t just appear to be trader speculation, as widely reported,” said one observer.
Alberta sulfur producers reported ongoing (-)$55-$20/mt FOB netbacks, unchanged from fourth-quarter levels. Molten sulfur sold at contract rates into the U.S. comprised the bottom of the range, with solid tons offered from Vancouver netting producers up to $20/mt FOB under “ideal conditions,” said one source.
A planned 50,000 barrel/d Sturgeon refinery currently under construction north of Edmonton, Alba., could eventually triple original production estimates to 150,000 barrels/d, subject to regulatory approval, according to numerous reports. The $8.5 billion facility is on track to begin production in late 2017.
West Coast: The Phillips 66 refinery at Rodeo, Calif., suffered a multi-unit shutdown on Dec. 28, local news outlets reported. The stoppage was triggered by flaring and a steam release from a hydrogen facility located adjacent to the refinery, and resulted in two hydrocracking units going offline. The 140,000 barrel/d refinery was expected to restart the hydrocrackers on Dec. 29-30.
Solid sulfur offered from the West Coast was priced at $80-$85/mt FOB, unchanged from the previous report. Fourth-quarter molten contracts fell in the $50-$75/lt FOB range.
Aramco: Saudi Aramco lowered January pricing to $90/mt FOB Jubail, a $2/mt cut from December’s $92/mt FOB.
ADNOC: The Abu Dhabi National Oil Co. bucked a trend of January price cuts in the Middle East, announcing a $4/mt increase to $92/mt FOB Ruwais. ADNOC’s December offer stood at $88/mt FOB.
Qatar: Qatar state petroleum marketer Tasweeq officially changed its name on Dec. 19, rebranding as Qatar Petroleum for the Sale of Petroleum Products Company Ltd. (QPSPP). The change stems from a merger with parent company Qatar Petroleum in October 2016.
QPSPP announced January loading at $88/mt FOB Ras Laffan, $4/mt below the December price of $92/mt FOB.