Tampa:
Speculation regarding upcoming third-quarter negotiations for the contract price of molten sulfur delivered to Tampa remained muted last week, despite the start of Q3 looming less than two weeks away.
Recent firming in a number of international markets ought to portend an increase, some market watchers argued. Others hedged, however, arguing that the Tampa market has grown increasingly independent in recent quarters, and does not always follow traditional indicators.
Some pointed to the Gulf export market – where last-done pricing remains in the lower-mid $70s/mt FOB – as Tampa’s most likely guidepost, speculating that exports may need to show signs of firming before Tampa is pressured higher. Few sources predicted a decline for Q3, however.
Molten sulfur delivered to Tampa was contract-priced at $70/lt DEL in the second quarter, a decline from $75/lt in Q1.
Refinery utilization ticked lower last week, according to U.S. Energy Information Administration (EIA) data. Refiners operated at a near-historic 94.0 percent capacity for the week ending June 16, a 0.4 percentage point increase from the 94.4 percent week-ago rate. Current-week capacity ran ahead of both the year-ago 91.3 percent and 91.6 percent five-year average.
Daily crude inputs were also down, notching an average 17.152 million barrels/d, a reduction of 104,000 barrels/d from 17.256 million barrels/d reported previously.
U.S. Gulf:
Sources continued to express firming expectations for the next round of business, citing ongoing snug supply contrasted against more-or-less steady demand. Lacking in new transactions, the market remained at a last-done $70-$75/mt FOB.
Vancouver:
Traders called recent Vancouver spot business in the $77-$82/mt FOB range, unchanged from one week earlier. Transactions rumored in the mid-$80s/mt FOB could not be confirmed on June 22. Short-term contracts were said to run even with spot.
Netbacks to producers in Alberta continued in a wide range, sources said, a spread established by U.S. molten contract pricing at the low, and prills exported by way of Vancouver on the high end. Netbacks were reported at (-)$55-$15/mt FOB, unchanged from the prior report.
West Coast:
Regulators voted to delay a cap on refinery emissions in California’s San Francisco Bay Area on June 21, followings complaints that affected parties were not given adequate time to review late changes to the measure, the East Bay Times reported. The emissions cap – the first of its kind in the U.S. – is intended to prevent refiners from expanding operations to enable the processing of heavier crude slates, such as those produced in the Oil Sands region of Alberta. The regulators agreed to postpone adoption of the measure by at least two months.
West Coast solid sulfur prices were heard in a $77-$80/mt FOB range, unchanged from one week earlier. Second-quarter molten contracts were quoted at $55-$77/lt FOB.
China:
China is facing the prospect of large-scale refining curtailments in the third quarter, Reuters has reported. In addition to Sinopec considering output cuts for the July-September period (GM June 16, p. 15), a number of additional producers have announced plans to reduce capacity. The cuts could total roughly 10 percent of the country’s 15.1 barrels/d, and will include announced curtailments from a number of major refiners, as well as scheduled turnarounds totaling approximately 1.3 million barrels/d.
Sulfur imported to China was reported at $99-$102/mt CFR for the week, unchanged from the previous report.