Tampa:
Firmer international market values, combined with ongoing supply tightness stemming both from the COVID-19 pandemic and February arctic temperatures that knocked a host of Texas refineries offline, were universally expected to push second-quarter Tampa molten sulfur contracts above Q1 levels.
Sources predicted a $80-$90/lt increase over the current $96/lt CFR contract, although most are predicting values to settle closer to $90/lt above current levels, and possibly higher.
U.S. refinery utilization lifted for the week, according to the Energy Information Administration (EIA). Refiners operated at 83.9 percent of capacity for the week ending March 26, a 2.6-point increase from 81.6 percent one week earlier. The rate also pushed ahead of the year-ago 82.3 percent – the U.S. refining industry’s first year-over-year increase since the week ending March 20, 2020 – while trailing the five-year average of 86.8 percent.
Daily crude inputs were reported at an average 14.389 million barrels/d for the week, rising 956,000 barrels/d from 13.433 million barrels/d in the prior report.
U.S. Gulf:
Price ideas on the U.S. Gulf sulfur market were noted rising to $180/mt FOB, up from the week-ago $175-$180/mt FOB.
A 10,000 mt sale to a trader reported at $205/mt FOB was seen by most sources as an outlier due to a number of factors, including the transaction’s low volume, its deviation from known potential netbacks, the release of the material as late as May, the opacity regarding the tons’ ultimate destination, and other considerations. For these reasons, the price was not included in the week’s range.
Brazil:
Last-done at Brazil continued to be noted at $216/mt CFR, sources said, unmoved from the prior report.
Vancouver:
Softening at China was noted dragging last-done Vancouver exports to the $170-$180/mt FOB range, down from $175-$183/mt FOB at last report.
Alberta:
Falling Vancouver values chiseled Alberta netbacks to (-)$31-$110/mt FOB, sources said, down from (-)$31-$113/mt FOB in the prior report.
West Coast:
West Coast prills dipped to the $170-$180/mt FOB range, down from $175-$183/mt FOB at last report. Second-quarter molten contracts priced at $70-$77/lt FOB in the first quarter were likely to rise precipitously in Q2, with sources expecting an approximate $80/mt increase compared to Q1.
China:
Independent “teapot” refiners at China were reported lifting run rates in February, according to Platts, driven by healthy margins and rebounding demand following the country’s Feb. 12 Lunar New Year holiday.
The 79.3 percent rate for February was up five points from January’s 74.3 percent. Rates were also up from the year-ago 43.8 percent historic low, which were the result of widespread refinery cutbacks in China due to the coronavirus pandemic.
Spot sulfur pricing at China was heard softening to a low of roughly $180/mt CFR, falling from the week-ago $190/mt CFR floor. Sources reported a widening price disparity dependent on delivery location, with tons destined for the south of the country continuing to draw values at the week-ago $190-$200/mt CFR level. Material delivered to the river region was heard at a $10-$20/mt discount, leaving the market in a wide $180-$200/mt CFR range.