Tampa:
Tampa molten sulfur values took a big step up during the week, with the market’s largest consumers and suppliers agreeing to a second-quarter contract price of $481/lt CFR, a 71 percent increase on the first-quarter $282/lt CFR contract.
The updated settlement represented Tampa’s second-highest price on record, behind the $615.50-$618.50/lt set in the third quarter of 2008, and easily outpaced week-ago speculation centered on a possible $130-$150/lt increase from the first-quarter level.
Players generally tied the price push to instability stemming from Russia’s invasion of Ukraine. Reduced exports available from former Soviet Union (FSU) countries, due either to sanctions, production cutbacks, or port closures, were described by many as a driver, pushing up prices in a number of international markets.
Players specifically pointed to uncertainty surrounding OCP’s phosphate production schedule as casting a shadow over global sulfur supply estimates. Spiking logistics costs, owing to the international rise in oil prices, were also cited as a factor, as was ongoing strength in the U.S. phosphate markets.
Most downplayed talk of sulfur supply uncertainties in the U.S., however, and instead attributed the Tampa increase to recent price surges in major international markets like North Africa, Brazil, and China. Others similarly framed the updated Tampa contract as an effort to keep as many sulfur tons onshore as possible.
Some hinted that the quarterly length of the updated contract may have played a factor in the price’s final landing spot. “Suppliers dug in because it was the price for the whole quarter,” said one player. Market watchers previously questioned whether Tampa contracts might temporarily shift to a monthly term due to current international volatility.
“Like last quarter, (buyers) will overpay for a few weeks,” said another market player. “Then (buyers will) be even, then look like geniuses (at the end of the quarter) with low sulfur prices.
“I think the big concern is what goes up, must come down eventually,” the source added.
Following Tampa higher, Houston sulfur prices were indicated at $466/lt CFR, rising from $267/lt CFR in Q1, while NOLA sulfur indications jumped to $470/lt CFR, up from $271/lt CFR in the first quarter.
U.S. refinery utilization moved higher for the week, according to the Energy Information Administration (EIA). Refiners ran at 92.1 percent of capacity for the week ending March 25, up 1.0 point from the prior week’s 91.1 percent rate. The current rate remained ahead of both the year-ago 83.9 percent and the 87.4 percent five-year average.
Daily crude inputs moved up to an average 15.913 million barrels/d, lifting 35,000 barrels/d from 15.878 million barrels/d noted previously.
U.S. Gulf:
Genscape reported a return to normal production levels at the Motiva Port Arthur, Texas, refinery’s 95,000 barrel/d DCU-2 coking unit on March 26. The unit had been showing signs of decreased activity since March 17.
The Calcasieu Lake Charles, La., refinery suffered a complete shutdown on March 28, according to Genscape. The shutdown was accompanied by flaring from all units. The plant was successfully restarted two days later, on March 30.
Citgo shut a 51,000 barrel/d hydrocracker at the company’s Lake Charles facility on March 28. A 60,000 barrel/d catalytic reformer was reported going offline on March 10, while a 50,000 barrel/d vacuum distillation unit (VDU), a 36,000 barrel/d VDU, and a 34,000 barrel/d coking unit were noted to remain offline for “prolonged periods.”
Multiple unit shutdowns were observed at Valero’s Meraux, La., refinery on March 30. Among the units taken offline were a 128,000 barrel/d crude distillation unit (CDU), a 50,000 barrel/d VDU, and two sulfur recovery units. A 32,000 barrel/d catalytic reformer was reportedly shut on March 29.
Pricing out of the U.S. Gulf was noted following Brazil higher, to a reported $420-$430/mt FOB range. The market was previously referenced at $365-$375/mt FOB.
Brazil:
Brazil values were seen lifting to the $480-$485/mt CFR range, increasing from $410-$415/mt CFR noted previously. Players described indications for the next round of business popping closer to $495/mt CFR.
Vancouver:
Firming prices at China were noted lifting Vancouver to a reported $400-$410/mt FOB range.
Alberta:
The rise at both Tampa and Vancouver sent Alberta indications soaring to $330-$411/mt FOB, players said, rising from $167-$330/mt FOB in the prior report. Prilled tons selling offshore at Vancouver were noted at the bottom of the range, while molten material contracted into the Tampa market – currently valued above North American spot levels – were expected at the range’s top.
West Coast:
West Coast prills were indicated on par with Vancouver at $400-$410/mt FOB, rising from $390-$400/mt FOB at last report.
Negotiations for the second-quarter price of molten sulfur loading from U.S. West Coast locations were reported underway on March 31. First-quarter contracts were quoted at $230-$245/lt FOB.
China:
Recent import pricing at China was heard firming to the $435-$445/mt CFR range, a rise from $430-$435/mt CFR at last report. Forward business was anticipated to press higher, with players voicing expectations of a move into the $450s/mt CFR.
ADNOC:
April ADNOC prill offers were heard at $420/mt FOB Ruwais, increasing by $85/mt from $335/mt FOB in March.
Qatar:
Pricing from Muntajat was tabbed at $430/mt FOB Ras Laffan for April loading, up $97/mt from the prior month’s $333/mt FOB.