Tampa:
The Tampa molten sulfur market’s largest buyer reported settling first-quarter supply contracts at $130/lt CFR, a $40/lt increase from $90/lt CFR in the fourth quarter. The market’s second largest buyer reported that it too was in the process of settling with suppliers at $130/lt CFR during the week.
The $40/lt increase, a 44% jump on the prior contract, came as no surprise to the market. International prices have continued to recover from price instability triggered by the war in Ukraine, in which the US Gulf export market was seen dropping to as low as $10/mt FOB in third-quarter 2022. The market’s revival throughout the fourth quarter led players to predict a larger $50-$70/lt increase as late as mid-December, although subsequent softening witnessed in a number of key international markets pushed Tampa speculation lower before the end of the year. By last week, expectations had settled on a likely $30-$45/lt increase on the prior contract.
Players agreed that the settlement price was indicative of the broader sulfur landscape. “The 1Q price increase is simply an exercise in keeping North American markets on par with international markets,” a source said.
Looking ahead, a mix of lingering cold weather-related production outages and planned refinery turnarounds could interact with perceived lower consumption rates from some US phosphate producers in the short-term, sources said, potentially making for an unpredictable market going forward.
“(The) molten market is actually tightening up quite a bit, as there is a substantial amount of maintenance work ongoing with (the) supply-side and refineries,” said one source. “(It) appears the market will be quite volatile in terms of matching up supply/demand timing as we move forward.”
Following Tampa higher, first-quarter NOLA molten sulfur indications moved up to $119/lt CFR from $79/lt CFR. Tons delivered to Houston were indicated at $115/lt CFR for 1Q, firming from $75/lt CFR in the prior period.
Operable refining capacity pressed higher for the week ending Jan. 13, according to data released by the US Energy Information Administration (EIA), notching a second consecutive period of increased operations since Winter Storm Elliott forced production outages at a large number of US refineries in late December.
Refineries operated at 85.3% of nationwide capacity through the period, a 1.2 percentage point increase from 84.1% reported one week earlier. Despite the improvement, utilization for the period trailed both the year-ago 88.1% and five-year average of 88.4%.
Crude inputs were also higher, the EIA data showed, climbing to an average 14.853 million barrels/d, up 202,000 barrels/d from the week-ago 14.651 million barrels/d.
US Gulf:
Genscape reported numerous unit startups at the TotalEnergies Port Arthur, Texas, refinery during the week, including the plant’s 165,000 barrel/d ACU-1 crude distillation unit (CDU); a 55,000 barrel/d vacuum distillation unit (VDU); an 80,000 barrel/d fluidic catalytic cracking unit; and a number of hydrotreaters, catalytic cracking units, and coking units. The units had been reported offline since Dec. 23 due to Winter Storm Elliott. An 80,000 barrel/d CDU and 52,000 barrel/d VDU shut since Dec. 13 remained offline on Jan. 18.
With lower pricing reported into Brazil during the week, the US Gulf sulfur market softened to $130-$135/mt FOB from $148-$153/mt FOB reported previously.
Brazil:
New import pricing out of Brazil was quoted at $155/mt CFR, down from $172-$176/mt CFR in the prior report.
Sources described minimal contract activity for the first quarter, with as few as two vessels reportedly purchased under contract for January-March. Pricing for the period was believed to land in a general $172-$186/mt CFR range, above $119-$138/mt CFR noted for the fourth quarter.
Vancouver:
Recent pricing on sulfur exported from Vancouver was reported falling to $135-$140/mt FOB, a decline from $150-$155/mt FOB at last check.
Alberta:
Based both on the rising contract price of molten sulfur at Tampa and softer values noted out of Vancouver, netbacks to producers in Alberta moved to an indicated $15-$70/mt FOB range, a change from (-)$25-$85/mt FOB in the prior report. Tons contracted into the US market set the low, while prilled material selling offshore through the Vancouver export market established the range’s top end.
West Coast:
West Coast price indications followed Vancouver lower to $135-$140/mt FOB, off from $150-$155/mt FOB.
Molten sulfur contracts for tons loading from West Coast locations were reported in a $125-$135/lt FOB range for the first quarter, rising from $75-$79/lt FOB in the fourth quarter.
China:
Sources reported no new business out of China, citing proximity to the country’s upcoming Jan. 22 Lunar New Year holiday. Last-done continued to be called $155-$165/mt CFR.
ADNOC:
Abu Dhabi National Oil Co. postings for January were heard at $160/mt FOB Ruwais, a $20/mt decrease from $180/mt FOB in the prior period.
Qatar:
January offers for sulfur loading from Qatar were noted at $155/mt FOB Ras Laffan. Qatar tonnage was reported at $185/mt FOB in December, a $30/mt FOB difference.
Kuwait:
Kuwait solid sulfur cargoes were offered at $154/mt FOB for January lifting, sources said, off $29/mt from $183/mt FOB reported for December.