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.
