Tampa:

Sources confirmed the start of third-quarter Tampa molten sulfur negotiations during the week. Staid week-over-week pricing in the international markets offered little change in earlier speculation of a $0-$10/lt increase on the last $192/lt CFR contract price, sources said.

One point of contention in negotiations was expected to arise from increased freight costs relative to the start of the second quarter. “Transportation is an issue, both in terms of price as well as capacity, whether via vessel, rail, or truck,” said one source. “It is to be determined if the additional cost comes out of the supplier’s or buyer’s hide.”

Refinery utilization pressed higher for the week ending June 25, the Energy Information Administration (EIA) reported. Total U.S. operable capacity stood at 92.9 percent for the period, a 0.7 point rise from the previous 92.2 percent, and also ahead of the year-ago 75.5 percent and the 90.7 percent five-year average.

Daily crude inputs were reported lifting to an average 16.299 million barrels/d for the week, up 187,000 barrel/d from the previous 16.112 million barrel/d average.

U.S. Gulf:

Total U.S. refining capacity retracted by 4.5 percent in 2020, according to U.S. government data and reported by Reuters, primarily the result of falling demand during the COVID-19 pandemic. The lower numbers represented the industry’s first decrease since 2018, and the largest decline since the Great Recession in 2012.

Combined nationwide capacity shrank to 18.13 million barrels/d from 18.98 million barrels/d in 2019, with refiners shutting five facilities during the year. Marathon Petroleum closed three refineries, while Royal Dutch Shell Plc and HollyFrontier closed one each. U.S. gasoline demand softened 13 percent on the year, a four-year low.

Reuters reported a quiet spell in the two-month lockout at the ExxonMobil Corp. refinery in Beaumont, Texas, with no new proposals exchanged during the week. Exxon is reportedly seeking the power to end a system of seniority among contracted workers, as well as create separate employment contracts for both the refinery and a lube oil plant located at the site.

Beaumont was reported to be operating at approximately 60 percent of its 369,000 barrel/d capacity, with management using temporary workers to maintain operations. Exxon locked out United Steelworkers union (USW) employees on May 1 due to a perceived strike risk.

Genscape reported the June 25 shutdown of a 65,000 barrel/d hydrocracker at Beaumont. The unit was reported restarting on June 28.

A 96,000 barrel/d fluidic catalytic cracking unit (FCC) was noted shutting on June 20 at the Flint Hills Corpus Christi West plant. The unit was projected to remain offline for approximately two weeks for repairs.

Marathon shut the 66,000 barrel/d Ultraformer 4 catalytic reformer at the company’s refinery in Galveston Bay, Texas, on June 30. Valero initiated restart efforts on a 45,000 barrel/d hydrocracker at its Port Arthur, Texas, facility on June 28, which has been offline since a June 10 fire, Genscape reported.

Price ideas on the Gulf sulfur export market continued to be reported in the $190-$200/mt FOB range, steady from the prior report.

Brazil:

The recent Brazil spot import market was called flat at $221-$230/mt FOB. Sources quoted second-quarter contracts in the $213-$214/mt CFR range.

Vancouver:

Nothing new was reported on the week’s Vancouver export market, leaving last-done unchanged at $178-$180/mt FOB.

Alberta:

Molten and prilled sulfur pricing was noted netting back in a wide $65-$110/mt FOB range, sources said, steady from one week earlier.

West Coast:

Solid sulfur loading from the West Coast was priced at $178-$180/mt FOB, unmoved from the prior report.

Sources said third-quarter molten sulfur contracts were starting to conclude during the week, with most agreements reportedly rolling over from second-quarter levels. Prices were generally heard in the $145-$155/lt FOB range.

China:

China state-owned refiners Sinopec, PetroChina, CNOOC, and Sinochem operated at a combined 82.4 percent of capacity in June, Platts reported, outpacing both May’s 80 percent and April’s 76 percent level. The increase came as more facilities returned from planned maintenance activities scheduled for the April-May window. Sinopec led the way with an 85.5 percent operating rate for the month.

Sources continued to call the recent spot sulfur market in the $217-$220/mt CFR range, unmoved from the prior week.