Tampa:
The Tampa sulfur market’s second large buyer announced a fourth-quarter settlement with suppliers on Oct. 8 valued at $46/lt CFR, a $29/lt decline from the third-quarter $75/lt contract, and matching pricing announced in the previous week by other consumers (GM Oct. 4, p. 14).
With major buyers in agreement, the fourth-quarter Tampa molten sulfur index softened to $46/lt CFR.
Numerous factors contributed to the decline, including weakness in both the domestic phosphate and offshore sulfur markets. Recent price ideas in the U.S. Gulf sulfur market in the upper- to mid-$40s/mt FOB were named as a significant guidepost for Tampa, as were recently concluded Brazil trades reported at $66/mt CFR.
The large drop was not unexpected, as early prediction were heard in a $20-$30/lt range below third-quarter levels. Those projections quickly deteriorated to $30/lt or more in the weeks preceding the agreement, leading some to describe the ultimate $46/lt outcome as a “gift” to sulfur producers.
The $46/lt contract represents the market’s lowest valuation since the fourth-quarter settlement of 2009, valued at $30/lt.
Trailing Tampa lower, the Houston molten contract moved to $31/lt from $60/lt in the previous quarter. U.S. Gulf/NOLA contracts softened to $35/lt from $64/lt in Q3.
Union workers at the 285,000 barrel/d Phillips 66 Bayway refinery in Linden, N.J., could be headed for a lockout after failing to ratify a proposed contract extension on Oct. 4, Reuters reported. The workers are currently operating under a rolling 24-hour contract after their previous long-term deal expired on Sept. 30.
At issue is a management plan to expand worker responsibilities to include the operation of multiple refining units, viewed as a potential safety concern by the union. The proposal also included an 11 percent pay raise.
U.S. refining capacity pushed lower for the week, according to the Energy Information Administration (EIA), marking a fourth consecutive period of declining utilization stretching back to Sept. 13. Refiners operated at 85.7 percent for the week ending Oct. 4, down 0.7 points from the prior week’s 86.4 percent, and also trailing the year-ago 88.8 percent and the five-year average of 87.3 percent.
Daily crude inputs also pushed lower, sinking beneath the 16 million barrel/d mark for the first time since March 29. Refiners processed an average of 15.656 million barrels/d, a 451,000 barrel/d decline from 16.017 million barrels/d reported for the previous week.
U.S. Imports:
August sulfur imports were noted at 329,362 st, a 76 percent rise from 187,394 st last year. Imports were also up for the July-August period to 672,354 st, a 75 percent jump from the previous 384,982 st.
U.S. Exports:
Sulfur exports for August slipped to 135,878 st, down 29 percent from last year’s 190,103 st. July-August shipments totaled 268,094 st, down 35 percent from 414,821 st.
U.S. Gulf:
Price ideas on the U.S. Gulf market continued at $45-$50/mt FOB, sources said, unmoved from one week earlier.
Brazil:
The most-recent Brazil spot market continued to be noted at $66/mt CFR, unchanged from the prior report.
Buyers in Brazil voiced intentions to forego negotiating fourth-quarter supply contracts, and instead expected to meet their needs through the spot market. Market watchers believed the move signaled expectations of further price declines in the coming months.
Third-quarter contracts with suppliers located in the Middle East were quoted at $103/mt CFR.
Vancouver:
Husky Energy on Oct. 4 announced plans to sell its Prince George Refinery to Tidewater Midstream and Infrastructure, Reuters reported. The all-cash deal for the 12,000 barrel/d refinery was valued at $161.59 million.
Market players continued to call the Vancouver market in the $45-$50/mt FOB range, steady from recent reports.
Alberta:
Alberta sulfur netbacks softened to (-)$81-(-)$20/mt FOB based on falling values at Tampa. The market was previously noted at (-)$52-(-)$20/mt FOB.
West Coast:
West Coast prills continued at $45-$50/mt FOB, flat from one week earlier. Molten sulfur contracts were reported at $42-$46/lt FOB for fourth-quarter contracts, falling from $70-$85/lt FOB in the previous quarter.
China:
The recent China prill market was heard at $67-$72/mt CFR, steady from the prior report.
ADNOC:
The Abu Dhabi National Oil Co. announced October prill pricing at $49/mt FOB Ruwais, a $20/mt FOB decline from the previous month’s $69/mt FOB offer.
Qatar:
Muntajat set pricing at $48/mt FOB Ras Laffan for October, down $17/mt from $65/mt FOB in September.