Tampa:
The Tampa molten sulfur market’s two largest buyers announced updated contracts with suppliers during the week, moving the second-quarter Tampa index to $192/lt CFR, doubling the first-quarter $96/lt CFR price.
The $96/lt increase represented the Tampa market’s largest single-quarter hike since Q3 2008, when agreements jumped $165/lt to a historic high of $615.50-$618.50/lt.
A historic supply shock caused by the ongoing COVID-19 pandemic was cited as a key driver of the higher prices, as worldwide refinery shutdowns and curtailments have left production at uncomfortably low levels. It took the worldwide sulfur markets nearly a year to fully react to the tightening supply landscape, players said, pointing to smaller increases recorded through the prior 12 months.
First-quarter 2021 proved the breaking point, however, with prices in a number of international markets, including key indicators China and Brazil nearly doubling from early-January levels, leaving the Tampa index at a conspicuous discount to the rest of the world. “The [Tampa] price needed to go up to international levels,” one market player said.
Sources often bemoaned the shortage of spot availability in the U.S. market throughout the first quarter. Some pinned second-quarter hopes on Canadian suppliers, but a slate of planned turnarounds announced for Q2 turned up the heat instead.
A steady recovery in the phosphate markets, an effect of Mosaic’s successful bid for countervailing duties against imports of Moroccan and Russian phosphates, also contributed support at Tampa.
Sources noted the unusual event of Tampa now operating at a premium to offshore markets at Vancouver and the U.S. Gulf, both of which were seen topping out in the $180s/mt FOB for the week.
“The recent changes in U.S. and Canadian supply/demand would seem to indicate that North America is running at a deficit to its needs, and the indexes are just starting to reflect that,” said one source.
“The U.S. is particularly tight because of COVID,” added another source. “Refinery rates have recovered, but are well below pre-COVID levels. Production in the U.S. is still 1.5 million mt below the peak in 2018.”
Refinery utilization inched higher for the week, the U.S. Energy Information Administration (EIA) reported. Nationwide refining capacity was noted firming to 84.0 percent for the week ending April 2, a 0.1-point increase from 83.9 percent in the prior report. The current rate also topped the year-ago 75.6 percent, while trailing the 86.3 percent five-year average.
Crude inputs were also higher, moving above the 15 million barrel/d mark for the first time since March 20, 2020. Refineries processed an average 15.044 million barrels/d during the week, a 103,000 barrel/d increase from 14.941 million barrels/d in the prior report.
U.S. Gulf:
Despite softer pricing reported out of Brazil, easing freight rates allowed U.S. Gulf export price ideas to hold around the $180/mt FOB mark for the week, sources said.
U.S. Imports:
Sulfur imports for July-February were up 4.3 percent, to 2.41 million st from the year-ago 2.31 million st. Imports fell 5.4 percent in February, however, to 248,007 st from the year-ago 262,026 st.
U.S. Exports:
Sulfur exports softened 33.9 percent in July-February, to 709,927 st from the year-ago 1.07 million st. February shipments stood at 83,878 st, falling 59.8 percent year-over-year from 208,784 st.
Brazil:
Brazil spot imports were quoted at $209/mt FOB for the week, softening from $216/mt CFR in the prior report. Sources noted second-quarter contracts at Brazil settling in the $213-$214/mt CFR range, rising from $116-$119/mt CFR in the first quarter.
Vancouver:
Last-done at Vancouver continued to be heard in the $170-$180/mt FOB range, steady from the prior report.
Alberta:
Albert sulfur netbacks took a big step up for the week, moving to $65-$110/mt FOB from the week-ago (-)$31-$110/mt FOB. The wide range encompassed both molten sulfur tons contracted into the U.S. and prilled material selling internationally through the Vancouver export market.
West Coast:
West Coast prills continued to fall in the $170-$180/mt FOB range for the week, unmoved from the prior report.
Contracts for molten sulfur loading from West Coast locations were reported settling in the $140-$155/lt FOB range for second quarter fulfillment, rising from $70-$77/lt FOB in the first quarter. Sources traced the increase to firming available prill netbacks for West Coast sellers, as well as ongoing supply tightness stemming from the COVID-19 pandemic.
China:
Sources noted the China spot market taking a breather during the week, leaving last-done at a wide $180-$200/mt CFR range.
ADNOC:
Sources noted ADNOC prill offers firming to $185/mt FOB Ruwais for April lifting, increasing from $183/mt FOB in March.
Qatar:
Qatar Petroleum marketing arm Muntajat set April solid sulfur pricing at $185/mt FOB Ras Laffan, sources said, up from $183/mt FOB in the prior period.