Tampa: Questions regarding the effect of Mosaic’s first-quarter phosphate production curtailment on the market took center stage in an otherwise slow week.
Some believed the cutback was a bad omen for second-quarter molten sulfur pricing. “Sulfur took a downturn these last two quarters,” said one market player. “Usually you would expect to see an uptick in Q2, but now I’m not sure I can see that happening.”
Others took a brighter view, however. “Conversations surrounding Mosaic’s announced curtailment have been in the marketplace, but it’s nothing the spring fertilizer season won’t resolve in the next 30-45 days,” said one source.
The curtailment news was expected to delay Mosaic’s New Wales, Fla., solid sulfur melter from entering production. The unit was reportedly languishing in the commissioning phase as of the previous report, despite Mosaic’s original plan to bring it online in late October 2015.
Sources expected the facility to finally enter production in February. Suddenly flush with excess sulfur supply due to the newly reduced production schedule, however, the melter’s timeline is now up in the air. “(Mosaic) is not in a real hurry to get the melter up and running,” said one a source, “not when (they are) struggling to contain sulfur across a high point.”
The contract price of molten sulfur delivered to Tampa was $95/lt for the first quarter, down $15/lt from $110/lt in the fourth quarter.
Refinery utilization was down for the week, according to the U.S. Energy Information Administration (EIA). Capacity for the week ending Jan. 29 was 86.6 percent, a 0.8 percent decline from the previous week’s 87.4 percent a week, and represented a fifth consecutive week of falling domestic utilization. Capacity was also lower than the year-ago 89.9 percent, but beat the 85.9 percent five-year average.
Average daily crude inputs were marginally lower at 15.615 million barrels/d, 24,000 barrels below the 15.639 million barrels/d total reported during the previous week.
U.S. Gulf: The Gulf price of solid sulfur was called $90/mt FOB for the week, based on recent transactions into Brazil.
Vancouver: Reflecting a “broad spectrum of deals,” the Vancouver spot market was quoted in a range of $85-$105/mt FOB, down from $110-$115/mt the week before. Sales to China were responsible for the low end of the range, sources said.
The Chinese spot market was on hold heading into the Feb. 8 Lunar New Year celebration, with no new business expected to transpire before Feb. 15 at the earliest, and possibly not until March. Last-done Chinese spot was called $95-$100/mt CFR.
Sources speculated that lackluster Chinese demand brought on by bad weather could trigger a phosphate production curtailment by Chinese producers, threatening to further erode the country’s weak sulfur import market.
Alberta producer netbacks were reported in a range of (-)$12-$60/mt FOB.
West Coast: Trailing Vancouver lower, West Coast formed sulfur was called $80-$100/mt FOB, down from $105-$110/mt FOB at last report.
Molten contracts continued to land in a range of $65-$115/lt FOB for the first quarter, sources said.
ADNOC: The Abu Dhabi National Oil Co. released pricing for February loading last week. New offers were quoted at $105/mt FOB Ruwais, a decline of $17/mt FOB from January’s $122/mt FOB level.
Aramco: Formed Saudi Aramco sulfur was priced at $115/mt FOB Jubail for February, $13/mt FOB below the $128/mt FOB January price.
Tasweeq: Tasweeq also announced lower pricing f