Tampa: Sources reported a slow domestic sulfur market heading into next week’s TFI World Fertilizer Conference in San Diego.
Few surprises were expected in the lead-up to fourth-quarter Tampa negotiations. Most market players expected a rollover or small increase from the current $65/lt DEL contract, but differed on which factors might carry the most weight in the upcoming talks. The domestic market’s overall supply landscape, Mosaic’s solid sulfur melter, the U.S. Gulf export price, and the strength of the Chinese and Middle Eastern markets were all touted as potentially important in determining Tampa values.
The second- and third-quarter 2016 negotiations prioritized the U.S. Gulf price over international market strength, some argued, while other recent quarters often looked toward the Eastern markets for guidance.
The changing domestic supply landscape remained a hot topic of conversation as well, with Canadian producers now said to be offering more tons offshore via Vancouver than to U.S. buyers tied to the Tampa index.
Other sources, however, minimized the effect of supply on negotiations. “Not sure why supply/demand would affect pricing (now),” said one trader. “It hasn’t for some time.”
“The Tampa price is now more influenced by the U.S. Gulf price and the price Mosaic can import cargoes to Tampa for their melter,” added another supplier.
Others looked to the world’s largest sulfur buyer for direction. “China will ripple to all the markets,” commented one observer.
The third-quarter contract price of molten sulfur delivered to Tampa was $65/lt.
U.S. refinery utilization fell for a second consecutive week, according to data from the Energy Information Administration (EIA). Refiners operated at 92.0 percent capacity for the week ending Sept. 16, a 0.9 percent decline from the prior week’s 92.9 percent, but ahead of both the year-ago 90.9 percent and the 90.8 percent five-year average.
Daily crude inputs also fell, EIA data revealed. Average daily crude inputs were calculated at 16.587 million barrels/d, a 143,000 barrel/d drop from the last reported 16.730 million barrels/d.
U.S. Gulf: Valero Energy Corp. ratcheted up unit shutdowns as part of a planned turnaround at its 335,000 barrel/d Port Arthur, Texas, refinery last week, sources said.
The plant’s 268,000 barrel/d crude distillation unit was shuttered for four weeks starting Sept. 19, and a 100,000 barrel/d coking unit powered down on the same day and is slated to remain offline throughout October.
Sulfur sold from the U.S. Gulf was quoted at $60/mt FOB in recent trading, unmoved from the prior week.
Vancouver: Vancouver market traders continued to call offshore spot business at $65-$70/mt FOB based on sales to Mexico and Australia. Short-term contract rates kept pace with spot at $65-$70/mt FOB.
The Chinese market was steady at $81-$82/mt CFR despite rumored firming, sources said. Recent port inventories were calculated at 1.8-1.9 million mt.
Alberta producers saw netbacks of (-)$55-$20/mt FOB.
West Coast: A wide-ranging Southern California power outage shut down the PBF Energy Inc. refinery at Torrance, Calif., on Sept. 19, according to local reports.
The outage triggered early-morning flaring followed by an unplanned production stoppage, and a full restart of the 155,000 barrel/d facility is expected to require “multiple days,” sources said. A February 2015 explosion at the refinery forced production down to approximately 20 percent capacity for the following year.
The West Coast prill market was called flat at $60-$65/mt FOB. Sources noted third-quarter molten contracts in the $50-$75/lt FOB range.
ADNOC: ADNOC formed sulfur was quoted at $77/mt FOB Ruwais for the month of September, $7/mt above the $70/mt FOB August price.
Aramco: Saudi Aramco cargoes for September loading were quoted at $74/mt FOB Jubail. The August price was $66/mt FOB, $8/mt below current levels.
Tasweeq: The September official selling price from Qatar’s state-owned Tasweeq was $74/mt FOB Ras Laffan, a $9/mt increase from $65/mt FOB in August.