Tampa: Speculation on a potential landing spot for the first-quarter Tampa molten sulfur contract remained steady last week, with most sources expecting a $10/lt DEL or larger increase from the fourth-quarter $69.55/lt.
Strengthening in a number of international markets was cited as a basis for any potential domestic increase. China has reported sales above $100/mt CFR in consecutive weeks after buying in the high-$80s/mt at the start of the fourth quarter, while Middle East suppliers Aramco, ADNOC, and Tasweeq have increased prices by an average $15/mt over the same period.
The U.S. Gulf export market, a traditional indicator for Tampa, continued to cast a shadow over Tampa, however. Last-done in that market has lagged Vancouver spot by $15/mt or more, a disparity that some believe augurs poorly for first-quarter molten.
However, some have argued against viewing the Gulf’s relative price weakness as a measure of market sentiment, claiming that pricing is expected to increase markedly in the next round of business.
Negotiations will begin in January, sources said.
BP Plc announced the early completion of a “major” maintenance project at its 413,500 barrel/d Whiting, Ind., refinery, the Northwest Indiana Times reported. A number of intermittent production cuts were reported during the project, which BP called one of the largest in the refinery’s 127-year history. An announced oil blending unit shutdown, which was believed to be the final task of the project, was previously scheduled to run through January 2017.
Domestic refinery utilization rose last week, according to data released by the U.S. Energy Information Administration (EIA). Refinery runs were tabulated at 91.5 percent for the week ending Dec. 16, an increase of 1.0 percent from the prior week’s 90.5 percent and also higher than the year-ago 91.3 percent, but behind the five-year average of 91.9 percent.
Crude inputs also rose, the EIA said. Refiners processed an average of 16.658 million barrels/d, a 184,000 barrel/d increase from the 16.474 million barrels/d rate reported one week earlier.
U.S. Gulf: Sources called last-done on the Gulf export market unchanged at $70-$71/mt FOB, but argued that the market was due for a correction. “Not much has moved offshore to test pricing, but the expectation for the next quarter is that Gulf Coast pricing will be up by at least $10/mt FOB,” said one trader.
Vancouver: The Vancouver spot market ticked higher to $85-$89/mt FOB in recent trading, up from $85-$88/mt FOB at last report. Short-term contracts were valued in a similar range.
Chinese imports also rose thanks to a reported $107/mt CFR sale to an “end-user,” stretching the range of recent transactions to $101-$107/mt CFR, up from $101-$106/mt CFR at last report.
Some observers questioned China’s staying power, attributing the firming to increased speculation in the market. “I think we are seeing the top of what is sustainable,” argued one contact, who said he suspects there will be “a break in prices by their Chinese New Year celebration” on Jan. 28, 2017. The holiday is often celebrated over a period of weeks, effectively shutting down the market.
Others countered that the firming was reflective of real demand rather than trader speculation, citing the recent end-user sale as a benchmark of buyer sentiment. “Some have been predicting that prices would come off, but now it appears other buyers are entering the market,” commented one source.
Sulfur produced in Alberta netted back (-)$55-$20/mt FOB to suppliers, unchanged from the week before.
West Coast: Formed sulfur offered from West Coast suppliers was steady in the $80-$85/mt FOB range, sources said. Molten contracts were quoted in a $50-$75/lt FOB range for the fourth quarter.
Aramco: Saudi Aramco offered tons at $92/mt FOB Jubail for December loading, a $9/mt increase from the $83/mt FOB offered in November.
ADNOC: The Abu Dhabi National Oil Co. quoted December prills at $88/mt FOB Ruwais, up $6/mt from November’s $82/mt FOB.
Tasweeq: Qatar state-run producer Tasweeq’s price also firmed for December, with offer levels announced at $92/mt FOB Ras Laffan. The producer’s price for November was $10/mt lower at $82/mt FOB.