Tampa: Mosaic concluded contract negotiations with its sulfur suppliers last week, resulting in a fourth-quarter price of $129/lt CFR for molten sulfur delivered to Tampa. The new price represents a decline of $7/lt CFR from $136/lt CFR in the third quarter, and will be retroactive to Oct. 1.
PotashCorp had not settled with its suppliers as of Oct. 16, however, leaving the official Tampa price at $136/lt CFR for the time being.
Sources speculated that rapidly softening international markets contributed to the hastening of negotiations. Delivered prices at $140-$150/mt in China, spot levels quoted at $122/mt FOB in India, and a surprise $31/mt FOB cut to Saudi Aramco’s October price were all believed to contribute to the settlement.
China’s flagging sulfur market was widely viewed as depressing worldwide prices. The drop in delivered prices in China fueled perceptions that Chinese phosphate producers were having difficulty moving product, thus drastically reducing raw materials demand.
Mosaic’s recent production curtailment announcement played a part as well, reducing demand for the quarter and causing uncertainty in the domestic market. The company’s planned solid sulfur remelter was not believed to have played a significant role in the current settlement.
U.S. refinery operating capacity fell for a third consecutive period as more refineries entered their fall turnaround periods. Utilization for the week ending Oct. 10 was 88.1 percent of capacity, according to the U.S. Energy Information Administration, down 1.2 percent from the previous week’s 89.3 percent. Despite the drop, the weekly rate was still considerably higher than last year’s 86.2 percent and the five-year average of 85.3 percent.
Mirroring the fall in utilization, average daily crude inputs dropped to 15.321 million barrels/d, down from the prior week’s 15.554 million barrels/d.
U.S. Gulf: The Gulf price of sulfur was called $140-$145/mt FOB.
Vancouver: Sources reported a quiet Vancouver spot market, with last done quoted in a range of $140-$155/mt FOB.
The market may soon face downward pressure from softening international prices led by the Chinese sulfur market. Similarly, sources expected the downward trajectory of Mosaic’s fourth-quarter settlement to be replicated in the Vancouver market.
Canadian refiners Syncrude and Suncor both wrestled with unplanned shutdowns last week. Sources said Suncor was likely to return to production in 1-2 weeks, and Syncrude was targeting a late-October timeframe.
Alberta sulfur netbacks were unchanged at (-)$20-$80/mt.
West Coast: The price of prilled sulfur sold from the West Coast was quoted at $135-$140/mt FOB, down from $140-$145/mt FOB.
Fourth-quarter molten sulfur contracts were quoted in a range of $90-$130/lt FOB.
Benelux: The third-quarter price of Benelux sulfur was $158-$172/mt.
ADNOC: ADNOC sulfur was $150/mt for the month of October.
Aramco: Saudi Aramco’s October price was announced at $128/mt FOB, a drop of $31/mt FOB from $159/mt FOB in September.