Tampa: The United Steelworkers union (USW) last week expanded the nation’s first widespread refinery strike since 1980, citing unfair negotiating tactics by oil companies.
BP plc’s massive refinery in Whiting, Ind., and the Husky Energy facility in Toledo, Ohio, were both given 24 hours’ notice of employee walk-offs, according to reports, bringing the total number of striking refineries to 11.
The USW accused refiners of “bad-faith bargaining,” as well as refusing to broach mandatory negotiating subjects, delaying information requests, and threatening striking workers. About 5,440 hourly workers were on strike at the 11 facilities. All but one of the refineries have continued to operate using non-union workers trained in anticipation of a walkout.
The Tesoro refinery in Martinez, Calif., which was already operating at half-capacity, shut down completely, citing safety concerns at the start of the strike. The 166,000 barrel/d facility accounts for about 8 percent of California’s crude refining capacity, leading one consumer group to lobby state officials to investigate the closure.
The USW is seeking larger annual raises and improvements to worker safety protocols, but their bargaining leverage has been weakened substantially by multiyear lows in the price of gas at the pump.
Sulfur industry sources agreed that the strike has created no appreciable production drop-off to date, though traffic in and out of the affected refineries had experienced some slowdown. Nevertheless, a prolonged strike could increase pressure on the refineries over time, sources said.
U.S. refining utilization ticked up last week, marking the third consecutive week of increases since a spate of cold weather-related incidents slashed capacity in the third week of January.
Utilization was rated at 90.0 percent for the week ending Feb. 6, according to the U.S. Energy Information Administration, up slightly from the previous week’s 89.9 percent, but considerably higher than both the year-ago 87.1 percent and the five-year average of 85.2 percent.
Average daily crude inputs were up as well at 15.564 million barrels/d, an increase of 20,000 barrels/d from the 15.544 million barrels/d at last report.
Molten sulfur delivered to Tampa was contracted at $147/lt CFR for the first quarter, up from $129/lt in fourth-quarter 2014.
U.S. Gulf: Gulf sulfur was steady at $160-$165/mt FOB.
U.S. Imports: July-December sulfur imports were off 19 percent, to 921,645 st from the year-ago 1.13 million st. December was off 6 percent, to 158,405 st from 168,726 st.
Vancouver: With the Chinese market on hiatus through February in observance of the Lunar New Year holiday, prices on the Vancouver spot market were unchanged at $165-$175/mt FOB.
Sulfur industry sources were weighing the effect of a potential strike at CP Rail (see pg. 1). One source estimated that 60,000-80,000 mt of monthly sulfur supply could be disrupted by a freight stoppage at CP. Shell Canada is heavily dependent on CP and would be most directly affected, the source said. Other companies were not immune, however, as CP is known to cooperate on some transit segments with CN.
Syncrude 21 remained offline last week. Sources speculated that the facility could resume loading sometime in second-half February.
Alberta sulfur was (-)$10-$75/mt for the week.
West Coast: West Coast sulfur was unchanged at $160-$165/mt FOB. First-quarter California molten contracts were in the $90-$130/lt range.
Benelux: The fourth-quarter price of sulfur at Benelux was $158-$172/mt.
ADNOC: The February price of ADNOC sulfur was set at $180/mt FOB, an increase of $22/mt