Tampa: Market sentiment regarding the second-quarter price of molten sulfur delivered to Tampa exhibited a newfound lack of consensus last week.
As recently as two weeks ago, sources speculated that a rollover or small price decline was a likely outcome for the updated contracts. International softness spearheaded by stagnating demand in the Chinese spot market saw those expectations adjusted downward in the previous report, however, with most of them declaring an expected settlement to come in $10-$20/lt below the first-quarter price of $147/lt CFR.
With Chinese inventories said to be hovering below comfort levels at around 1 million mt, some market watchers are now saying that a demand surge in that market is inevitable.
Timing would be the key, they argue. A quick second-quarter settlement at current market conditions would likely produce an outcome lower by $10-$20/lt, but should China reenter the market en masse, the fresh demand would drive international markets higher, minimizing a decline to the quarterly price at Tampa.
Sources have increasingly pointed to international currency markets as a primary factor in the Chinese sulfur market’s recent cooling. Though international sulfur markets are down in terms of overall dollar amounts, the strength of the U.S. dollar relative to many international currencies has left many foreign netbacks relatively unchanged, market watchers say.
Other factors are at play in the second-quarter agreement as well, including perceived oversupply in the NOLA phosphate market, which has pushed prices down around $405-$410/st FOB as a result. Declines in the price of corn futures were also a factor, some believed. Should those influences hold, sources argued, raw material input prices would necessarily be impacted.
U.S. refinery utilization continued its recent hot streak, according to the U.S. Energy Information Administration, climbing for the fifth consecutive period. Domestic capacity was tabbed at 90.1 percent for the week ending April 3, a 0.7 percent increase from the previous week’s 89.4 percent, and also higher than the year-ago rate of 87.5 percent and the five-year average of 86.0 percent five-year.
Daily crude inputs also rose to an average 15.929 million barrels/d, a 201,000 barrel increase from the previous week’s 15.728 million barrels/d.
U.S. Gulf: The Gulf offshore market was called $130-$135/mt FOB, unchanged from the week before.
Vancouver: Prices in the Chinese spot market continued to float in the $150s/mt CFR, sources said, leading to Vancouver spot being quoted in a wide range of $135-$155/mt FOB. That range was unchanged from the previous report.
Alberta-based refiner Syncrude 21 prepared to enter a 45-day turnaround period that is expected to begin around the middle of the month, one contact noted. The turnaround will see production at the facility cut in half.
Alberta sulfur was unchanged at $5-$85/mt FOB.
West Coast: West Coast prill was quoted in a range of $130-$145/mt FOB. Second-quarter molten contracts fell in a range of $90-$130/lt FOB.
ADNOC: ADNOC sulfur was posted at $140/mt FOB Ruwais for the month of April, a decline of $35/mt FOB from March levels of $175/mt FOB.
Aramco: Saudi Aramco was listed at $165/mt FOB Jubail for April. A new May price was expected to be announced in the middle of the month.
Tasweeq: Qatar sulfur was put at $145/mt FOB for April, $19/mt below the March price of $164/mt FOB.