Tampa: Sources were in general agreement concerning the upcoming fourth-quarter contract for molten sulfur delivered to Tampa. “Down,” one market insider said. “It has to go down.”
“The suspicion among most industry participants is that prices will come down in sympathy with the direction of the international (Chinese) market,” another contact said.
Early speculation centered on a price drop in the $15-$20/lt range, although some cautioned against expecting price ideas to move as sharply as seen in the Chinese spot market, where instability has generally been attributed to currency fluctuations and tax structure changes rather than shifting fundamentals.
Sources were divided on the state of supply available in the domestic system. One side pointed to a recent increase in spot cargoes offered from Gulf Coast refiners as evidence of excess sulfur needing a home, while others cited shrinking refining margins as a motivation for refiners to put their facilities on turnaround.
Molten sulfur delivered to Tampa was priced at $137/lt for the third quarter.
PBF Energy restarted an 82,000 barrels/d refining unit at its Delaware City refinery last week, according to reports. The unit was damaged by an Aug. 21 fire affecting the facility’s catalytic cracking unit, which in turn forced a number of other systems to operate at reduced rates.
Domestic refinery capacity stumbled last week, according to the U.S. Energy Information Administration (EIA). Refiners operated at 90.9 percent of capacity for the week ending Sept. 18, down 2.2 percent from the previous week’s 93.1 percent and also lower than the year-ago 93.4 percent, but up from the five-year average of 90.1 percent.
Average daily crude inputs also fell, the EIA said. The week’s inputs came in at 16.203 million barrels/d, 310,000 barrels/d below the previous week’s 16.513 million barrels/d.
U.S. Gulf: Prices on the Gulf prill market were called $115-$120/mt FOB for the week, lower than the previous week’s $125-$130/mt FOB.
Vancouver: Tumbling price ideas in the Chinese spot market pulled the reins on a number of international markets last week, sources said. Some argued that the Chinese market had bounced from a bottom in the $120s/mt CFR for the week. Bids were reported as low as $120/mt CFR, although no deals were confirmed at that level. A handful of transactions were reported above $130/mt CFR.
Vancouver traders, many of whom were said to have abstained from offering to China until the market showed signs of stabilizing, announced concluded transactions at $115/mt FOB last week, lower than the last reported $125-$130/mt FOB range.
Citing currency exchange fluctuations that benefitted Canadian sellers, sources quoted Alberta recent producer netbacks in a range of $15-$85/mt, up from (-)$5-$85/mt.
West Coast: Sources quoted the West Coast formed sulfur market lower last week, at $110-$115/mt FOB. Offshore prices in the region were called $120-$130/mt FOB.
California molten contracts were quoted at $75-$125/lt FOB for the third quarter.
ExxonMobil has given up on plans to quickly restart its damaged Torrance, Calif., refinery, according to reports, opting instead for a longer-term approach that would likely see the plant return to operation in February 2016.
Reports suggested that Exxon failed to convince California state regulators to greenlight the use of outdated pollution control equipment while repairs are underway. Sources said the temporary equipment would have allowed the refinery to run at an estimated 65-85 percent capacity. Industry observers speculated that the facility is currently operating at less than 20 percent of capacity.