Tampa: Ongoing international market softness continued to depress domestic sentiment heading into the fourth quarter, sources said.
With negotiations for the fourth-quarter contract price of molten sulfur delivered to Tampa reported to be partially underway on Oct. 1, dropping prices worldwide caused many market watchers to predict a decrease of $20-$25/lt from third-quarter levels of $137/lt.
A number of sources specifically cited the plummeting Tasweeq prill price as informing their estimate. Qatar decreased October offers by $30/mt from its $133/mt FOB September price. Tasweeq’s adjustment came as the Chinese spot market crashed through support at $130/mt CFR to post numbers in the mid-$120s/mt CFR.
Heavy rains at Chevron’s Pascagoula, Miss., refinery were blamed for a chemical leak last week. Rains caused the lid on a 4-million-gallon liquid petroleum distillate tank to collapse, releasing fumes and possibly liquid. Both EPA and the U.S. Coast Guard were reportedly onsite monitoring the situation on Sept. 29.
Refinery utilization dropped for a second consecutive week, according to the U.S Energy Information Administration (EIA). Domestic capacity was pegged at 89.8 percent for the week ending Sept. 25, a decline of 1.1 percent from the prior week’s 90.9 percent, but even with the year-ago 89.8 percent and ahead of the five-year average of 88.9 percent.
Daily crude inputs also fell, registering an average 15.962 million barrels/d for the week, down by 241,000 barrels/d from the previous week’s 16.203 million barrels/d.
U.S. Gulf: Prill sold from the Gulf Coast was called $110-$115/mt FOB, down from $115-$120/mt FOB at last report.
Vancouver: Pricing on the Vancouver spot market continued to slip last week as Chinese sulfur prices fell into the $120s/mt CFR.
Market watchers quoted fresh Vancouver cargoes at $110/mt FOB. A number of traders were reported to have re-entered the market believing China had found a floor around $130/mt CFR, but persistent Chinese bids in the $120s/mt succeeded in dragging prices lower.
Despite the falling values, sources said Chinese demand remains strong. “China’s demand thus far for the year is up 12 percent from last year,” one contact said. “Offshore prices are down as a result of currency exchange rates (rather than) driven by demand.”
Alberta sulfur producer netbacks were cited in the $15-$85/mt range, but observers expect those numbers to fall quickly once a fourth-quarter Tampa settlement is reached. “(Alberta sulfur) prices will obviously be headed down,” one observer said.
West Coast: The West Coast sulfur market trailed Vancouver lower last week, falling to a range of $105-$110/mt FOB.
California molten contracts fell to $75-$125/lt FOB for the third quarter. An updated fourth-quarter price is expected soon.
ExxonMobil Corp. announced Sept. 30 that it has agreed to sell its beleaguered Torrance, Calif., refinery to New Jersey-based refining group PBF Energy. The $537.5 million deal is expected to conclude after repairs are completed in second-quarter 2016.
The sale follows a February explosion that injured four workers. ExxonMobil received 19 Cal/OSHA citations and was fined $566,600 for the blast. Sources estimate the facility is currently operating at or below 20 percent of its 155,000 barrel/d capacity.
ADNOC: ADNOC sulfur remained at $135/mt FOB Ruwais for the month of September. International market weakness was expected to push that number significantly lower for October.
Aramco: Saudi Aramco’s October price for prilled sulfur was $123/mt FOB Jubail, $27/mt below the September rate of $150/mt FO