Tampa: Expectations for the second-quarter contract price of molten sulfur delivered to Tampa continued to crystallize last week. Sources predicted a drop of $20-$30/lt from the first-quarter price of $95/lt.
Softening in a number of international markets, including China, Brazil, and the Middle East – along with weakening U.S. Gulf prices – have set the stage for downward movement at Tampa, observers said. Second-quarter negotiations are expected to begin in April.
Domestic refining capacity fell for the week, according to the U.S. Energy Information Administration (EIA). Refineries ran at 88.4 percent for the week ending March 18, a 0.6 percent decline from the previous week’s 89.0 percent and also below the year-ago 89.0 percent, but higher than the 85.8 percent five-year average.
The EIA also called average daily crude inputs lower. Inputs were logged as 15.820 million barrels/d for the week, 176,000 barrels/d lower than the 15.996 million barrels/d quoted at last report.
U.S. Gulf: Last-done on the Gulf formed sulfur market continued to be called in the $70-$75/mt FOB range, although some market players predicted near-term softening.
“Brazil has traded $81/mt CFR, and is now pushing for $70s/mt CFR,” one source said, leaving likely Gulf netbacks in the $60s/mt FOB for the next round of business.
Vancouver: A drop in China CFR prices last week will probably trickle down to Vancouver in the near future, sources said. Vancouver-equivalent sales have yet to conclude at China’s new reported $80-$90/mt CFR level, however, which is down from $85-$90/mt CFR at last report.
Last-done Vancouver spot was called in the $75-$85/mt FOB range. Alberta pricing continued at (-)$27-$60/mt FOB.
West Coast: West Coast prills were unchanged at $70-$80/mt FOB for the week, but a further softening Chinese market led sources to forecast lower prices in the next round of business.
West Coast molten contracts were $65-$115/lt FOB for the first quarter. Mirroring Tampa’s speculated decline, sources predicted a $20/lt drop in second-quarter pricing.
ADNOC: The Abu Dhabi National Oil Co. set March pricing at $88/mt FOB Ruwais, a $17/mt FOB dip from the February price of $105/mt FOB.
UAE state-owned Etihad Rail announced that its fledgling rail line has transported more than 5 million mt of solid sulfur from production units in Shah and Habshan to the port of Ruwais since operations began in 2014. At full capacity, the line is expected to boast an annual sulfur freight capacity of 7 million mt.
Aramco: Saudi Aramco cargoes for April were offered at $85/mt FOB Jubail. The March price was $90/mt FOB.
Tasweeq: The official March price of sulfur produced by Qatar’s Tasweeq was $87/mt FOB Ras Laffan, $2/mt below the February price of $89/mt FOB. An updated price is expected on April 1.
India: The Indian government is raising the subsidy for sulfur for the upcoming fiscal year, moving from Rs1,677/mt (US$25/mt) to Rs2,044/mt (US$31/mt).
The increase was put off to reports that the government wants to encourage more DAP production in the country. It is already using subsidies to encourage companies to build new urea production rather than increase the subsidy for individual urea sales. Sources said the increase in the sulfur subsidy could help DAP producers step up their production.