Section: CRUSU Comment

Sulphur magazine has a new title - Sulphur+Sulphuric Acid - better reflecting the editorial focus and breadth of coverage.

The fragile ceasefire between the United States and Iran broke down at the start of July, just three weeks after the signing of the June memorandum of understanding, after Iran fired at several vessels who had failed to notify them of their transit of the Strait of Hormuz, and the US retaliated with a missile barrage. While the two month negotiation period it had specified to solve all of the outstanding issues between the two parties had always seemed over-ambitious, market participants had at least expected to have that grace period to arrange for new cargoes and tranship them through the Strait. Now that the ceasefire has ended early, markets are truly entering uncharted waters.

It is two months on from our previous issue, and almost none of the news has been good from sulphur and downstream markets. Only three sulphur cargoes are confirmed to have transited the Strait of Hormuz since the US and Israeli strikes on Iran began, all loaded at Ruwais, with destinations in India, Tanzania and Morocco, carrying a total of 160,000 tonnes. It is believed that a couple of Iranian vessels with a total of 75,000 tonnes may also have left covertly. But in spite of some Middle Eastern sulphur making its way to Saudi Red Sea ports or Duqm on Oman’s Indian Ocean coast, around 700,000 tonnes is still trapped on ships stranded in the Gulf, and coupled with production cuts in the region, it is estimated that over 1.2 million tonnes has so far been removed from the market.

The effective closure of the Straits of Hormuz by Iran in the wake of US and Israeli attacks has sent shockwaves through all markets, but sulphur has been particularly badly affected. While the Straits carry 22% of global phosphate exports and 35% of urea, for sulphur around 45% of the 39 million tonnes transported internationally every year must traverse the narrow waterway, with major suppliers like Abu Dhabi and Saudi Arabia relying upon it for their export cargoes.

The deficit in the sulphur market has led to a new focus on melting down and selling stockpiles of sulphur around the world. From Kazakhstan to Canada, stocks of sulphur have been shrinking.

Prices in sulphur markets have been climbing rapidly for several weeks now due to short supply, reaching their highest levels for early two and a half years, since July 2022. A major cause has been widening Ukrainian drone and missile strikes against Russian oil and gas facilities. In particular, drone strikes in September on the Astrakhan and Orenburg natural gas plants led to Russian sulphur exports being cut drastically, first from around 400,000 tonnes per month to only 100,000 tonnes in October, and then to zero from the 1st of November, as Russia implemented a ban on exports of sulphur used in fertilizer production which was projected to last at least until December 31st. “This decision will stabilise shipments of raw materials to the domestic market to maintain current mineral fertilizer production volumes and ensure the country’s food security,” the government’s press service reported. The restriction applies to the export of liquid, granulated, and lump sulphur. It remains to be seen whether exports of Kazakh material from Ust Luga will be affected, but some Kazakh sulphur is now being sold via Iran.

This issue of Sulphur magazine contains a preview of CRU’s Sulphur + Sulphuric Acid conference in Woodlands, Texas, which is being held from November 3rd to 5th this year, giving delegates the opportunity to meet and discuss some of the trends which are continuing to change the sulphur and sulphuric acid industries. Some of this is echoed in our editorial coverage this issue; the rise of electric vehicles and the continuing electrification of society is changing demand for metals and impacting upon both sulphur and sulphuric acid markets alike. As CRU’s principal analyst Peter Harrison discusses on pages 36-37, battery demand for nickel is leading to a surge in new nickel leaching capacity in Indonesia which is drawing in greatly increased volumes of sulphur, while rising demand for copper is leading to additional volumes of smelter acid from China, India and Indonesia which are impacting the merchant market for acid, as detailed by CRU’s Viviana Alvorado on pages 38-40. In the United States, new lithium mines will require additional sulphur (see pages 22-23). Rare earths and battery metal recovery will form a major topic on the first day of the Sulphur + Sulphuric Acid conference, with speakers from Lithium Americas, one of the pioneers of the new US lithium industry.

Phosphate prices have been at high levels for a couple of years now, and talk at the recent International Fertilizer Association (IFA) meeting in Monaco was that it was not only continuing to support higher sulphur prices in spite of oversupply in the sulphur market, but that there seemed to be no prospect of it falling in the short term.

I am writing this freshly returned from the Sulphur Institute’s annual Sulphur World Symposium in Florence (for more on that see pages 24-25), where one of the topics causing some excitement was the anticipated commissioning of a demonstration plant for Travertine Technologies’ new Travertine Process. The plant is due to be commissioned at the Sabin Metals site near Rochester, New York in mid-2025 at a cost of $10.7 million. Capacity is put at “hundreds” of tonnes per year of gypsum processed, and removing “tens” of tonnes per year of CO 2 from the atmosphere.

The past few weeks have seen sulphur prices spiking after a steady rise since 3Q 2024. At time of writing, delivered prices to a variety of locations were around $280/t c.fr, their highest level since mid-2022 when the price of commodities of all kinds jumped in the wake of the Russian invasion of Ukraine and subsequent sanctions. Steady buying from Indonesia and China, the two largest importers of sulphur, appears to have supported the market, in China’s case mainly for phosphate production as well as a variety of industrial processes, and in Indonesia’s case to feed the high pressure acid leach (HPAL) plants that are producing nickel for the battery and stainless steel industries. Although Chinese buying has dropped off slightly since Lunar New Year, and demand has also slackened in India, Indonesia’s appetite continues unabated, having tripled its nickel production since the start of the decade to become the world’s largest producer, representing 60% of global supply in 2024.