Section: CRUSU Market Intelligence

At the end of August, the Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat) tendered for 35,000 tonnes of sulphur for September loading from Ras Laffan, with offer prices reported at or around $130s/t f.o.b., according to market sources. Bids were received at multiple levels, with market participants initially anticipating awards around the mid-$120s/t f.o.b. The tender result was higher than market expectations and would equate to delivered prices to key Asian markets at $150-155/t c.fr. But prices in China and Indonesia remained lower this week at around $140-145/t c.fr, with India at $145-150/t c.fr. Prices have increased steeply since Muntajat’s 25 June session, which was indicated awarded in the mid-$80s/t f.o.b.. and Muntajat posted its Qatar Sulphur Price (QSP) for September at $125/t f.o.b., up $19/t from $106/t f.o.b. in August. This represents the highest QSP since March 2023 at $133/t f.o.b., and reflects delivered levels to China nearing $150/t c.fr at current freight rates. Tight supply and strong downstream demand have pushed tender prices higher. Muntajat tenders were previously awarded at $92/t f.o.b. in April, up from $88/t in March and the low $80s/t f.o.b. in February.

Sulphur prices are expected to recover from declines in May and June and continue climbing over the coming months, though good availability will limit upside.

Sulphur prices in China are expected to recover with downstream demand anticipated to surge in the second half of the year and good affordability to support raw materials purchasing. Chinese nitrogen, phosphate, and potash prices have surged, driven by heightened demand for the summer corn application season. In particular, average 11-44 MAP prices jumped 16% from $390/t ex-works to $463/t in Hubei province. However, sulphur prices have taken a while to follow the trend on phosphate prices. Port prices have fluctuated in the range of $126-130/t c.fr since late March, and import prices fell from a high of $112/t c.fr to $100/t c.fr, capped by high port inventory and sufficient supply. Port inventories in China remain around 2.8 million tonnes, well above the 2022 average of 1.4 million tonnes and the 2023 average of 2.07 million tonnes. These elevated stock levels limited the upside for prices in China and provided buyers with options. At the start of July, Sinopec’s Puguang, the largest sulphur producer in China, increased its sulphur sales prices at Wanzhou port up $4/t RMB980/t, while its factory price at Dazhou was up RMB20/t at RMB950/t ex-works. These prices are considerably down from RMB1,600/t in December 2022 and RMB 2,945/t from mid-June 2022 and are the lowest since July 2023, but are still up from a low of RMB605-655/t at the end of August 2020.

Sulphur benchmarks firmed around the globe in April. Although availability remains ample, downstream production is expected to rise in the weeks ahead and further upside for prices is expected, at least in the short term. Prices increased the Middle East, Indonesia, India, Brazil, and the Mediterranean. The Middle East spot price was assessed up an average $3/t at $83-88/t f.o.b. The previous low end of the range was no longer considered achievable. The price has climbed 27% since mid-February this year. The benchmark is down 53% from early December 2022, but had climbed 47% from the end of July 2023 to its mid-October average of $110/t f.o.b. before declines set in once again. Chinese buyers returned to the international spot market in late April following weeks of inactivity, lifting c.fr prices.

Downstream phosphate production is expected to climb, with further sulphur price recovery expected. Overall, global demand remains lacklustre as downstream demand has yet to increase substantially in key markets and sulphur availability from most origins is ample.

Sulphur prices reached a low point in mid-February, with buyers looking to the tender from Muntajat as well as the return of Chinese buyers following the Lunar New Year holiday for the direction that the market would turn. CMOC’s 5 February tender for 40,000 tonnes of sulphur for early-April arrival was indicated awarded in the upper $90s/t c.fr on supply from the FSU, though details were not confirmed.

CRU expects sulphur prices to be supressed in early 2024 by high port inventory and limited phosphate export business. However, affordability continues to support raw materials purchases and leaves room for price increases, especially if downstream production picks up as expected and sulphur stock drawdown slows.

Sulphur prices are expected to increase during H1 2024, reversing the trend of recent declines, though good availability will limit the upside to price gains in the short term. However, should fertilizer production prove weaker than expected, prices may remain below expected levels.

Sulphur prices declined in Q4 following the increases seen during Q3, because of ample availability and limited spot demand. One contributing factor was that phosphate fertilizer producers in China, the largest importer of sulphur, have cut downstream production due to increased export restrictions. In addition, high sulphur stocks at Chinese ports and continuing high domestic sulphur production mean that domestic buyers have other options aside from international purchases.

Volatility in sulphur prices has been reduced in the past year following the large price spike and subsequent drop in the summer of 2022. This price volatility has been due to various disrupted seasonal trends from the global pandemic, uneven recovery, geopolitical shifts and demand destruction for fertilizers.