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 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.
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 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.
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.
Market Intelligence Price Indications Table 1: Recent sulphur prices, major markets
A softer trend in DAP prices, linked to lower operating rates in China and declining demand, is contributing to falling sulphur prices.
New supply is weighing on the market. In addition to increased exports in the second half of the year from upgrades and new refining projects from the Middle East, crushed lump sulphur is also again entering the market in higher quantities from both the FSU and the Middle East, and displacing granular product in some markets, notably Morocco and China.