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Sulphur 412 May-Jun 2024

31 May 2024

Market Outlook

Market Outlook

Historical price trends $/tonne

SULPHUR

  • 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.
  • Molten sulphur availability in Europe is set to remain tight throughout the year due to decreased European production, despite weakness in the downstream caprolactam sector. Lower production is partly the result of increasingly sweeter crude feedstocks being used by refineries as Red Sea logistics issues and a ban on crude imports from Russia limit the availability of sour inputs. In addition, availability from the Grossenkneten gas fields in Germany is expected to continue decreasing year on year as reserves are depleted.
  • Chinese DAP producers attempted to intervene to stem the flow of price declines this week by setting a price floor of $530/t f.o.b. Still, offers are already indicated at this level, and traders continue to offer short in Indian DAP tenders. Further declines across most markets seem likely in the weeks ahead.
  • Outlook: the market tone appears to be turning less bullish, with many traders pegging high-end prices lower and most less certain of potential price rises. Some market participants are concerned that weakness in phosphate markets may lead to weaker production and therefore lower demand for sulphur. Phosphate production rates in China have already been cut over the past week.

SULPHURIC ACID

  • Global spot sulphuric acid prices are likely to remain relatively firm over the coming weeks. European smelter maintenance, along with strong Moroccan demand, will add support to some benchmarks. Morocco’s imports of sulphuric acid for January-February 2024 jumped to 385,260 t from only 63,439 t a year earlier, according to data via Global Trade Tracker (GTT). China was the lead supplier over the two months with 92,549 t, followed by Bulgaria with 75,606 t and Turkey with 58,173 t.
  • Downstream production rates remain relatively weak overall and domestic production is increasing in some key import markets. Affordability relative to downstream markets is broadly acceptable, but is the worst it has been for some time and looks particularly bad when compared with upstream sulphur.
  • Given current c.fr prices in key import destinations along with current freight rates, netbacks above the $10s/t f.o.b. on Far East supply appear challenging to most destinations aside from North Africa. Latest business to key import markets such as Indonesia and India net back well below this, while spot demand from Chile is non-existent. There is also little potential for upside in c.fr prices in these markets, as domestic availability in India and Indonesia is growing, while acid affordability is an issue.

Latest in Outlook & Reviews

Running the gamut

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.