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Sulphur 414 Sep-Oct 2024

30 September 2024

Market Outlook

Market Outlook

Historical price trends $/tonne

SULPHUR

Muntajat announced its QSP for September at $125/t f.o.b., an increase of $19/t from its August price. This was following its tender earlier this week, which market sources indicated to have achieved at or around $130s/t f.o.b. Over the past two weeks, KPC in Kuwait closed two sales tenders, with both indicated awarded in the high $120s/t f.o.b. Middle East spot f.o.b. prices are at their highest level since March 2023 and have climbed 58% over the past two months.

At the same time, Chinese delivered prices climbed slightly higher to $140145/t c.fr amid latest indications, while Indonesian prices remained unchanged in the range of $140-145/t c.fr this week.

Most traders remain confident of further price increases across the globe over the coming weeks due to strong downstream markets driving increasing demand, particularly given good affordability as phosphates prices continue to climb.

Nevertheless. good overall availability should limit the upside to prices, particularly as China stocks remain high, even though a rail strike in Canada as well as refinery maintenance in Kazakhstan may tighten availability a little.

SULPHURIC ACID

Global spot prices are likely to remain relatively firm over the coming weeks. Strong Moroccan offtake has added support to some benchmarks, with further support coming from Chile’s recent return and persistently strong offtake for Saudi Arabia. Domestic acid production is set to increase in some key import markets, though this is more weighted to later in the year. Affordability relative to downstream markets is broadly acceptable, but looks particularly bad when compared with upstream sulphur.

Chinese sulphur burners are setting prices in the traded market, while the lack of domestic smelter acid supply due to raw material shortages is also reducing export availability and pushing up prices. China requires high acid prices to draw out more volume, as domestic sales offer favourable pricing, thereby limiting the potential downside for spot business.

Production issues at smelters in Japan and South Korea has restricted spot tonnes. This has allowed sellers to resist lower bids. However, high freight rates, rising supply in other Asian countries and concerns over phosphate markets may weigh on prices.

In the longer term, growth in smelter acid production is being limited by a shortage of copper concentrate. new smelter capacity in Asia is expected to be commissioned, but tightness in the copper concentrate market will limit its operations in 2024. Increased competition and declining acid import requirements are expected to cut Chinese acid exports in 2025. Consistent traded demand and weaker European exports have maintained market tightness, which will delay price declines to 2025.

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.

Is the world ready for CBAM?

At the end of this year, the European Union’s Carbon Border Adjustment Mechanism (CBAM) will move from its transitional phase into its ‘definitive’ phase, whereby the carbon costs of goods entering the EU will need to be priced in. CBAM requires suppliers to calculate the carbon emissions of their fertilizer (and other, e.g. steel) products, including indirect emissions, for example from electricity consumed in the process, and emissions of precursor or raw materials. They will then need to purchase CBAM certificates to cover embedded emissions above the established free allowance benchmark rates determined by the European Commission: 1.57 tonnes CO2e/tonne ammonia and 0.23 tCO2e/t nitric acid.