Sulphur prices advanced further this week, with demand in Indonesia setting the global price trend, while appetite for sulphur diminished in China as the phosphate export window is now officially closed.
Global supply has been constrained over the past two months, with non-mainstream sources hampered by vessels unwilling to call at ports in Iran, rail capacity issues, depletion of stocks from Kazakhstan previously shipped via Ust-Luga, and granulation issues in Turkmenistan.
These supply bottlenecks have progressively eased but most recently global supply was affected by a reduction of Russian material available amid market chatter of a potential three- month sulphur export ban in Russia that has as of yet not materialised.
Prices in Indonesia reached levels of around $390/t CFR in at least one transaction although more were heard but could not be confirmed at the time of writing. Demand is expected to remain present with at least four cargoes to be transacted during November, according to market participants. The bullish sentiment has been exacerbated as some buyers in the country are understood to not have the import licenses required for a switch to sulphuric acid.
The frequency of imports into China has decreased particularly after the Golden Week celebrations. The phosphate export window is officially closed as of 15 October but atransaction at around $370/t CFR was reported although unverified. Still, offers of Middle East material have moved to within the newly published range.
In the Middle East, prices increased $25/t this week with a number of markets enquiring for material in the region. Constrained supply from Russia, FSU and non-mainstream sources have redirected demand towards the Middle East resulting in higher offers across delivered markets.
Offers into India have moved to $360-370/t CFR, but the latest transactions are understood to have taken place within the newly published range. Market sources expect prices to stay elevated through the fourth quarter, with the potential to soften only if additional supply enters the market towards year-end, according to market participants.
Canada had been instrumental in meeting Asian demand earlier in the year and had kept a certain parity to the Middle East. The price is bullish and likely to increase further in coming weeks, according to market participants, but this week's increases were more modest in comparison to those in the Middle East with the market more recently supplying material to Brazil and China while sales into Indonesia have been more limited.
Short-term outlook
Global sulphur prices are likely to retain a bullish sentiment in the coming weeks. Although demand in China is likely to decrease with the phosphate export window now closed, demand in Indonesia is expected to be present through the end of year while supply is also likely to remain constrained beyond the short-term.
