Thread Content
Poor supply and demand conditions continue to put pressure on the sulfur market. Author/Source: China Fertilizer Network Date: 11-12-2019 Clicks: 96. Recently, the domestic sulfur market has shown a downward trend. One of the main factors contributing to this pressure is the high levels of inventory at ports. According to data from Jinchuang, as of November 8th, the sulfur inventory at domestic ports was 2.348 million tons, an increase of 22,000 tons compared to early November, and more than 800,000 tons higher than the same period last year. Taking into account as well the shipment of 80,000–100,000 tons of bulk sulfur from Bandar Abbas in Iran at the beginning of November, which is destined for Zhenjiang Port or Fangchenggang Port in China, as well as a shipment of 33,000 tons of bagged sulfur destined for Fangchenggang Port in China, it can be seen that there is still an ample supply of sulfur for import into China. An analysis of the overall sulfur inventory at domestic ports this year shows that since mid-to-late July, the sulfur inventory at these ports has remained above 2.2 million tons, which has severely hindered expectations of a rebound in the domestic sulfur market. While the supply of sulfur is abundant, the international sulfur market continues to decline. Faced with a sluggish domestic sulfur market in China, the main suppliers of sulfur from the Middle East have set prices for November at around FOB 42.5–46 dollars per ton. The price of sulfur from Iran, which is a major source of supply for China, has even dropped to around FOB 30 dollars per ton. With the Federal Reserve initiating another round of interest rate cuts, the value of the yuan against the dollar has fallen significantly, resulting in lower costs for China’s sulfur imports. This has had a noticeable impact on the spot market at ports, prompting some suppliers to sell their stock at lower prices due to financial pressures. In particular, there are no signs of improvement in demand on the downstream side. The domestic autumn fertilization season has already ended, and the winter storage market is starting slowly. Meanwhile, faced with low-priced products from competitive countries such as Morocco and Saudi Arabia, the export prices of ammonium phosphate in China continue to decline. As of November 8th, the transaction price for ammonium diphosphate in China had dropped to $305–310 per ton FOB, a decrease of $5 per ton compared to the beginning of October, and around $100 per ton lower than the same period last year. As a result, ammonium phosphate manufacturers continue to opt for production restrictions in order to maintain prices, which in turn leads to a slow consumption of sulfur, the raw material used in its production. Faced with limited demand and a continuous decline in supply at ports, domestic sulfur producers are under increasing pressure to sell their products. Considering the commissioning of Zhejiang Petrochemical’s sulfur production facility by the end of the year, as well as the fact that Shuangshi Zhangjiagang Fine Chemicals, the largest domestic producer of sulfuric acid from sulfur, will be shut down for 50% of its capacity for maintenance, it has become common practice for domestic refineries to clear their inventories at lower prices in advance, further fueling bearish sentiment in the market. It is clear that, amid an overall poor supply and demand situation, the domestic sulfur market continues to experience a downward trend, with the prevailing market prices gradually moving toward the low levels seen in 2009.