Summary of the sulfur market and trends in January and February 2016

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Weekly Sulfur Review: Prices Continue to Fall Author/Source: Date: 2016-01-19 Clicks: 1 Last week (January 11–17), sulfur prices at domestic refineries continued to decline. Weak demand from end-users, along with some small and medium-sized enterprises shutting down ahead of schedule, led to high inventory levels at refineries, which in turn hindered sales and put pressure on prices. The overall drop in prices was around 50–80 yuan per ton. Prices at Puguang improved, while those at Wanzhou Port remained stable at 950 yuan; inventory there dropped to 47,000 tons. Prices in Dazhou fell to 900 yuan, with inventory amounting to 80,000 tons. Port inventories remain at a moderate level, and traders are pessimistic; they have little willingness to sell at low prices, which results in weak trading activity. The price at the Yangtze River port is **930–940 yuan per ton, while the price at the Qingdao port has dropped to 1000 yuan per ton. Due to lack of confidence in the market outlook, traders want to reduce their inventory levels by offering discounts, leading to a low level of inquiries in the market. 　　Main domestic sulfur prices: Solid sulfur in the Northeast region ranges from 750–920 yuan per ton, while liquid sulfur costs 780–920 yuan per ton ； North China solid sulfur: 950–1,090 yuan per ton; liquid sulfur: 920–990 yuan per ton ； Yanjiang solid sulfur: 900-940 yuan/ton ； In Shandong, solid sulfur is priced at 920–1,050 yuan per ton, while liquid sulfur costs 920–1,000 yuan per ton ； Huadong solid sulfonate: 890–1,030 yuan per ton; liquid sulfonate: 870–980 yuan per ton ； South China: Solid sulfur at 970–1170 yuan/ton ； Southwest solid sulfonate costs 900–950 yuan per ton, while Northwest solid sulfonate costs 700–880 yuan per ton.

Sulfur: The sluggish market trend persists Author/Source: Date: 2016-02-16 Clicks: 1 [Port Sulfur Updates] Report dated February 15, 2016: The sluggish market trend continues. 　　Today, prices at major domestic refineries generally declined, though by varying degrees. Sinopec Puguang Wanzhou Port applies a selling price of 840 yuan per ton, a reduction of 30 yuan per ton; the inventory amount is 33,000 tons. At the factory site, the selling price is 870 yuan per ton, with inventory amounts to over 60,000 tons. 　　Regarding ports: The market at Qingdao Port continued to show a calm trend ahead of the holiday today. The reference price for small packets and granules in the port is 820 yuan per ton, while there is currently no practical reference price for lump powders. The low price of locally produced sulfur means that there is little demand for sulfur at the ports; merchants prefer to wait and observe rather than offer quotes, so the market situation is likely to remain sluggish in the near future. 　　Today, market prices at the Yangtze River Port are fluctuating weakly; the reference price for granules is around 840 yuan per ton, while there is no practical reference value for lump and powder products. The lack of inquiries from genuine buyers in the port has made merchants reluctant to submit offers. Meanwhile, the actual purchasing intentions of price seekers remain unclear. Despite the weak market conditions, overall port inventories have shown an upward trend: inventories at Nantong Port have risen to 465,000 tons, while those at Zhenjiang Port remain between 150,000 and 160,000 tons. 　　The market in Fangchenggang is fairly average today; the price of granular material in the port is 930 yuan per ton, while the price of lumped powder is around 880 yuan per ton. Trading remains sluggish with no sign of improvement, and there are no substantial changes in the market trend. The current level of stock in Hong Kong is 530,000 tons, which represents a significant increase compared to the period before the festival. 　　Analysts believe that after the holiday, the domestic sulfur market will remain sluggish. In some regions, major refineries are likely to adopt a downward pricing trend. Today, the price of sulfur in Wanzhou dropped by 30 yuan per ton to 840 yuan per ton. It is reported that prices in the production areas are also expected to be reduced by another 30 yuan per ton tomorrow. However, there has been no significant response from downstream buyers. Inquiries at ports have been scarce; most of those who did inquire were merely seeking price information. Their actual intention to purchase remains questionable. As a result, merchants at the Yangtze River Port are reluctant to make proactive quotes; the price for these particles is estimated to be 840 yuan per ton, and some traders doubt whether it will be possible to sell goods at this price. Qingdao Port continued to show a calm trend ahead of the holiday; the low price of sulfur produced locally meant that there was little interest in it at the port. Retail buyers approached purchases in a tentative manner, with no clear intention to buy. In terms of the electronic trading platform, a clear downward trend is evident, indicating that market sentiment remains pessimistic. Additionally, port inventories continue to rise. According to Longzhong data, total port inventories have now reached 1.515 million tons. Although there have been no recent instances of a large influx of supplies at ports, it will still take some time for these inventories to be depleted. It is anticipated that the market will remain in a weak state in the near future. 　　【Downstream Product Market Trends】 Sulfuric acid: At the beginning of the week, the domestic sulfuric acid market was in a weak state. During the Spring Festival holiday, some sulfuric acid manufacturers in Shandong region shut down for maintenance, which led to a consumption of some of the inventory on hand at these plants and reduced pressure on them. Currently, there is a slight upward trend in the acid value, but due to the unfavorable overall market conditions, payments will be made more slowly after the holiday ends. This slight increase does not indicate an improvement in demand from downstream users; it is still necessary to pay attention to actual demand levels before making any decisions. Scattered manufacturers in Jiangsu region have resumed normal production. In the Henan region, some transaction prices continue to decline. The major manufacturers in Hubei region plan to carry out equipment maintenance next month. At present, most manufacturers are constrained by restrictions on production on the downstream side, and industry insiders are not optimistic about the market in the future; for now, a wait-and-see attitude prevails. The upstream sulfur market continued to decline, with Puguang’s price dropping by 30 yuan to 840 yuan per ton ； The downstream phosphatic ammonium market remained weak ahead of the holiday, operating at low levels. It is expected that the domestic sulfuric acid market will remain weak in the short term. Longzhong’s forecast: The domestic sulfuric acid market is expected to remain weak overall; local fluctuations do not reflect the overall demand level. With the upstream and downstream markets remaining sluggish and lacking supportive factors, manufacturers are adopting a wait-and-see attitude after the holiday; there will be no significant increase in prices or trading activity in the short term, and it is expected that the status quo will prevail for now. 　　Phosphatic ammonium: The domestic phosphatic ammonium market remained weak at low levels today. The reason for the weak market recently is that after the Spring Festival, the domestic market began to operate again; some companies resumed normal production, while others adopted temporary pricing strategies and focused on fulfilling orders received in advance. Overall, trading activity in the market has been sluggish ； Downstream distributors are largely immersed in the festive atmosphere and have not yet responded to market changes; consequently, the volume of new orders remains low. It is reported that some traders in Shandong remain cautious, planning to wait until around the 15th day of the first lunar month, when companies submit their quotes, before considering normal purchases. After the Spring Festival, market activity has been weak; the market has not yet fully picked up, and a cautious attitude prevails. It is expected that there will be no signs of improvement in the market in the near term ； As agricultural demand or the raw material market gradually picks up, the phosphate ammonium market is likely to see appropriate adjustments.

Sulfur: Weak market performance due to demand constraints Author/Source: Date: 2016-03-02 Clicks: 1 [Port Sulfur Updates] Report dated February 29, 2016: The market remains weak due to demand constraints. 　　On the side of Sinopec, the prices at its main refineries continued to decline this month, with drops ranging generally around 100-150 yuan per ton. At Puguang Wanzhou Port, the current selling price is 840 yuan per ton, representing a overall reduction of 90 yuan per ton; the current inventory amounts to 51,000 tons. At the plant site, the current price is 840 yuan per ton, a decrease of 60 yuan per ton overall. The daily production volume has now dropped to around 3,000 tons per day, and inventory levels are also below 40,000 tons. Additionally, there is a maintenance schedule scheduled for March. Reportedly, the maintenance is set to begin on March 20 and continue until April 28, lasting a total of 38 days. 　　Regarding ports: The downward trend in the market at Qingdao Port continued this month. As the Spring Festival approaches, the market is affected by bearish sentiment, leading to weaker purchasing enthusiasm among end-users. Businesses are also reluctant to take any action, resulting in a relatively quiet atmosphere in the market. The price of pink sandalwood has dropped below the \"900 mark,\" forcing some traders to close down early and take holidays. The market atmosphere did not show any improvement after the holiday; due to the low prices of locally produced crude oil, there was little demand for resources available in the port, while downstream players adopted a cautious attitude, leaving the market without any meaningful reference prices. Over time, there has been an increase in downstream demand for procurement. In particular, after some major manufacturers got involved, the market sentiment improved somewhat. However, at this point, it became difficult for port-side resource prices to stay above the “800” mark; the downward trend in prices proved hard to reverse. The price of lump ore has largely adjusted to around 750 yuan per ton. Meanwhile, some major manufacturers managed to conclude transactions involving thousands of tons at a low price of 720 yuan per ton. This temporarily had a negative impact on market sentiment. Nevertheless, given that sellers offered such low prices merely to alleviate their own financial pressures, these low prices are not representative of the overall market situation. Additionally, numerous industry conferences are set to be held soon; as a result, most merchants have no intention of selling at low prices, and the market trend shows a state of consolidation at lower levels. 　　This month, the port market along the Yangtze River continued its overall downward trend. In the initial period, both Qatar and the UAE saw a decline in their official prices in February; Qatar’s price in RMB terms was around 820 yuan per ton, which had a significant impact on market sentiment at the ports. Additionally, prices in Guoguang Wan Zhou in China also continued to fall, along with corresponding discounts, further exacerbating the bearish sentiment at the ports. As a result, the negotiation prices for these particles dropped to around 860–870 yuan per ton. Subsequently, Saudi Arabia announced an official price of $90 per ton FOB in March, a decrease of $25 compared to the previous month. As a result, there were few buyer inquiries at the ports, and suppliers did not take any significant action; waiting and seeing continued to be the dominant trend in the market, with particle prices adjusting to around 840 yuan per ton. In the period that followed, continuous offers at low prices from suppliers disrupted market sentiment. Those holding inventory were generally unwilling to make significant adjustments in their sales volumes, resulting in a somewhat stagnant market. Towards the end of the month, some downstream factories began to place orders based on their needs, but this wave of demand was short-lived and relatively weak, preventing the market from rebounding; as a result, the market remained in a state of fluctuation at low levels. 　　In Fangchenggang, the downward trend in the market has continued this month. Affected by the weak performance of the overall market, prices in the region have kept falling, with the price of granules dropping to 850 yuan per ton at present, while the price of block powder has been adjusted to 800 yuan per ton. In terms of inventory levels, the factory continued to receive supplies this month, and coupled with the low volume of goods being sent back, inventory levels remained at relatively high levels with some fluctuations. There are currently 547,000 tons in the port. 　　Analysts believe that the domestic sulfur market remains weak overall this month, continuing its previous downward trend. Its weak performance remains driven by declines in overseas markets and slow demand recovery. On the international market side, the official prices in Qatar and the UAE both showed a downward trend in February. In particular, Qatar’s official price dropped by 30 dollars to 89 dollars per ton FOB; its price in RMB terms was around 820 yuan per ton. This price level had a significant impact on the sentiment in the port market, resulting in little willingness among downstream end-users to purchase goods. Subsequently, Saudi Arabia announced its official price for March at $90 per ton on an FOB basis, a decrease of $25 month-on-month. This has made it unlikely for bearish sentiment in the market to improve. By the end of the month, although prices on the international market showed a slight upward trend, their impact on the domestic market was limited. On the demand side, the downstream phosphate fertilizer market has remained weak. With limited new orders for phosphate fertilizer plants, domestic shipments have been continuously hindered. As the market conditions show no signs of improvement, operating rates remain low, thereby prolonging the time required to deplete inventories of raw material sulfur. Furthermore, large companies continue to obtain raw materials from external sources; they focus most of their efforts on transporting these resources back, and thus have little interest in the spot market. Meanwhile, for other small and medium-sized enterprise end-users, against the backdrop of a generally bearish market sentiment, their willingness to purchase remains relatively low. Additionally, a few instances of aggressive price bargaining have slowed down the negotiation process in the sulfur market, resulting in a naturally weak market performance. At present, the previous practice of downstream factories making purchases on demand has not managed to create a more moderate market environment, and the next wave of demand growth is difficult to predict for now. Moreover, the weak trend in the downstream phosphate fertilizer market is likely to continue for some time, which makes it hard to find support in terms of demand. As for the external market, it still needs to be watched; if no significant positive factors emerge, it is expected that the weak and volatile trend in China’s sulfur market will continue next month. 　　【Downstream Product Market Trends】 Sulfuric acid: The domestic sulfuric acid market remained **overall this month, with prices in some areas experiencing slight fluctuations. After the holiday break, most manufacturers have completed their maintenance work and resumed normal production, with the market showing fluctuations and consolidation. The reasons are roughly as follows: First, the upstream sulfur market has remained weak and on a downward trend, with prices mostly staying stable, and manufacturers are adopting a cautious attitude ； II. The domestic spring plowing market is starting slowly, resulting in increased inventory pressure for phosphate ammonium products downstream. Downstream, compound fertilizers containing monoammonium are purchased as needed, resulting in relatively low actual transaction prices; there is insufficient demand for diammonium domestically, leading to weak market activity ； III. On the one hand, manufacturers began operations again after the holiday; prices remained largely stable. Inventory pressure increased in certain areas, resulting in limited actual sales, and some manufacturers reduced the acid value of their products ； On the other hand, demand from a few manufacturers remains decent with stable orders; moreover, maintenance work in certain areas has not yet been completed, so plans to resume operations have not been finalized. This provides positive support for the sulfuric acid market, leading to a slight increase in its price, with the most noticeable increases observed in the East China and Inner Mongolia regions. Therefore, the acid market as a whole is mainly in a state of sideways consolidation, with fluctuations occurring in some areas. As of the end of February, the mainstream reference prices for acid in various regions of China were as follows: 1–180 yuan/ton in North China, 150–260 yuan/ton in Northeast China, 30–230 yuan/ton in East China, 60–270 yuan/ton in Shandong, 60–290 yuan/ton in South China, 180–270 yuan/ton in Southwest China, and 70–180 yuan/ton in Northwest China. Longzhong’s forecast: The cold weather will persist into February, and there is still insufficient positive momentum in the sulfuric acid market. Although spring plowing after the holidays could boost demand to some extent, the driving force behind this is limited and the progress will be slow; as a result, manufacturers remain cautious. In the short term, the domestic sulfuric acid market is expected to remain largely range-bound, with only minor fluctuations up and down. 　　Phosphoric ammonium: The domestic phosphoric ammonium market remained weak this month. The main reason for the sluggish market is that this month falls during the Spring Festival, during which many downstream industries are closed, resulting in continued low demand. In some areas of the monoammonium market, the actual transaction prices dropped by around 50 yuan per ton compared to last month ； Downstream demand is weak, with few new orders being placed, resulting in considerable inventory pressure for factories. The overall transaction volume in the diammonium market is low. Some factories that stopped production for maintenance before the New Year remain cautious due to the relatively low actual prices in the market; they plan to adjust their production schedules based on future market demand, and there are no plans to resume operations at present ； It is reported that market supplies are concentrated in the hands of large distributors. The domestic spring plowing season has gotten off to a slow start, with grassroots buyers not yet placing any orders. Currently, industry players are largely bearish on future market prospects, and the weak market trend is expected to persist in the near term. Recent market demand has been weak, with the overall market showing a situation of supply exceeding demand ； Downstream distributors show little enthusiasm for purchasing, approaching transactions with caution and prudence, resulting in a sluggish trading atmosphere in the market ； The raw material market is showing a downward trend, with limited support from costs; there are no signs of improvement in the near term, and the market remains weak. Currently, demand for phosphatic ammonium is weak, and the raw material market is performing poorly with no positive factors to support it. It is expected that the situation regarding fertilizer preparation for spring planting in China may improve next month, but in the short term, prices will remain stable at low levels.