Sulphur market: Concise review of 2016Posted On: 09-01-2017 By: Grahame Turnbull
By Meena Chauhan – Sulphur and Sulphuric Acid Research Manager
Global sulphur price developments were a major focus point for the market in 2016. Prices collapsed through the first six months of the year, down from highs of over US$115/tonne FOB Middle East to lows below US$70s/tonne FOB by August. This was driven by a weak processed phosphates market and the broader commodity downturn. The second half of the year showed a strong recovery, despite the lack of support from downstream markets. Sulphur prices climbed back up to over US$90/tonne FOB in December in the Middle East, leading delivered spot prices in China to three digits. Key factors driving the rise included the balance in global supply/demand, monthly price postings from the Middle East region and growing import demand in China and Morocco.
While global sulphur supply increased in 2016, up by around 5% year on year, demand also increased, leading to a relatively balanced market. Sulphur supply was expected to grow even further, with the start up of the delayed Barzan/Qatar project in October 2016. However, further setbacks emerged, delaying the project into 2017. This added support to an already buoyant market, as prices edged up further in the latter part of the year. We provide quarterly updates on global projects including the Middle East across both supply and demand in our sulphur services.
The rise of trade to China through the year coincided with a steep run up in sulphur inventories at the nine major ports, rising to over 1.8 million tonnes. While this is not significant in historical terms, this represented a shift from the average 1 million tonne stock level throughout 2015. China sulphur imports in January – November 2016 totalled 10.9 million tonnes, up by 2% on the previous year. Significant shifts were noted in sourcing, as the UAE increased its market share due to increased availability from the Shah gas project. At the same time, tonnes from Iran, Kazakhstan and Turkmenistan declined significantly, highlighting the changing trade pattern shifts in the market. In our latest Sulphur Market Dynamics Service quarterly release we present a spotlight report on global sulphur trade, including a look at the future of Chinese imports in light of rising domestic supply.
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