The sulphur market in China showcased stability in its trend after witnessing a month of elevated pricing levels. The market was very active over the last month due to tight internal supply levels driving sulphur prices up, the increase in trading activity, and a cautious stance about imports. Furthermore, phosphate production rates remained stable this week, but uncertainty remains regarding larger export levels in the future.
During the week ending on August 22, the Chinese sulphur market is changing into a new phase of stability. The higher price level is still maintained as a result of the previous market surge, supporting the strong rally for the last four-week period. Therefore, the overall market sentiment of sulphur is bullish. The current prices of sulphur are attributed to a combination of supply stability and trading activity being done within the market.
Furthermore, the river market trades being done on August 14 suggest the active trades were done in line with the assessed range. Furthermore, Dalian remained active, as on August 12, a 6000 tonne vessel was awarded, and another spot tender was finalised on August 14. These continuous transactions showcased consistent demand for sulphur from the northern refineries. Moreover, a slight surge was witnessed in the port stocks – on August 7, the stocks increased from 2.46 million tonnes to 2.49 million tonnes, reflecting a slight ease in the supply constraints, but it was not sufficient to reverse the bullish tone.
Domestic bids for sulphur have increased, which was driven by the competition from the Indonesian suppliers, along with the increased internal trading activities. However, most of the end-users are showcasing hesitancy to commit transactions at current price levels, reflecting limited exports and the presence of ample inventory levels of sulphur. Therefore, all sulphur participants in the market now wait for signals to come from the upcoming meeting in August of Long Jiang, for the domestic event where buyers and suppliers will meet, fill and negotiate what the larger future context shall look like in the price behaviour and production.
In addition, the production run rates for phosphates remained steady at 55-60% - unchanged from the previous week. The rates remained unchanged as producers are waiting for further clarity on the export allocation volumes for Mono-ammonium phosphate (MAP) and diammonium phosphate (DAP) for the upcoming September – October period. This cautiousness reflects the ongoing market uncertainty amid the fertiliser export landscape.
As per ChemAnalyst, with the sulphur market holding firm at the higher end, attention now turns to the upcoming Shanghai conference. The event is expected to provide clearer direction through direct negotiations and policy discussions. Until then, the sulphur market is likely to remain in a holding pattern, supported by strong fundamentals but tempered by cautious sentiment and strategic decision-making.
