Global Sulphur Prices Take a Dip as Destocking Trends Impact Market

Abu Dhabi, UAE: Sulphur prices showcase an overall downward trend in the Middle Eastern market. In the same manner, the price of the commodity remains stable in the US market. In terms of its upstream market, the prices for crude oil are declining, supporting the price trend of Sulphur by decreasing the overall production cost of the commodity. Further, the ample inventories with lackluster demand for Sulphur from the downstream Agrochemical enterprises kept the consumption of the existing product inventories at a slower rate. One of the major factors for the declining price trend of Sulphur is the destocking in December 2023. Traders provided discounts on their prices of Sulphur to clear out their existing inventories for the upcoming fresh stocks, even at the cost of squeezing their profit margins and facing loss.

In the UAE, the prices of Sulphur are following a downward trend after remaining stable for a few weeks and settling at USD 85/MT (FOB-Abu Dhabi) as of the first week of December. Since the cost of its feedstock, crude oil showcased continuous weakness in its pricing with the reduction in energy cost, and the overall production cost for Sulphur has been decreased. In response to the prevailing market conditions, suppliers opted to reduce their Sulphur prices and encouraged buyers to increase their procurement. In light of the bearish market conditions, producers restricted the production rate of Sulphur to prevent an excess supply of the product. However, trading activities from the UAE to Morocco are done constantly due to moderate demand for Sulphur from the downstream Agrochemical enterprises.

At the same time, the price trend of Sulphur in the US market remains stable as of the previous week. Despite the decline in its upstream crude oil market, the demand from the downstream Agrochemical enterprises is moderate, and the supply chain is running smoothly. Producers have chosen to sustain a steady production rate in reaction to restrained demand from the downstream agrochemical sector. This choice is intended to maintain an equilibrium between trade and market demand. Additionally, the ongoing necessity to replenish storage units with Sulphur persists due to the consistent consumption of the commodity. On the buyer's side, purchasing activities are sustained to fulfill the demand from the downstream agrochemical sectors. All the factors mentioned above contribute to Sulphur's stable market conditions.

As per ChemAnalyst, it is anticipated that the price of Sulphur may showcase a decline in the upcoming weeks along with its feedstock. Due to the destocking in December 2023, the traders might lower their prices to clear their existing stocks for the fresh stock in January 2024. This might enhance the trading activities among the significant traders.