Middle-Eastern Sulphur Prices Continue to Weaken Amidst Ample Inventories

Abu Dhabi, UAE- Sulphur prices are following a downward trend in the Middle Eastern market after being stable for the previous few weeks. In the same manner, the prices of its feedstock, Crude Oil, showcased a bearish price trend, leading to a decrease in the production cost for Sulphur. Considering the market situation, the suppliers decreased their Sulphur prices and tried to persuade the buyers to enhance the market liquidity. However, the buyers controlled the uptake of the discounts on bulk stocks due to the sufficient existing stocks and low demand from the downstream Agrochemical ventures.

In the Middle Eastern market, the cost of Sulphur declined due to lackluster demand from the downstream Agrochemical and Rubber Vulcanisation industries and ample inventories in the storage units. Furthermore, the fall in the upstream Crude Oil enterprises supported the price trend of Sulphur. The bearish market situation made the producers reduce the operational rate due to existing stock, which was sufficient for the rising demand. High purchasing activities and the boost in the downstream market did not materialize, keeping the prices on the lower end.

Additionally, trading activities among the significant manufacturing industries experienced a decline due to the low amount of orders from the buyer's end. Exports from the United Arab Emirates (UAE) to Morocco were traded through the Suez Canal, where log jams hamper trade flows nowadays. As per the Canal's Managing Authority, the shipments through the Panama Canal have decreased due to low water levels, and traders have started using the Suez Canal as an alternative. Due to the log jams, there has been a delay in the shipment of the commodity. Still, since the demand for Sulphur from the downstream Agrochemical market is low, the situation is under control as the existing inventories compensate for the demand.

In the Chinese market, the prices of Sulphur witnessed a moderate demand from the domestic market, leading to a decrease in the trade between China and the UAE. This week, there were no major fluctuations in the supply/demand with moderate downstream Agrochemical market. No cost pressure was beared by the buyers to purchase the cargo, and the negotiable discounts for the bulk purchases. With the week ending on 10th Nov, the price of Sulphur in China stabilizes at USD 130/ton Ex-Shanghai.

According to  ChemAnalyst, the price trend of Sulphur is anticipated to showcase an inclination in the upcoming months with its feedstock, Crude Oil, along with an expected increase in the demand from the downstream Agrochemical and Rubber Vulcanisation enterprises. Furthermore, the Panama Canal's drought-like condition and the alternate use of the Suez Canal are anticipated to continue till February 2024, which may delay the shipment of the Sulphur.