Sulfur Prices Plunged in China After Soaring Historic High in 2021
- 15-Dec-2021 7:09 PM
- Journalist: Nina Jiang
In November, the Sulphur movement in the domestic market was consolidated throughout the month, despite the offers at the spot market plunged drastically by 5,81% month-on-month. During November, domestic refineries across the mainland region maintained low inventory operations, operational loads at the downstream industries were dull, and imports were relatively smooth. In terms of the downstream demand, the offtakes from the fertilizers sector are currently witnessing an offseason ad the current training atmosphere is weak. Since November 2020 the imported offers of Sulphur have soared by 110% to a monthly average of USD 325 per tonne in November 2021. This surge in the quoted offers of Sulphur is attributed to numerous factors including, COVID-19 related disruption in the complete value chain, persistently soaring prices of freight vessels especially in the Asia-Pacific region, and the dual control norms imposed by the Chinese authorities to curb carbon emission and restrict power consumption ahead of the upcoming winter season.
The imposition of the dual control norms took a major toll on the domestic production output of Sulphur in China. The stricter implementation forced the numerous petrochemical and non-petrochemical industries to either curtail the operational load or temporarily shut down all operations to meet the emission target ruled out by the local authorities across the 32 provinces in China. During September and October, the heavy rainfall in Shanxi forced to shut down operations at 60 coal mines led to the extreme shortage of coal, and the Chinese authorities were uncertain to release the stocked LNG amidst the falling temperature. In repercussion, the situation worsened and ultimately resulted in power rationing across the Chinese provinces along with further pressuring the domestic supply.
As per ChemAnalyst, the current offers of Sulphur in the Chinese domestic market are moving in a downward trajectory after the continuous efforts made by the authorities to curb the power rationing. In addition, the demand from the downstream sector is likely to remain weak.