The bearish Sulphur Market Trend Persists Amid the Weak Agrochemical Sector
The bearish Sulphur Market Trend Persists Amid the Weak Agrochemical Sector

The bearish Sulphur Market Trend Persists Amid the Weak Agrochemical Sector

  • 20-Feb-2024 4:05 PM
  • Journalist: Robert Hume

Abu Dhabi, UAE: In the global market, Sulphur prices persist in a bearish trend, largely influenced by the ongoing downturn in the Agrochemical sector. With decreased demand from this sector, Sulphur consumption rates have declined, leading to an accumulation of inventory levels. Consequently, traders are opting to sell their stocks at reduced prices to mitigate losses and prevent prodcution loss. This indicates a weakened demand from downstream Agrochemical industries, alongside a buildup of inventory in storage facilities. Regional producers also revised their Sulphur prices, driven by slow purchasing and declining demand for new stock.

In the Middle Eastern market, Sulphur prices have seen a decline, reaching USD 69/MT (FOB-Abu Dhabi) by the week ending on February 16th, 2024, despite the upsurge in Crude Oil prices, its upstream counterpart. This increase in Sulphur prices is contributing to rising production costs. The main factor behind this price decrease is the sluggish demand from downstream sectors, coupled with significant inventory levels. Additionally, trading activities from the UAE and Qatar markets to overseas markets are diminishing due to the global downturn in the Agrochemical market.

Moreover, the attack on the Red Sea by Yemen-based Houthi militants prompted traders to redirect their ships from the Red Sea to the Cape of Good Hope, aiming to prevent potential losses of goods and potential increases in insurance fees resulting from disruptions. Despite the rise in freight charges, Sulphur prices are decreasing due to reduced consumption rates. Consequently, market participants are reducing their quotations to deplete existing inventory levels.

Likewise, in the US market, Sulphur prices remain steady at a lower level, primarily due to lackluster demand from the downstream Agrochemical sector and abundant inventory levels. As a result, both trading activities and production rates are being curtailed by traders and producers. On the upstream front, the escalating prices of Crude Oil are driving up the operational costs of Sulphur. Regarding the spread, the gap between Crude Oil and Sulphur prices is narrowing, indicating a bearish market outlook for the product. Spot Sulphur values fell amid discussion of weaker demand and healthy levels of supply in the market.

As per ChemAnalyst, the prices of Sulphur are anticipated to decline further due to the expectation of the continued weak Agrochemical sector. However, even after lowering the quotations, the procurement activities from the buyer end are declining as they are restricting their purchasing activity and have currently opted for on-demand procurement activities. Therefore, it is expected that the prices of Sulphur might fall further.

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