For the Quarter Ending September 2023
The price trend of Liquid Sulphur Dioxide in the North American market declined in the 3rd quarter ending on September 2023. The volatility in crude oil prices in the North American market has adversely affected the market value of Liquid Sulphur Dioxide, which is a downstream derivative of crude oil. The production costs for manufacturing Liquid Sulphur Dioxide have also significantly decreased, impacting the product's market value in the region. Due to the weak market situation, the consumption of the existing inventories in the storage units decreased. As a result of the adequate stocks in the storage units, the production rate of the commodity decreased, which made the suppliers decline their offers and bids to enhance their profit margins and to provide discounts on bulk purchases to the buyers. The demand for the product from the downstream food and beverages market was low, which was compensated by the existing inventories in the storage units with no need to restock the commodity.
During the 3rd quarter ending on September 2023, the price trend of Liquid Sulphur Dioxide plummeted due to the prices of its feedstock, that is, Sulphur, was also decreasing gradually and reached USD 228/MT (Ex-Ahmedabad). The demand from the downstream food and beverages market was also falling, leading to a drop in the price trend of the product. Due to the increase in the upstream crude oil enterprise, the transportation fuel has increased, adding up to the cost of the product, but less demand for the commodity still prevails, adding up to the existing inventories in the storage units. Supply of liquid sulphur dioxide was high as the cost of the feedstock remained on the lower end, providing a downward price trajectory. Furthermore, adequate inventories were present in the storage units in the market, resulting in an adequate supply of the commodity into the market. Additionally, due to the ample product availability in the market, the suppliers had to revise the prices of the products to clear their existing stocks.
In the European market, the price trend of Liquid Sulphur Dioxide declined in the third quarter ending on September 2023. However, the prices of the upstream Sulphur market were increasing, but due to the low demand from the downstream food and beverages market, a decline in the price trend was observed because of which producers decided to decrease the production rate of the commodity to avoid the oversupplies of the product. The decline in the price trend made the suppliers provide discounts to the buyers on the bulk purchases of the commodity to clear out the inventories for the fresh stocks, which turned out to be a great opportunity for the buyer to purchase the product at low prices. Since the demand from the domestic market was low, trading activities decreased as well, which led to the sufficient availability of vessels and containers, resulting in increased shipping capacity. Additionally, the price trend of crude oil was increased, but due to the low demand from the domestic market, the prices of the product as well as its feedstock declined.
For the Quarter Ending June 2023
During the second quarter of 2023, the North American market experienced volatility in crude oil prices, which had an adverse effect on the market value of Liquid Sulphur Dioxide, a downstream derivative of crude oil. The decline in the market value of Liquid Sulphur Dioxide was primarily due to the reduced production costs associated with manufacturing this product, which resulted in a corresponding drop in its worth in the region, as noted by traders. Moreover, the inventory levels of Liquid Sulphur Dioxide fell drastically in the regional market, as indicated by trade data, which negatively impacted the market sentiment of various downstream industries such as textiles, paper, and pulp. As a result, the stock of feed materials, including Ammonium Bisulphate and Sulphuric Acid, increased, thereby affecting the market trade of Liquid Sulphur Dioxide based on regional data. The demand for Sulphur for the manufacturing of fertilizers decreased with increasing stocks of the products. The quotations of Sulphur were lower, as reported by the merchants, due to a decrease in the consumption of Sulphur based fertilizers.
The prices of Liquid Sulphur dioxide plunged in the Asian region at USD 30230/ton Ex-Ahmedabad in the Indian market during April as per data. The earnings for companies in the pharmaceutical industry have grown 17% per year over the last three years. Revenues for these companies have grown 11% per year. This means that more sales are being generated by these companies overall, and subsequently, their profits are increasing too. But due to sufficiently high inventories of the product with the traders and the merchants and a moderate supply chain situation, the market was balanced in the regional market. Along with a fall in the prices of feedstock Oleum and fluctuations in the global petrochemicals market, Crude Oil prices went plummeting. The PMI and CPI of the Indian market plunged by 57.8 and 4.25%, respectively, impacting the market sentiments. The freight charges depleted from the Asian market by 2% to the Mediterranean. Any changes in the downstream demand pattern of users who purchase and use Liquid SO2 can influence its price. The Fertilizers and Agricultural Chemicals are flat in the last 7 days, but Fertilizers and Chemicals Travancore has stood out, gaining 8.0%. As for the longer term, the industry is up 11% over the past 12 months. Looking forward, earnings are forecast to grow by 11% annually.
The market prices of Liqui Sulphur dioxide plummeted in the European region during the second quarter of 2023. The market price of Liquid Sulphur dioxide depleted in the European market with a fall in the production rate of the Sulphur based derivative. The supply chain conditions in the European market maintained a moderate status, while the shipments market remained stable. Additionally, the inventory level with regional traders was at a moderate level. The demand for paints and coatings from the downstream market plunged in the region due to higher consumption rates from the downstream market. Earnings in India were forecasted to decline, and the Indian Sulphur market witnessed reduced sales. The logistics industry has experienced a decline, resulting in a 12% decrease in the supply chain. This has directly impacted the inventory levels of Liquid Sulphur Dioxide for traders and merchants in the region. Additionally, investors have grown pessimistic about the European logistics industry, as they anticipate lower long-term growth rates compared to historical data.
Liquid Sulphur Dioxide prices in the North American region fell during the first quarter of 2023 due to weak market fundamentals. According to industry players, falling consumption in downstream industries such as food preservation, water treatment, and chemical manufacturing resulted in weak domestic demand, reducing demand pressure on the Liquid Sulphur Dioxide market. Despite a downturn in industrial activity, local suppliers maintained enough stocks thanks to a constant influx of cheaper imports from overseas markets. Sticky inflation, on the other hand, prompted the US Federal Reserve to boost interest rates, affecting consumer confidence and forcing dealers to make offtakes at lower margins.
Prices for Liquid Sulphur Dioxide remained volatile throughout the Asia-Pacific region during the first quarter of 2023. Prices initially fell due to weak market fundamentals, low-cost pressure from feedstock Sulphur, and abundant product supply in the region. In the mid-quarter, prices eventually increased following the end of the Lunar New Year holiday, as market participants replenished material available in the domestic market, anticipating a potential recovery in demand, particularly in industries such as chemicals and water treatment. However, there was a persistent indication of price bearishness in the last month of the quarter, backed by persistently lower downstream demand, increasing inventories among local merchants, and dropping feedstock costs.
During the first quarter of 2023, Liquid Sulphur Dioxide prices in the European region continued to follow a declining trajectory, as did market sentiments. On the heels of falling feedstock Sulphur prices, there was dwindling cost pressure across the product market. Domestic suppliers had sufficient supplies on hand as the slump in the manufacturing sector eased due to fading supply chain issues in the European market. However, demand for downstream chemicals such as sulfuric acid, sulfites, and dyes remained slow, with few new orders. Despite falling freight charges, overseas purchasers remained cautious about monitoring the short-term market prospects. As a result, several distributors were obliged to lower their pricing since market activity had not met expectations thus far.