LONDON (ICIS)--International sulphur prices remain under pressure from poor downstream demand from the phosphates, petrochemical and metals markets, sources said on Friday.

“All the downstream markets are weak and this is not helping sulphur. It’s all doom and gloom and there are a lot more bears than bulls,” said a sulphur producer.

A sombre mood continues to hang over the international sulphur market, with no sign of demand for phosphates improving in the near term. Invariably, activity was at a standstill in China because of the Lunar New Year holiday and also in Latin America where activity was muted because of Carnival.

The Fertilizer Institute (TFI) annual meeting in Orlando, Florida, also drew normally key active players in the Americas away from the market.

Invariably, spot prices in China were unchanged at $85-95/tonne CFR (cost and freight).

However, prices in India remained under pressure owing to poor downstream demand, high sulphur stocks and the recent price falls in China. A large buyer, who said it had no demand, valued spot sulphur at either side of $100/tonne CFR. For smaller customers a trader thought $105/tonne CFR was achievable.

“India there is nothing so far. $105/tonne is a number in the market. Now there are no purchases,'' a trader in India said.

“Maybe people are thinking it will come down further. Everybody is thinking it will come down again, but there are no numbers at all out of China this week. I would put India in a $100-105/tonne CFR range.”

The same trader said major buyers such as The Indian Farmers Fertiliser Cooperative Ltd (IFFCO) and Paradeep Phosphates Limited (PPL) were fully covered and both have planned maintenance in March.

The market was eagerly waiting for news of Saudi Aramco Trading’s March price which was announced late on 10 February at $90/tonne FOB Jubail, down $25/tonne from February. A reduction had been widely expected on the back of recent international falls and monthly price reductions by Middle East producers.

US sulphur buyer and major phosphate producer Mosaic's announcement late last week that it would be reducing phosphate production by 400,000 tonnes during the first quarter added to the woes of the market- Particularly since other producers were expected to follow Mosaic’s curtailment lead.

Sources were divided on whether the move would actually push phosphate prices up or prevent them from falling. How this will dent the sulphur market remains to be seen.

In North America, there was market talk that sulphur was offered in the $70s/tonne (free on board) FOB Vancouver, but this was dismissed by traders and indeed buyers. However, prices continued to dip, with the $80s/tonne FOB Vancouver mentioned by a large consumer.

“My few conversations with sulphur suppliers has indicated, I repeat indicated they were willing to work at price USD 80-85/tonne FOB. USD 70/tonne seems like a myth or a special situation,” said a major buyer of material sourced from North America.

For major importers in North Africa, Q4 contract finally closed, but a price between Abu Dhabi National Oil Company (ADNOC) and Office Cherifien des Phosphates (OCP) will not be disclosed.

In Europe, it was understood that some distressed cargoes had been offered, but buyers are fully covered with contract volumes.

The mood across the Mediterranean also remained downbeat, with prices under pressure from poor demand and plentiful offers. Sulphur was quoted at $85-100/tonne CFR Mediterranean.

Focus article by Julia Meehan