Fluctuations in Global Sulphur Market Amid Supply-Demand Imbalance and Geopolitical Challenges

Doha, Qatar: During this week, the Sulphur market is experiencing a fluctuating pattern in their trend due to the disturbed equilibrium between supply and demand. In Asian and North American regions, the Sulphur market is showcasing a stable price trend and Middle-Eastern regions are following a downward trend due to the ample inventory levels among the storage units.

In the Middle Eastern region, due to the ample inventory levels of Sulphur and lower demand from the domestic as well as the overseas downstream Agrochemical sector, the market faced a bearish scenario. Despite the disruption in the Red Sea, the prices of Sulphur are showcasing a declining trend. The limited number of ships using the Red Sea route remains at risk, as highlighted last week by shipping line Maersk, which reported an increase in attacks and an expansion of the risk zone. Maersk announced it would continue redirecting its ships around Africa for the foreseeable future, resulting in a 20% reduction in capacity for the second quarter and increased costs. Despite this, the prices of Sulphur declined, as traders stocked up inventories for the anticipated demand from the downstream Agrochemicals sector, however, the supplies of Sulphur subdued the demand and therefore, the supply chain was disrupted and resulted in a bearish market scenario. In Qatar, the Sulphur market declined by 2.29% and reached USD 85/MT (FOB-Doha).

The Middle East export market faced challenges as its primary importing nation was closed for five days. During China's Labor Day holidays, market closures led to decreased operations and reduced demand from the downstream agrochemical sector, resulting in lower trading activity for Sulphur. However, Chinese traders had anticipated the post-holiday demand and prepared accordingly. Consequently, upon returning to the market, ample supplies are now available, impacting the export market of the Middle Eastern regions.

Currently, the Sulphur market in the US and Singapore are maintaining the same prices as the previous week. The US market is grappling with high inflation and the potential Canadian National Railway Strike, which is disrupting the supply chain. The Canadian government has delayed the start of a possible strike by workers at the Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC). Last week, workers represented by the Teamsters union voted overwhelmingly to strike as early as May 22. In response, market players are taking precautionary measures and therefore stocked up on inventories for Sulphur to prevent a bullish market scenario. Consequently, US buyers have reduced their offtake volumes from Canada by rail due to weaker domestic demand for Sulphur and sufficient local availability.

Similarly, due to the ample inventories of Sulphur and moderate demand from the downstream Agrochemical sector, the Singapore Sulphur market showcases a stable trend, this week. However, the production cost of Sulphur declined due to the declining pattern of the upstream Crude Oil market. Considering the sufficient inventory levels and moderate, the buyers limit their trade inflows from the Qatar market to prevent the disruption in supply-demand equilibrium. Therefore, regarding the spread, the difference between Sulphur and Crude Oil remained the same signalling a stable market scenario.

According to ChemAnalyst, the Sulphur market is likely to experience downward pressure on prices in the coming weeks due to weaker demand from downstream agrochemical enterprises, which may lead to an increased consumption rate of the commodity. Conversely, in the US market, a potential Canadian National Rail strike could disrupt the supply chain, potentially creating a bullish market scenario for Sulphur.