U.S. Insoluble Sulphur Prices Climb Amid Strong Demand, Short-Term Outlook Suggests Softening

Texas(USA): In September 2024, Insoluble Sulphur prices in the U.S. continued to rise, primarily driven by strong demand from the rubber industry, which is closely tied to the automotive sector. The expected increase in vehicle sales is supported by Perodua, a key market player, which has large order backlogs, as well as aggressive marketing from original equipment manufacturers (OEMs). However, vehicle sales in August showed a slower seasonally adjusted annual rate (SAAR) of 15.1 million, down from 15.3 million in July and lower than the 15.8 million rate from last year. This decline highlights ongoing uncertainties in the U.S. automotive market, particularly as dealers express concerns over election-related uncertainty, potential interest rate cuts, and inflation.

The U.S. manufacturing activities for August 2024 was observed to be going downward, signaling a slowdown in the manufacturing sector, which seems to have also affected the pricing situation of Insoluble Sulphur. Production dropped for the first time in seven months as demand weakened, and businesses reported fewer new orders. Additionally, companies scaled back their input needs, resulting in reduced employment due to excess capacity. This caused the first improvement in supplier lead times in three months. Despite these challenges, companies remain cautiously optimistic about future growth, with many expecting a demand rebound for multiple commodities including Insoluble Sulphur after the 2024 presidential election. Increased sales and marketing efforts are supporting this outlook, although confidence has slightly decreased.

Although there has been strong demand for Insoluble Sulphur in the automotive sector, overall performance in August did not meet expectations. Factory inventories of Insoluble Sulphur remain stable, and shipments are steady, but cautious buying behavior from traders and buyers, who are only making small, immediate purchases, has led to moderate market activity and lower transaction volumes.

In the near term, Insoluble Sulphur prices are expected to stay weak despite strong downstream demand. The robust trading environment is being tempered by limited follow-up purchases including Insoluble Sulphur. According to market sources, new vehicle sales in August 2024 increased both month-over-month and year-over-year, with an estimated 1.42 million units sold, approximately 7-8 percent higher than the previous year same month.

Looking ahead, ChemAnalyst predicts that Insoluble Sulphur prices may decline as manufacturing activities pick up. Additionally, inter-regional procurement is expected to slow down after the peak season, and potential increases in OPEC (Organization of the Petroleum Exporting Countries) crude oil output could lead to further price reductions in the coming weeks.