Sulfur: mid-term market can still be expected
2023/7/17
First, under the double increase of output and output, supply and demand have reached a new balance. The data shows that the cumulative domestic sulfur output from January to June was 5.2747 million tons, a year-on-year increase of 15.79%. From January to May, the import of sulfur was 3.4469 million tons, a year-on-year increase of 8.66%. Superimposed on the import volume in June, it is estimated that the sulfur import volume in the first half of the year will be around 4 million tons. The release of domestic production capacity and the increase in imports are the main reasons for the decline in the sulfur market. However, the data shows that the annual apparent consumption of sulfur in the country is between 18 million and 19 million tons. Based on the calculation of domestic production and import sources, combined with the analysis of the data at the end of June, it can be seen that the supply and demand have reached a new balance under the continuous decline in the market during the year. This will also effectively support the further stabilization of the sulfur market.
Second, as supply decreases and demand increases, the market may stop falling and stabilize. Judging from the short-term data, the domestic sulfur market showed a trend of decreasing supply and increasing demand in June. The comprehensive operating rate of domestic sulfur was 61.48%, a month-on-month decrease of 1.01%; the month's arrivals at major ports nationwide were 452,600 tons, a month-on-month decrease of 17.73%. At the same time, the operating rates of downstream products such as monoammonium phosphate, diammonium phosphate, and caprolactam were 42.5%, 54.2%, and 72%, respectively, with a month-on-month increase of 5.1%, 7.7%, and 1.6%. Demand is steady. According to comprehensive analysis, under the support of supply reduction and demand increase, the downward momentum of the sulfur market has basically been released. The price of sulfur in July is expected to stop falling and stabilize, but the possibility of a moderate rebound in low-price areas cannot be ruled out.
Third, as the atmosphere warms up, traders actively enter the market. At the beginning of July, survey data from more than 200 sulfur production enterprises, downstream enterprises and traders showed that 40% of the industry in June were bearish on the market. The empty ratio fell below 30%. This can be seen from the fact that major domestic refineries have successively raised their winning bid prices by 20-30 yuan since July 4 and traders actively participated in the bidding. While the market supply and demand are balanced and rigid demand is supported, the transaction atmosphere is also actively promoting the market. Stabilize.
On the whole, whether it is the technical aspect, the spot transaction situation, or the positive transaction atmosphere, it shows that the domestic sulfur market has fully released its downward momentum after nearly half a year of adjustment. Coupled with the expected growth of potential downstream demand, it is expected that the sulfur market is expected to stabilize at the bottom in the short term, and the mid-term market is still expected.
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