Tampa sulfur price hits record $705 as critical Gulf shortage bites

The Tampa sulfur price for third-quarter molten deliveries settled at $705 per long ton delivered, a record for the benchmark and an increase of $50 per long ton from the $655 agreed for the second quarter, Argus Media reported on July 13. The 8% rise extends a run that had already pushed the second-quarter settlement past the previous peak set in 2008.

Spot values are running far above the contract. Argus assessed spot export shipments from U.S. Gulf refineries at $1,100 to $1,150 per metric ton fob on July 9, roughly 60% above the delivered contract level. The gap reflects the collapse of Middle East sulfur exports through the Strait of Hormuz, which has redirected U.S. Gulf cargoes into unfamiliar destinations. Argus said second-quarter shipments reached North Africa for fertilizer production and East Africa for copper belt consumers.

The moderate size of the contract increase relative to spot is thought to reflect affordability limits downstream, where phosphate fertilizer demand has weakened on high prices. Producers in many regions have discounted domestic sulfur to keep fertilizer output running. Some U.S. Gulf producers also lack the infrastructure to export solid sulfur, leaving them dependent on domestic liquid buyers and exposed to demand destruction if storage fills at production sites.

The settlement lands a week after Kuwait’s KPC raised its sulphur price by $145 to a record $950 a tonne and days after Mosaic cut phosphate output at four U.S. plants on raw material availability. For phosphate producers, the Tampa sulfur price sets the floor under sulfuric acid costs into the fourth quarter, and a further contract rise would tighten margins already squeezed by soft DAP demand.

Source: Argus Media