Demand from metals sector bolsters sulphur pricing

Spanish Market: Fertilizers, Metals
19/10/23

Demand from the metals sector has supported upward price moves for sulphur, for sellers in the Middle East and the Baltics and buyers in southern Africa and southeast Asia, while fertilizer demand is starting to plateau.

A flurry of bookings for sulphur vessel loadings for Indonesia supported upward price moves last week, as demand for sulphur used in the nickel-leeching process firmed. The southeast Asia cfr sulphur price rose to $135.50/t cfr, an increase of 59pc from mid-July, and became the strongest cfr sulphur price globally at present. Nine cargoes were booked for loading from the Middle East and Canada to nickel producers Huayue and Lygend in Indonesia.

Higher price points drew more sulphur vessels eastwards. Molten sulphur vessel the Iver Ability loaded from the Middle East and is headed for Indonesia this month. This is the first time that this vessel has headed eastwards since May, vessel-tracking data show.

Demand for sulphur from copper mines in the Democratic Republic of the Congo has also offered support to delivered pricing. The southern African cfr sulphur price climbed to $131.50/t cfr in October, from $85/t cfr in July. China's CMOC earlier this year issued a large annual tender for about 200,000t for its copper-producing Tenke Fungurume mine. This has led to a spate of bookings for sulphur vessels discharging in Dar Es Salaam. The Samsun, PPS Luck, Nord Dubai and Aramis loaded from the UAE in September, carrying a combined total of 212,000t of sulphur.

Sulphur price increases also have been supported by MAP and DAP pricing that has firmed since August. But demand from the fertilizer sector is starting to cool off. Sulphur stocks in China — a major sulphur buyer and fertilizer producer — reached 2.75mn t this week, similar to volumes during the Covid-19 pandemic when all product was being stored on a lack of demand. Liquidity has started to stifle now that Indonesian and African sulphur demand for the metals sector is covered and DAP and MAP demand is starting to drop again.

Recent sulphur trades to metals buyers that have concluded at higher prices may have set the ceiling for the market in the final quarter of this year.

By Bea O'Kelly

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27/12/24

Viewpoint: Brazil urea deals for corn delayed to 2025

Sao Paulo, 27 December (Argus) — Brazil is set to enter 2025 with a last-minute surge in demand for nitrogen-based fertilizers, as farmers continue to postpone purchases for the 2024-25 second corn crop. Around 10-15pc of all fertilizer needs have yet to be purchased for the corn crop, whose planting is expected to start by February in central-western Mato Grosso state. Brazilian farmers have been delaying agreements for inputs as they wait for lower fertilizer prices and higher grain prices. The most delayed fertilizer acquisition is urea, with buyers expecting further price drops before committing to volumes. Granular urea prices were at $359/metric tonnes (t) cfr Brazil by 19 December, $39/t above the same period in 2023. The overall pace of input purchases is in line with farmers' buying patterns for the 2023-24 corn crop and 2024-25 soybean crop, when growers also waited until the last minute to secure final volumes. Traditional 4Q buying surged delayed Brazilian buyers used to speed up the pace of fertilizer purchases in the fourth quarter to supply the second corn crop. This would give them time to receive the inputs in time for application, without last-minute logistic concerns. But unexpected changes in fertilizer price trends, combined with changes in the timing of the soybean crop, led farmers to change this buying pattern and wait as long as possible before concluding deals. Farmers' saw this last-minute buying strategy rewarded in early 2024 when urea prices were about $393/t cfr Brazil, below levels seen earlier in October 2023. And a delay in the 2024-25 soybean planting because of unfavorable weather conditions also contributed to postponed fertilizer acquisitions for corn, since the soybean harvest would likely be delayed and force farmers to plant corn outside the ideal period. Those factors are set to again push final urea purchases to January. Some volumes traded in November-December may discharge in ports in January, intensifying deliveries in the first months of the year. Brazil imported 7.6mn t of urea in January-November, 19pc above the same period in 2023. The latest lineup data from 26 December points to around 400,000t to be delivered at ports in December and 422,000t in January, according to maritime agency Unimar. Farmers focused on acquiring ammonium sulphate (amsul) volumes in the past three months, as prices carried a discount considering the nitrogen content compared with urea while also adding sulphur. There is plenty of available compacted/granular amsul, with Chinese producers eyeing Brazil as an outlet for the product. Imports of amsul totaled 5.1mn t in the first 11 months of the year, 18pc above the same period last year. A total of 596,000t and 1.2mn t were set to discharge in ports in December and January, respectively, according to Unimar's lineup data from 26 December. The trend is the same in the domestic market, with purchases advancing slowly. Some cooperatives and retailers bought volumes to guarantee availability when farmers decide to buy. Farmers are most advanced in theirs potash (MOP) acquisitions, as its lower-than-usual price has motivated farmers to buy the fertilizer for 2025-26 corn and soybeans. Market participants estimate that around 50pc of MOP needs in Mato Grosso for the 2025-26 soybean crop were purchased by early December. Demand has been high for the first quarter of 2025, leading to expectations of intense MOP deliveries at ports. This would mean a high flow in the inland market, competing with urea volumes handling in January-February. By Gisele Augusto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US stainless recovery expected in 1H

27/12/24

Viewpoint: US stainless recovery expected in 1H

Houston, 27 December (Argus) — US finished and scrap stainless steel market participants are cautiously optimistic for 2025 because of low inventories, waning imports and expected policy changes when president-elect Donald Trump takes office in January. The stainless steel market expects a challenging early start to 2025 before a rebound later in the first half of the year, as renewed demand from the oil and natural gas sector combines with low inventories and potential Trump policies. US stainless meltshop production in the first half of 2024 totaled just over 1mn metric tonnes (t), up from the atypically low 2023 levels of roughly 940,000t, according to data from World Stainless. These figures are well below prior years with the US averaging about 1.18mn t in the first half of 2021 and 2022. The market has struggled to hit its full stride in 2024 as consistent finished imports and falling nickel prices undercut the market. Flat rolled coil ex works US prices for 304 declined to $1.60-1.77/lb for December shipments, compared with $1.68-1.86/lb a year earlier. Still, this trend could soon stabilize and begin to reverse. Sources estimate US service center finished stainless steel inventory levels for both flat rolled and long bar products are at lows last seen in 2021, a time when US demand was still crimped from the Covid-19 pandemic. Service centers have kept unusually low inventories because of a mix of moderate demand and higher-than-usual interest rates raising end-of-year accounting costs. Weaker service center demand has subsequently capped scrap generation, limiting how low US mills can push their raw material costs for new scrap. Average US stainless steel scrap 304 solids prices have held within a tight 2¢/lb spread of 56.5-58.5¢/lb since early August as falling generation rates ran up against lower demand. The incoming Republican administration has fostered an atmosphere of optimism among market sources, who expect Trump policies will support the domestic industry by cutting oil and gas permitting restrictions, shifting US spending away from overseas investments and broader deregulation of American businesses. Trump has also proposed a myriad of tariffs, including specifically targeting China and the US' largest trading partners — Canada and Mexico. US imports of flat rolled stainless of any size climbed by 22pc to 404,000t in 2024 so far, according to US customs data. Mexico contributed roughly 7pc of these volumes, while Indonesia — home to multiple Chinese stainless mills — contributed 8pc of US imports. By raising import costs, US producers could in theory make up some of this difference. Stainless producers will likely have to raise prices as a result of tariffs, following a year with far fewer base prices adjustments. Long producer Universal Stainless raised base prices only once in 2024 compared to five times in 2023. Nickel-scrap disconnect widens US mills have offset the persistent weak demand by tweaking the nickel payable — the percentage of the price of nickel they are willing to pay for nickel recovered from scrap — each month since April. The nickel payable rate reached a historic low of 42-43pc in 2023, before rebounding. Although up from historic lows, nickel payable has decreased from 57-59pc in March of this year to 50-54pc for procurements in November. At these lower levels scrap is more disconnected from the movements in the nickel market. Some market participants still remain concerned, chiefly over slowing growth in China, which consumes nearly 50pc of the world's nickel. China has ramped up production of nickel largely in Indonesia in recent years to service the growing electric vehicle market. Market conditions in Europe also continue to undercut demand. Spanish stainless producer and owner of US-based North American Stainless, Acerinox, highlighted in its third quarter results that the European manufacturing sector is undergoing a "drastic contraction". It added that while destocking efforts were completed at the time, demand remained weak. By Pete J Stavretis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Indian FeCr to face pressure in 1Q 2025

27/12/24

Viewpoint: Indian FeCr to face pressure in 1Q 2025

Mumbai, 27 December (Argus) — India's ferro-chrome market is expected to remain under pressure in the first quarter because of muted spot demand as a result of sluggish stainless steel consumption. Producers will likely keep ferro-chrome output low in the coming months. The market is widely expected to remain sluggish until after the lunar new year holiday in February. There is little to no optimism that spot liquidity and supplier profit margins will increase in the short term, because demand from the stainless steel industry is weak. Prices for Indian high-carbon ferro-chrome 60pc fluctuated significantly in 2024. Prices hit a high of 120,000-121,000 rupees/t ($1,400-1,415/t) ex-works on 21 February, bolstered by tight ore availability and rising feedstock costs. But weak demand for stainless steel, both locally and globally, kept many market participants on the sidelines, causing prices to fall sharply in April-August, reaching Rs102,000-104,000/t ex-works on 20 August. Prices have since remained around this level, with the Argus assessment on 12 December at Rs104,000-106,000/t. Low demand from the stainless steel sector has effectively removed any possibility of a price recovery in the near term. Spot liquidity has been markedly lower than normal and a rebound is not expected. Volumes signed on long-term contracts for delivery in 2025 have also taken a dip and are at around 70-80pc of the volumes signed in 2023 for 2024 delivery. Weaker ferro-chrome demand and prices have led to lower production. India's ferro-chrome output declined from 1.3mn-1.4mn t in 2023 to an estimated 1.2mn t in 2024, and monthly consumption in the country is estimated to have decreased from 30,000-35,000t to 20,000-25,000t. Consumption is unlikely to rebound significantly until global and local stainless steel demand recovers. Suppliers typically turn to the export market when there is a supply surplus, with exports from India typically accounting for around 50pc of the country's output. But India's ferro-chrome exports are also falling. Shipments declined by 38pc year on year to 402,817t in January-September, compared with 648,475t over the same period a year earlier. Macroeconomic headwinds have dented global demand for stainless steel, and in turn ferro-chrome. European and Chinese demand was high in the first half of 2024 but has slowed significantly since then, with European buyers shifting their focus towards cheaper Kazakh material. Increased freight rates, port congestion and higher production costs have further weighed on exports. In addition, China has increased production and its domestic output now exceeds domestic consumption. This has weighed on domestic prices since August and increased supply in the export market. The market is unlikely to pick up until ferro-chrome inventories at China's port are consumed, a source told Argus . Decreasing demand and prices have made some suppliers' margins negative, forcing some to cut output by 50-60pc and others to shift their focus to producing manganese alloys, which offer stronger margins despite higher production costs. The cost of production for high-carbon ferro-chrome in India is around Rs116,000-119,000/t ex-works. Only producers with their own captive chrome ore mines are making a profit at present, sources said. Indian ferro-chrome suppliers also face issues with deteriorating chrome ore grade, which has led to increased production costs and lower-quality ferro-chrome output. The deterioration in ore quality is particularly evident in state-owned Odisha Mining Corporation (OMC) auctions — the premium for OMC's 50-52pc ore over its 48-49.99pc ore rose to above Rs1,000/t in early December. The higher premiums for high-grade ore, coupled with the drop in demand, have limited ferro-chrome producers' appetite to participate in OMC's auctions, as supply of high-grade ore is limited and only available at high premiums while low-grade ore is unfavourable as its consumption raises production costs. A lack of interest in OMC's monthly tender boosted this bearish sentiment and created further downward pressure on India's ferro-chrome prices. By Deepika Singh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US amsul demand to stretch supply in 1Q

26/12/24

Viewpoint: US amsul demand to stretch supply in 1Q

Houston, 26 December (Argus) — US ammonium sulfate (amsul) prices are likely to remain elevated through the first quarter of 2025 because of increased demand, high feedstock costs and more forward purchases as buyers look to avoid the high prices seen last spring. Scarcity seen in the 2023-2024 fertilizer year in the US amsul market has continued into 2024-2025. Strong demand has drained US inventories, despite rising domestic production in the third quarter, which increased by 11pc to 4.8mn short tons (st) compared to the five-year average of 4.25mn st, according to data from The Fertilizer Institute (TFI). But production in the fourth quarter has fallen because of extended plant downtime. Major production facilities such as AdvanSix's 1.75mn st Hopewell, Virginia, plant and Nutrien's 700,000 metric tonne (t) Redwater, Alberta, plant underwent prolonged turnarounds in the fourth quarter, according to sources. The unplanned downtime reduced the availability of pre-pay volumes in the market and caused at least one producer to partly cover their reduced output by purchasing imports. But imports have only provided the US market with limited supply relief. Year-over-year, US imports are lagging by 17pc from July through October. Around 282,700t of amsul entered the US during the period, compared to the 338,600t that arrived in the same period last year. This year's imports are still 11pc greater than the five-year average, illustrating the trend of demand growth in the US. Increasing feedstock costs have also supported amsul prices through the back-half of 2024. Fertilizer producer IOC said higher feedstock costs were the primary driver of its fourth quarter price hike at the start of October. Feedstock ammonia prices are expected to slip or remain stable for January because of seasonal weakness and lower global prices, said sources. Feedstock sulfur market prices on the other hand have risen over the period and may incur a $20-30/st increase because of rising global demand, according to market participants. Amsul's relationship status update Amsul values slipped in December and early January of last year, allowing the market to buy at lower values before the spring season. The opposite is anticipated to occur this year after major producers AdvanSix and IOC increased their offers for first quarter pre-pay delivery in December. Despite the rising price of amsul, buyers have been lining up more forward deliveries this fall than other years, according to sources. In lieu of hand-to-mouth buying and rising prices last spring, buyers are looking to hedge against potential volatility in the back half of the fertilizer year. Bolstered demand has led to additional price strength which is expected to persist through the winter season. Demand for ammonium sulfate arrived earlier than usual but it is unclear whether it will resurface as strong in the spring. Amsul price in the US Corn Belt recently rose to an average of $380/st, 20pc above the average price in December of last year. Amsul prices typically rise in the spring season when applications begin, so amsul values would appreciate even further if that trend occurs this year. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Real, tariffs to hit Brazil steel imports

26/12/24

Viewpoint: Real, tariffs to hit Brazil steel imports

Sao Paulo, 26 December (Argus) — Steel importers in Brazil are likely to face a tougher market in 2025 as government measures and the Brazilian real's depreciation to the US dollar make products from abroad less attractive. Brazilian steel importers are concerned that tariff-quota and antidumping policy changes made this year by the federal and state governments could raise costs for importing cargoes in 2025, likely exacerbating the impacts of a sharply depreciated Brazilian real relative to the dollar. The concerns come as US president-elect Donald Trump is already raising global trade tensions, with specific focus on Mexico, Canada and China, that could unleash waves of dueling trade measures. After seeing strong import growth in the post-Covid-19 recovery, Brazil steel importers are fretting they may lose momentum. Brazil's steel imports year-to-date November rose by nearly 24.4pc to 5.6mn metric tonnes (t) from the same period a year earlier. They are expected to end the full year 2024 up by 24pc, according to steel association Aco Brasil, after climbing by 50pc in 2023. Apparent consumption rose by 9.6pc to 24mn t in the 11 months through November, while production increased by just 5.6pc to 31.17mn t from a year earlier. Even with a 28pc depreciationof the real to the dollar in the 12 months through 24 December, prices for dollar-denominated steel imports still have a cost advantage over domestically produced steel. But that advantage is narrowing as the real weakens, with the price difference from imports over the domestic market narrowing to just $112/t in the latest assessment for hot-rolled coils (HRC) from $172/t in mid-October . "The dollar's [appreciation to the real] is messing up imports," one market participant told Argus , saying a wider price advantage for importers was necessary to offset issues like the exchange rate risk and the shipping time. Market participants also cited rising borrowing costs in Brazil as an additional challenge for imports, as many buyers rely on financing to purchase material from abroad. Brazil's central bank on 11 December unexpectedly hiked its target interest rate by a full percentage point to 12.25pc , citing the country's uncertain fiscal situation, accelerating inflation and challenging external conditions. Importers recently expressed concerns over Santa Catarina state's decision to no longer grant tax incentives for imports of six different steel and iron products for commercialization or resale in 2025. Although the timeline for implementing the measure was postponed to July and could face changes, importers remain concerned and are monitoring any possible reviews of the decision, sources told Argus . Santa Catarina's main port, Sao Francisco do Sul, accounted for over one-third of every steel product that is imported to Brazil from January to September, according to data from the country's distributors association, INDA, published in September. On the federal front, the government is likely to announce new and renewed antidumping measures for products coming mainly from China, Brazil's largest steel supplier. Another obstacle for importers would be a possible review of the tariff system for steel imports, which was implemented in June 2024 and led to additional tariffs of up to 25pc. The measure proved mostly ineffective at curbing imports into Brazil, and the industry group Aco Brasil said it would ask for adjustments . Despite the challenges, there is still room for importers to bring material to Brazil , as the country lacks steel to supply its domestic demand, another market participant said. "Brazil will always need imports because it still lacks some key home-made products to feed its market," the participant said. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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