1、 Price Review
This week (July 29th August 4th), the sulfur market showed a trend of “stabilizing first and then falling”. As of August 4th, the benchmark price of sulfur was 9169.00 yuan/ton, a slight decrease of 0.18% from the beginning of the month. From the perspective of intraday fluctuations, the daily decline on August 4th reached 1.26%, breaking the previous days’ sideways stalemate.
2、 Supply side: Low port inventory, lack of price guidance for refinery bidding and unsuccessful bidding
In terms of inventory, the national port sulfur inventory was 879600 tons, a month on month decrease of 1.08% and a significant year-on-year decrease of 66.22%. The port inventory is at a relatively low level in recent years, forming a certain bottom support for the market.
An important event on the supply side, Dalian Refinery released a tender for 6300 tons of sulfur for future supply, with a delivery date of October 7-10 and a bidding base price of 9110 yuan/ton. The final bid was unsuccessful and no effective transaction price was generated. As an important market indicator, the failure of bidding further increases the wait-and-see mentality within the theater, and the market lacks a clear price anchor point.
3、 Spot market: Trading is sluggish, and the game between buyers and sellers is intensifying
During the week, the price of granular sulfur at ports slightly decreased, with Zhenjiang Port’s granular sulfur at 9150 yuan/ton and Dafeng Port’s granular sulfur at 9130 yuan/ton, a synchronous decrease of 10 yuan/ton compared to the previous day.
The holding enterprise has shipping demands, but the willingness to proactively make external offers has weakened; Downstream buyers are only willing to accept goods at a low price, making it difficult to achieve bulk transactions, and the market only has sporadic small order negotiations. Market research sentiment shows that the proportion of bullish and bearish views in both upstream and downstream markets is only 17%, and the vast majority of practitioners choose to remain flat and wait. The overall market presents a situation where inventory is supported, but demand follow-up is weak, with strong quotations and weak transactions.
4、 Downstream demand: The phosphate fertilizer market is weak, and the raw material pull is limited
The downstream phosphate fertilizer industry as a whole maintained a weak operation and failed to bring strong consumption pull to sulfur.
As of August 5th, the benchmark price of ammonium phosphate was 4450.00 yuan/ton, a decrease of 0.37% compared to the beginning of this month (4466.67 yuan/ton). The market is weakly consolidating, and downstream only needs to replenish inventory. Although there have been a few tender releases, the psychological price of procurement is low, and actual orders are mainly negotiated on a case by case basis;
The ex factory price of 64% diammonium phosphate is 48004850 yuan/ton, but the release of terminal demand is slow, and inquiries and transactions are relatively limited. The factory operation tends to be conservative. There is no centralized replenishment action at the phosphate fertilizer end, and the consumption power of sulfur raw materials is insufficient.
5、 Market prediction
Short term low inventory in ports has a bottoming effect on prices, but the short-term indicators of spot trading technology have weakened. Coupled with the need for downstream phosphate fertilizer demand to recover, the current situation of insufficient follow-up of buying orders is difficult to improve quickly. Refinery bidding failed due to lack of direction guidance, and the wait-and-see attitude of operators continues.
Overall, analysts believe that sulfur may continue its weak consolidation pattern in the short term. Focus on tracking the shipment dynamics of refineries, changes in port inventory, and the pace of raw material replenishment for phosphate fertilizer enterprises in the future.
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