Sulfur: Moderate recovery or dominant tone

Since November, the sulfur market, which has experienced the "golden nine silver ten"
, has continued to rise moderately.
As of December 8, the mainstream transaction price of domestic sulfur was 1400~1500 yuan (ton price, the same below), up about
10% from the previous month.
The high-end transaction price in the southwest region even reached more than 1680 yuan, an increase of more than 20%
from the previous month.
In addition to the slight decline in the northeast market, other regions have increased to varying degrees
.
The continuous rise in the market of the main producing areas and the large price difference between regions have once again increased the
industry's attention to the sulfur market.

"This round of sulfur rally is a continuation of the bottoming rebound in August, which is a combination of a variety of objective factors
.
Since October, the epidemic situation in various places has repeatedly led to poor long-distance transportation, slow recovery of sulfur circulation, large regional price differences, low price areas can not be replenished normally to high price areas, coupled with the arrival of winter, fertilizer winter storage has been launched, some fertilizer enterprises or traders have stock demand
.
At the same time, supported by the steady rise of the external market, the domestic sulfur market also strengthened
simultaneously.
In the short term, basic positive factors remain, and the sulfur market continues to recover moderately or the main tone
.
Li Peixin, purchasing director of Jiangsu Dipu Technology Co.
, Ltd.
, analyzed
.

Downstream winter storage unfolds

"Since mid-to-late November, with the development of fertilizer winter storage, the phosphate fertilizer market in various places has begun to rise, of which the price of monoammonium phosphate has risen from 3,500 yuan in the middle of the month to 3,800 yuan at the end of the month, and the price of diammonium phosphate has risen from less than 3,000 yuan in the middle of the month to about 3,500 yuan, an increase of 8% and 16%
respectively.
The price increase has stimulated fertilizer maintenance enterprises in various places to start work or increase the load, and the rigid demand for raw material sulfur has increased
.
Zhang Aiping, a market analyst at Henan Chemical Network, analyzed
.

According to statistics, in the latest week, the operating rate of monoammonium phosphate enterprises was about 43.
47%, up 2.
26 percentage points from the previous month; the operating rate of diammonium phosphate enterprises was about 43.
26%, up 2.
89 percentage points
from the previous month.

According to Zhang Aiping, after the sulfur price hit a new high in recent years in May this year, the risk began to be released sharply, falling from a high of 4,000 yuan to about 900 yuan in early August, a decline of 77%.

"This wave of sharp correction has fully released the bubble risk in the sulfur market
.
Although the moderate rise of more than three consecutive months has repaired some of the previous declines to a certain extent, from a technical point of view, there is still some room
for repair.
Especially when winter storage is approaching, under the background of no significant increase in sulfur social supply, the stocking behavior of fertilizer companies will still form a favorable support
for the recent rise of the sulfur market.
Zhang Aiping said
.

The external disk continues to help

Statistics show that China's granular sulfur landed price (CFR) has risen continuously from $100 in August to about $190 at the end of November, equivalent to more than 1,500 yuan, an increase of 90%, higher than the domestic increase
.
On December 8, the sulfur quotation of Yangtze River Port was 1650 yuan, and the quotation of Sichuan Puguang Wanzhou Port was 1680 yuan, forming a basic support
for the domestic market.

Li Peixin said that from the sulfur import data in August ~ October this year, it can be seen that the average monthly import volume is 613,300 tons, which is lower than the annual average level, which indicates that the sulfur import source shows a downward trend
.
Combined with the uncertainty of the current international situation, it is unlikely that foreign refineries will significantly increase sulfur production capacity in the short term
.
Under the background that it is difficult to increase the international supply significantly, the price of external sulfur is still likely to continue to rise, which is expected to continue to form a favorable support
for the domestic market.

Regional spreads narrowed

Market front-line information feedback, in recent months, due to the rebound of the epidemic in many places in China, once again caused poor transportation and logistics, sulfur source liquidity has been affected, and the price difference between regions is large
.
For example, since September, the sulfur market has risen for more than three consecutive months, while the northwest market has always been in a narrow range, with a low-end price of 600 yuan and a high-end price of only about 1,000 yuan
.
At the beginning of November, the mainstream transaction price of domestic sulfur has reached about 1400 yuan, while the northwest region is still hovering between 600~1000 yuan, and it is mainly
based on intraregional flow.
However, interregional spreads have narrowed
recently.
At the end of November, the low-end price of sulfur in Northwest China has been raised to more than 800 yuan, and the low-end supply continues to decrease.

Shao Huiwen, a senior market commentator, said that the area where sulfur market prices are low is also northeast
China.
In addition to the logistics restrictions caused by the epidemic factors, the main reason is also related to
the low operating rate of fertilizer and sulfuric acid enterprises in the region.
However, with the development of winter storage and the gradual recovery of logistics, the operating rate of local fertilizer enterprises will inevitably recover, the demand for raw material sulfur will also increase, and the price difference between regions is expected to continue to narrow.

Some market participants believe that after nearly 4 months of continuous rise, from a technical point of view, the market has the need
to seek a new balance point.
Although the source of imported sulphur has declined, domestic production has continued to increase
.
In January ~ October, the cumulative amount of domestic sulfur was 7.
609 million tons, which was 1.
14 times that of imported sulfur, and the influence of high-end prices in ports was declining
.
Therefore, it is unlikely that the sulfur market will rise sharply, and a moderate recovery may be the main tone
.