Argus linked elevated refinery utilization and resilient fuel demand to higher US Gulf recovered sulfur output even as phosphate demand weakened and inventories swelled in early third quarter. The supply-demand mismatch amplified the mid-year price crash. The viewpoint is at https://www.argusmedia.com/en/news-and-insights/latest-market-news/2405506-viewpoint-sulfur-volatility-to-wane-as-supply-recovers.
Sulfur recovery tracks crude runs and sour-crude slates, not the sulfur price. Fuel demand that kept Gulf refiners busy added Claus tonnes while Mosaic cut phosphate utilization and China curbed DAP exports. Two unrelated cycles, one sulfur balance. USGS January-August 2022 US production higher year on year is the production print. Tampa $352 in mid-July from $481 in April is the lagging contract print.
Alberta recovered sulfur still leaves mainly through Vancouver. US Gulf recovered sulfur leaves as molten into remaining Florida runs and as solid export when inventories swell. Canadian Pacific FOB crashing toward under $65 is the other basin's version of the same mismatch: oil-sands recovery did not stop because phosphate margins broke. Forming and remelt did the adjusting.
World output about 82 million tonnes, roughly unchanged, USGS, meant the crash was demand, not a Claus collapse. UAE about 6.0 million tonnes production kept Gulf solids in the seaborne list. Qatar August QSP $77 from $428 is those solids repriced. US Gulf inventories swelling in early third quarter is the Atlantic pad version.
Russia's February invasion had hampered 2022 world sulfur supplies in USGS's later telling even as output was unchanged. War-risk premia lifted first-half prices. They did not cut Gulf refining. August is when the demand hole overwhelmed the risk premium.
TFI's plus 198 percent sulfur cost from March 2021 to March 2022 is why phosphate utilization sank. Affordability, not molecule shortage, cut the bid. Recovered output kept coming. That is the mismatch.
2023 US production about unchanged at 8.6 million tonnes would confirm the output plateau. 2023 Tampa $55 in mid-July would confirm the demand hangover. August 2022 is the month the mismatch became inventories. Licensed weekly grids are not restated.
Figures follow Argus. Elevated Gulf refining into fading phosphate demand is the Atlantic supply chapter of the crash.