COVID soft market and early refinery recovery into spring 2021

Elemental sulfur entered 2021 still marked by the 2020 pandemic shock to refining and fuel demand. Recovered sulfur output tracks oil and gas processing, so lower throughputs had constrained North American and global availability through late 2020 even as phosphate demand began to firm. USGS Mineral Commodity Summaries 2022 recorded that Tampa, Florida molten contract prices began 2021 near about $69 per long ton, then moved higher as supply issues and demand recovery interacted. BC Insight and Argus-linked commentary put early-January Tampa near $83 per long ton CFR versus about $54 a year earlier, the start of a multi-quarter firming cycle into mid-year. Treat $69 as the USGS year-open anchor and $83 as the trade-press early-January print. Both describe a market leaving 2020, not yet in a spike.

Port of Vancouver fertilizer-category sulphur throughput for full-year 2021 settled at 2,291,630 tonnes, down from 2,653,284 tonnes in 2020, a 14 percent decline, consistent with a soft export year despite rising inland prices later in 2021. Public statistics from the Vancouver Fraser Port Authority remain the cleanest open measure of that trough. The five-year ladder from this bottom is 2.29 million tonnes in 2021, 2.79 million in 2022, 3.10 million in 2023, 3.35 million in 2024, and 3.51 million in 2025. First-quarter 2021 is the trough in motion, not the 2022 rebound. Forming plants and unit-train programmes require multi-month visibility. An early-year Tampa print near $69-$83 rarely fills the second half's vessel schedule.

Alberta recovered sulfur still leaves mainly through the Vancouver stem. USGS MCS 2022 estimated world sulfur production near 80 million tonnes, Canada about 4.9 million, the United States about 8.1 million. Import-source statistics for 2017-20 already showed Canada supplying roughly 73 percent of US elemental sulfur imports. Molten rail from Western Canada into US phosphate and industrial plants is that share's physical counterpart. Pacific solid loadings are the harbour slice. Cross-border molten rail does not appear in Vancouver sulphur statistics, so provincial recovery could stay busy even when Pacific solid lagged. Suncor's public page later put marketable sulfur above 800,000 tonnes a year across oil sands, gas plants, and refineries. That operator stream used both doors.

Argus analysis highlighted a roughly 3 million tonne year-on-year plunge in Chinese sulfur imports during 2020, accompanied by lower domestic stock levels. Into 2021 China remained the world's largest sulfur importer, but rising domestic recovered sulfur and planned projects of more than 2 million tonnes a year were already expected to structurally reduce import intensity toward 2025. Chinese trade press put early-2021 import dependence still near 50 percent even as domestic output rose, with import CFR on a path from about $141 per tonne early in the year toward $281 by year-end, Middle East-Yangtze freight from about $27 per tonne toward peaks near $69. First-quarter 2021 is the cheap side of that CFR climb. Zhenjiang stocks would fall from about 1.09 million tonnes at year-start to 0.52 million by year-end. March does not yet have that draw. It has a 50 percent import door and a 2020 hole still healing.

BC Insight conference reporting noted March and later September storm disruptions to North American sulfur logistics alongside recovering US refinery utilization. Temporary outages tightened regional molten availability even as global recovered sulfur supply remained structurally adequate for the year. Winter Storm Uri's February Texas freeze sits in the same winter. USGS later said high 2021 prices reflected supply issues rather than a permanent demand boom. Pandemic refining cuts, the Chinese import plunge, and storm outages are those supply issues. Phosphate restocking is the demand side. DAP Morocco would reach about $584 per tonne FOB by mid-year, Brazil MAP about $714 CFR, eight- to nine-year highs that underpinned the sulfur rally.

Argus expected just over 3 million tonnes of new sulfur capacity in 2021, concentrated in Saudi Arabia, Qatar, and Kuwait, with COVID delays affecting some startups. Al Fadhili more than 1 million tonnes a year, Barzan about 800,000 tonnes a year delayed into 2021, and Al Zour toward early 2022 are the named slices. The Gulf remained the swing incremental seaborne supplier. It did not commission on a sulfur-price timetable. First-quarter 2021 is the capacity forecast before 15 October Chinese inspections and before 2022's $481 peak. Incremental tonnes had not produced a surplus by March. Tampa was already leaving $54.

Alberta recovered sulfur still leaves mainly through the Vancouver stem. World tightness, when it is pandemic recovery and a Chinese import hole rather than a Strait closure, still shows up there as remelt economics starting to improve and a harbour that can print a 14 percent down year while molten rail stays busy. Market participants entering spring 2021 still carried balance-sheet scars from 2020. Phosphate producers that had delayed purchases faced a thinner spot offer list even while absolute prices remained modest by later-cycle standards. For Alberta producers, the early-year calculus stayed familiar: if export netbacks after remelt, rail, forming, and terminal charges did not clear, block pouring preserved optionality for a firmer later window. Licensed weekly assessment grids are not restated here. UNCERTAIN: exact Alberta Energy Regulator provincial closing stock for first-quarter 2021 is not restated here from a single open secondary source. Treat inventory as elevated relative to later 2025 lows but verify against AER Sulphur Balance tables.

Sultran's chain from nine inland facilities via CN and CPKC to Port Moody and North Vancouver, more than 1,500 gondola cars, is the inland backbone that would later carry 3.51 million tonnes. First-quarter 2021 used it at the 2.29 million tonne trough run-rate. Heartland's molten tank on 30 June is still a quarter away. Forming capacity was being built into a recovery, not into a spike. That is the Alberta-lens read on a $69-$83 Tampa open.

Key points

• USGS MCS: Tampa molten contracts began 2021 near ~$69/lt before rising later in the year.
• Port of Vancouver sulphur: 2.29 Mt in 2021 vs 2.65 Mt in 2020 (port statistics).
• Recovered sulfur supply remained tied to refining and oil sands rates, not sulfur price signals.
• Pacific export chain (remelt, rail, form, terminal) remained costly relative to soft FOB realizations early in the year.
• UNCERTAIN: Q1 2021 AER Alberta inventory print pending direct AER table pull.

30-day watchlist

• USGS or trade-press confirmation of Tampa holding the $83/lt early-January neighbourhood into April.
• Any public note on US Gulf refinery run recovery after winter-storm outages.
• Chinese first-quarter import run-rate versus 2020's about 3 Mt plunge.
• Heartland tank completion commentary ahead of the 30 June date.

Sources

• USGS Mineral Commodity Summaries 2022 - Sulfur
• Port of Vancouver 2022 Statistics Overview
• Ammonia and sulphur market trends (BC Insight / Argus)

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Public reference summary. Weekly PRA assessments require a commercial license. Not investment advice.