Tampa contracts climb while Vancouver volumes lag mid-2021

By mid-2021, US Gulf molten markets had moved well above early-year levels as phosphate and industrial demand recovered and sulfur availability remained snug after pandemic-era refining cuts. BC Insight put the Tampa CFR molten sulfur contract near $192 per tonne by mid-June versus about $83 in early January and $54 a year earlier, roughly a threefold year-over-year increase. Vancouver and Arab Gulf FOB benchmarks rose in parallel to levels last seen around early 2014 as phosphate prices hit multi-year highs. USGS later summarized that Tampa contract prices rose into the mid-$100s per long ton range by summer before settling near $183 into late 2021. The $192 mid-June trade-press print and the $183 USGS late-year print are the same climb in two sources. Licensed weekly assessment grids are not restated here.

Seaborne solid markets into Asia also firming fed Canadian FOB interest, but Vancouver calendar-year loadings still finished below 2020. Port of Vancouver sulphur was 2,291,630 tonnes in 2021, down 14 percent from 2.65 million. The mid-year divergence between rising US molten contracts and still-soft Canadian annual loadings is instructive for basis analysis. Tampa's climb into the mid-$100s signaled that Florida phosphate and related acid consumers were competing for domestic liquid tons while Atlantic recovered output remained constrained relative to pre-pandemic norms. Forming plants and unit-train programmes require multi-month visibility. A spring price move alone rarely fills the second half's vessel schedule. 2022's 22 percent rebound to 2.79 million tonnes is when later $282-$481 Tampa and $478 FOB filled it.

Alberta recovered sulfur still leaves mainly through the Vancouver stem. Heartland Sulphur completed a new molten storage tank on 30 June 2021 at its Industrial Heartland terminal near Edmonton, more than doubling molten storage. The Lion Sulphur-Inter-Chem joint venture provides remelt and forming so Alberta producers can reach Vancouver dry-bulk and North American molten rail. Argus noted several new Western Canada forming projects that could boost sulfur trading out of Alberta into Vancouver dry-bulk. Extra forming is a prerequisite for converting blocked or molten oil-sands sulfur into seaborne granules when FOB clears remelt and rail costs. Mid-June is that build-out in motion, 15 days before the tank completion. Sultran's nine inland facilities, CN and CPKC, more than 1,500 gondolas, Port Moody and North Vancouver, is the rail-and-terminal half that already existed.

Phosphate benchmarks cited in mid-2021 sulphur reviews put DAP Morocco near $584 per tonne FOB, up 95 percent year on year, and Brazil MAP near $714 CFR, up 125 percent, eight- to nine-year highs that underpinned the sulfur rally. Analysts warned new OCP, India, and Brazil phosphate capacity could pressure 2022-23 affordability. The Fertilizer Institute would later cite sulfur prices up 198 percent from March 2021 to March 2022 as a critical ammoniated-phosphate input cost. Mid-June $192 Tampa is the first-half step of that twelve-month shock. TFI members paying that climb are the US demand side. Heartland's tank is the Canadian logistics side.

China 2020 sulfur imports had plunged about 3 million tonnes year on year, Argus, with lower domestic stocks. Into 2021 China remained the world's largest importer, import dependence still near 50 percent in early-year trade press, but Argus expected Chinese production to rise almost 40 percent by 2025, four near-term projects more than 2 million tonnes a year. Changdongbei sour-gas sat in that stack. Mid-2021 CFR was climbing from about $141 early in the year toward $281 by year-end, Middle East-Yangtze freight from about $27 toward $69. Zhenjiang stocks would end the year at 0.52 million tonnes from 1.09 million. June is the middle of that tightening, not the December Yn2,200 domestic high.

Argus expected just over 3 million tonnes of new sulfur capacity in 2021, concentrated in Saudi Arabia, Qatar, and Kuwait, COVID delays affecting some startups. Al Fadhili more than 1 million tonnes a year, Barzan about 800,000 tonnes a year delayed into 2021, Al Zour toward early 2022: the Gulf remained the swing incremental seaborne supplier. 3 million tonnes of new capacity is the same order of magnitude as the 2020 Chinese import hole. Timing and delays meant the hole was not filled on the day the capacity was forecast. Price still trebled year on year. USGS Canada about 4.9 million tonnes, US about 8.1 million, world about 80 million, is the recovered planet those increments sit on. US elemental unit value would average about $92.30 for 2021, from $24.60 in 2020.

BC Insight's conference summary noted continuing declines in Alberta conventional sour-gas sulfur, partially offset by British Columbia rebound and oil-sands growth. The structural shift toward Fort McMurray upgrader sulfur concentrated Canadian solid-export logistics on remelt-form-rail-Vancouver chains. Heartland is Edmonton remelt depth. South Cheecham's 2023 start would be upgrader-belt forming. Mid-2021 has Heartland. It does not yet have Cheecham. The project pipeline is the file.

Alberta recovered sulfur still leaves mainly through the Vancouver stem. World tightness shows up there as a $192 Tampa that molten rail can deliver into and a 2.29 million tonne harbour year that forming has not yet filled. Cross-border molten rail from Western Canada into US consumers remained an outlet that does not appear in Vancouver sulphur statistics. Readers comparing hubs should therefore pair USGS Tampa paths with port tonnage rather than assuming one number explains Western Canadian balances. UNCERTAIN: month-by-month Vancouver stem data for second-quarter 2021 are not fully open. Annual port totals remain the verified public anchor.

Key points

• USGS: Tampa prices rose through mid-2021; Q3-Q4 2021 settled near $183/lt.
• Vancouver 2021 annual sulphur still 2.29 Mt, below 2020 despite later price firmness.
• US and Canadian recovered output remained sensitive to fuel demand and upgrader rates.
• Basis between Tampa molten delivered and Vancouver FOB solid widened and narrowed with freight and form differentials.
• UNCERTAIN: Q2 2021 spot Vancouver midpoint series (licensed PRA assessments not redistributed).

30-day watchlist

• Heartland 30 June tank completion confirmation.
• USGS summer Tampa path versus the $192/lt mid-June trade-press print.
• Any Argus or port monthly Vancouver loading versus the 2.29 Mt full-year trough.
• Chinese mid-year CFR versus the early-year about $141/t neighbourhood.

Sources

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

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