The Sulphur Market Outlook Mike Kitto Principal Consultant Sulphur CRU
China International Sulphur&Sulphuric Acid Conference(211) The sulphur market outlook Mike Kitto CRU, UK. Part 1: Recent market trends Supply. Demand. Balance. 29
China International Sulphur&Sulphuric Acid Conference(211) World brimstone production grew by 8.7 Mt, 2-21. Americas: North American output has fallen in each year since 24. Europe/FSU/Africa: Output fell in Europe but rose by 2.7 Mt in the FSU. Small increase in Africa. Asia/Oceania: Production increased in all regions, with very strong growth in the Middle East (+4.4 Mt) and East Asia (+3.4 Mt). 6 5 4 3 2 1 Americas Asia/Oceania Europe/FSU/Africa 2 22 24 26 28 21 North America: Production from sour gas is in decline and the focus is now on shale gas. Alberta gas 21: lowest since 1968. 3
China International Sulphur&Sulphuric Acid Conference(211) Production growth has come from US oil refineries and Canadian oil sands, but the rate has slowed. 1995-24: CAGR 4.7% Hurricanes Katrina and Rita FSU: Production has grown by 2.7 Mt, principally from gas in Kazakhstan and Russia. Russia: Astrakhan normally 4.7 Mt/y but cut to 3.8 Mt in 29. Orenburg 1.1 Mt/y. Sulphur from gas Kazakhstan: Tengiz now 2.3-2.4 Mt/y formerly 1.5-1.6 Mt/y. Uzbekistan and Turkmenistan: relatively small producers. Production has grown steadily at oil refineries. 31
China International Sulphur&Sulphuric Acid Conference(211) Asia/Oceania: Middle East and East Asia had the strongest production growth of all regions. 12 UAE Qatar Kuwait Saudi Arabia Iran Other ME Middle East: The UAE, Saudi Arabia and Qatar all increased output by >1. Mt. East Asia: China s production rose from <3 kt in 2 to almost 3. Mt in 21. 1 8 6 4 2 2 22 24 26 28 21 World brimstone consumption grew by 11.1 Mt, 2-21, but there were declines in 28-9. By far the strongest growth was 6 Americas Africa/ME Other Asia/Oceania Europe/FSU East Asia in East Asia (+9.8 Mt), followed by Africa and the FSU (+1.5 Mt each). Consumption was lower in 21 than in 2 in North America (- 1.4 Mt) and Europe (-.9 Mt). 5 4 3 2 1 2 22 24 26 28 21 32
China International Sulphur&Sulphuric Acid Conference(211) World phosphate fertilizer consumption rose by 4.6 Mt P 2 O 5, 2-21. Consumption peaked in 27, fell in 28-29 but rallied in 21, supported by exceptionally high grain prices. Asia dominates demand, especially China and India. Demand grew at a CAGR of 2.2% 2-27 but only 1.3% 2-21. (million tonnes P2O5) 4 3 2 1 Americas Asia/Oceania Europe/FSU/Africa 2 22 24 26 28 21 Acid use in ore leaching has grown significantly but is still a small percentage of total demand. 21 acid use (Mt H 2 SO 4 ): Copper: 11.3 Mt Nickel: 3.4 Mt Uranium: 3. Mt Total: 17.7 Mt % of world acid use: 8.4% 33
China International Sulphur&Sulphuric Acid Conference(211) China has become by far the world s largest sulphur importer. (thousand tonnes) 14 12 1 8 6 4 2 29 imports (Mt): China 12.2 Morocco 2.6 USA 2.1 Tunisia 1.5 India 1.5 Brazil 1. 29: 1.2 Mt added to port stocks. FSU/Other Asia/Oceania Americas Middle East 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 1995 The Sulphur Market Balance, 1995-21 5 4 Cumulative surpluses 1992-24: 22 Mt. 3 2 1-1 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 34
China International Sulphur&Sulphuric Acid Conference(211) Part 2: The market outlook Supply. Demand. Balance. Brimstone production grows by 21.8 Mt, 29-215. Strongest growth is in Middle East (+7.8 Mt), FSU (+6.2 Mt) and East Asia (+4.8 Mt). Growth from gas is 13.1 Mt, oil 6.7 Mt, other recovered 1.7 Mt. 8 7 6 5 4 3 2 1 North America FSU RoW Middle East East Asia 2829 21211212213214215 35
China International Sulphur&Sulphuric Acid Conference(211) Middle East production grows by 7.8 million tonnes, 29-215. Major increases in Saudi Arabia (+2.7 Mt), UAE (+2.4 Mt), and Qatar (+1.6 Mt). 2 15 UAE Qatar Kuwait Saudi Arabia Iran Other ME Mishraq sulphur mine in Iraq to re-open late 212,.25-.5 Mt/y capacity. Mega-projects can be subject to delays but they will go ahead. 1 5 28 29 21 211 212 213 214 215 Gulf States sulphur export availability rises by 6.2 Mt, 29-215. 36
China International Sulphur&Sulphuric Acid Conference(211) FSU: +4.5 million tonnes. Tengiz Future Growth Project: no additional sulphur. Sulphur from gas Kashagan on stream Q4 212. Sulphur capped at 3,8 t/d. South Yolotan in Turkmenistan: Phase 1 on stream in 213, ~.8 Mt/y sulphur capacity. Minor growth in Russia (Orenburg) and Uzbekistan. North America: +.5 million tonnes. Canadian production from gas declines 1.6 Mt. Output at oil sands plants rises 1. Mt. Sulphur recovery at US oil refineries rises by 1.1 Mt. Small decline from gas. 37
China International Sulphur&Sulphuric Acid Conference(211) Brimstone consumption grows by 19.9 Mt, 29-215. Strongest growth is in East Asia, Africa, Middle East and Latin America. Largest consuming regions in 215 are East Asia, N America, Africa, FSU, the Middle East and South America. 8 7 6 5 4 3 2 1 Americas Africa/ME Other Asia/Oceania Europe/FSU East Asia 282921211212213214215 Phosphate fertilizer demand rises by 9.7 Mt P 2 O 5, 29-215 (CAGR 4.1%), but from a low base. Strongest growth is in Latin America (Brazil), Asia (China and India) and North America (USA). 5 4 Americas Asia/Oceania Europe/FSU/Africa In 215, China + India + Brazil = 26. Mt P 2 O 5 = 58% of world demand. Relatively weak growth in most other countries/regions. (million tonnes P2O5) 3 2 1 282921211 212213214215 38
China International Sulphur&Sulphuric Acid Conference(211) Chinese brimstone imports fall in 21-212, but then start to rise again. 2 Imports Production Stock build Demand 18 16 million tonnes 14 12 1 8 6 4 2 27 28 29 21 211 212 213 214 215 The Sulphur Market Balance, 1995-215 5 4 3 2 1 215 is when the problems begin. -1 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 39
China International Sulphur&Sulphuric Acid Conference(211) Conclusions: At the global level, the sulphur market will be reasonably close to balance in the period to 214, moving into large supply surplus from 215 onwards. The Middle East will be the major sulphur supplier to world markets. On the demand side, China, India and Brazil will continue to be of huge importance, directly or indirectly. The situation of over-supply that has been predicted for some time has been delayed: it has not been cancelled. Thankyou Mike Kitto CRU 31 Mount Pleasant London, WC1X AD Tel: +44 2 793 213 Email: mike.kitto@crugroup.com Web: www.crugroup.com 4