Global Fertilizer Outlook - 4

Slow New Supply Affects Sulfur Market

Russ Quinn
By  Russ Quinn , DTN Staff Reporter
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Global sulfur consumption is set to increase slightly from 2018 to 2020. Sulfur consumption in 2018 was estimated at 64.7 million metric tons and is forecast to increase to 68 mmt by 2020. (Chart courtesy of Claira Lloyd, Argus Media Limited)

JACKSONVILLE, Fla. (DTN) -- Much like the global forecast for other fertilizers, sulfur fertilizer's outlook appears to be well-balanced in supply and demand in the next few years. However, new supply being slow to enter the market can cloud this outlook.

Claira Lloyd, sulfur editor for Argus Media based in London, told attendees of the 2018 Fertilizer Outlook and Technology Conference recently in Jacksonville, Florida, that more of the "yellow stuff" is coming onto the market, but delays and unexpected outages are a constant issue. In addition, new demand is coming, but is limited to only a few regions of the world.


Lloyd said Argus estimates total global elemental sulfur capacity at 65.5 million metric tons (mmt) for 2018, and this should remain roughly the same by 2020.

Total global sulfur consumption for 2018 is pegged at 64.7 mmt, with 63% of the market manufacturing fertilizer, 31% industrial uses and 6% metals.

The total global sulfur consumption is expected to grow to around 68 mmt in 2020 with roughly 43.7 mmt for fertilizer use, she said. Fertilizer would account for 65% of total sulfur consumption, while industrial would be at 29% and metals at 6%.

Global sulfur prices in 2018 initially dropped from the high seen in November 2017, Lloyd said, but then prices continued to climb for most of 2018, only to see some weaker prices this fall. This was due to weak demand and concluded business from around the world.

Lloyd said higher prices in 2017 caused demand in 2018 to lessen some, but in most of the world, sulfur fertilizer demand is likely to rebound into 2019.

Various areas of the world, including Asia, South America and Africa, are helping lead the increased demand. Asia is expected to have sulfur demand of 25.5 mmt in 2018 and about 27 mmt in 2019. South America will see demand jump from 5 mmt in 2018 to 5.2 mmt in 2019, and Africa expects demand to rise from 8.8 mmt in 2018 to 9.5 mmt in 2019.

Lloyd said North America will see a rise in sulfur demand from 10.5 mmt in 2018 to near 10.8 mmt in 2019. Other regions of the world such as Russia, the Middle East and Eastern Europe could see some increasing demand.

Demand highlights include fertilizer companies investing in South America, India attempting to limit dependency on sulfur imports by increasing domestic production, and changes in supply in China.

"The U.S. tariffs removes up to 300,000 mmt a year from the supply chain, and the Iranian sanctions increase chartering difficulties and increase freight on sulfur," Lloyd said. "These sanctions also limit the financing for sulfur purchases."


To meet growing world demand, regional production of sulfur is also increasing. Every region of the world is expected to see a jump in production from 2018 to 2019, but in many locations, the increase is fairly small, she said.

While sulfur production is expected to increase from 2018 to 2019, Lloyd did say there are some questions that could cause this expected production not to make it to the market.

India is bringing more sulfur to its market, roughly 40,000 metric tons a month. Only about 10,000 mt of this production is earmarked for the domestic Indian market. This additional supply could very well be purchased by China, as there are competitive freight rates between the two nations, she explained.

Another question mark Lloyd brought up is how much production Russia/East Europe can contribute to the world market. The country was plagued with production problems in 2017, and these issues, along with logistical issues, have lingered in 2018, she said.

Russia/East Europe sulfur production is expected to increase from 13.5 mmt in 2017 to 17.9 mmt in 2021, but that estimate could be approximately 1 mmt lower because of possible logistical and weather issues, she said.

"Will this continue? That is the big question mark," she said, noting no real answer may be found until the second quarter of 2019.

Another question in world sulfur production is Iran. As mentioned before, the U.S. sanctions on Iran affected sulfur exports because of financing and chartering issues.

If these issues persist, this could affect Iranian sulfur production projects. This is something we need to keep an eye on, Lloyd said.


Beyond 2019, the global sulfur production from 2020 to 2025 will increase slightly over the five-year period. Global production is expected to increase from 72 mmt in 2020 to 75 mmt in 2025, she said.

Kuwaiti and Qatari will increase their market share as the Middle East will increase its production from 21.7 mmt to 23.4 mmt during this time. Half of the world's sulfur production comes from this one region alone, she said.

Lloyd also said Chinese production will boost Asia's supply position, increasing to just under 19 mmt by 2025, making it the second-leading sulfur-producing region. North America will be the third-largest producer with production increasing slightly from 14 mmt in 2020 to 14.85 mmt in 2025.

Global demand is also expected to increase slightly from 2020 to 2025, from 72 mmt in 2020 to 72.9 mmt in 2025. The region forecast with the largest demand growth is Africa, as the continent could see an increase of 1.8 mmt from 2020 to 2025.

"There is new demand coming, but it is very regionally localized and in pockets in North Africa and Saudi Arabia on the whole at present time," she said.

Lloyd said sulfur demand in North America could actually see a slight decrease during the time frame of 2020 to 2025.

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Russ Quinn