the sulphur market outlook - ccfeiproduction growth has come from us oil refineries and canadian oil...

The Sulphur Market Outlook

Mike Kitto

Principal Consultant – Sulphur

CRU

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China International Sulphur&Sulphuric Acid Conferen ce(2011)

The sulphur market outlook

Mike KittoCRU, UK.

Part 1: Recent market trends

• Supply.

•Demand.

•Balance.

• Supply.

•Demand.

•Balance.

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World brimstone production grew by 8.7 Mt, 2000-2010.

0

10

20

30

40

50

60

2000 2002 2004 2006 2008 2010

(mill

ion

tonn

es)

Americas Europe/FSU/Africa

Asia/Oceania

• Americas: North American output has fallen in each year since 2004.

• 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).

North America: Production from sour gas is in decli ne and the focus is now on shale gas.

Alberta gas 2010:

lowest since 1968 .

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Production growth has come from US oil refineries a nd Canadian oil sands, but the rate has slowed.

1995-2004:CAGR 4.7%

Hurricanes Katrinaand Rita

FSU: Production has grown by 2.7 Mt, principally fr om gas in Kazakhstan and Russia.

• Russia: Astrakhan normally 4.7 Mt/y but cut to 3.8 Mt in 2009. Orenburg 1.1 Mt/y.

• 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.

Sulphur from gas

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Asia/Oceania: Middle East and East Asia had the str ongest production growth of all regions.

0

2

4

6

8

10

12

2000 2002 2004 2006 2008 2010

(mill

ion

tonn

es)

UAE Saudi ArabiaQatar IranKuwait Other ME

• Middle East: The UAE, Saudi

Arabia and Qatar all increased

output by >1.0 Mt.

• East Asia: China’s production

rose from <300 kt in 2000 to

almost 3.0 Mt in 2010.

World brimstone consumption grew by 11.1 Mt, 2000-2010, but there were declines in 2008-09.

0

10

20

30

40

50

60

2000 2002 2004 2006 2008 2010

(mill

ion

tonn

es)

Americas Europe/FSUAfrica/ME East AsiaOther Asia/Oceania

• By far the strongest growth was

in East Asia (+9.8 Mt), followed by

Africa and the FSU (+1.5 Mt each).

• Consumption was lower in 2010

than in 2000 in North America (-

1.4 Mt) and Europe (-0.9 Mt).

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World phosphate fertilizer consumption rose by 4.6 Mt P2O5, 2000-2010.

0

10

20

30

40

2000 2002 2004 2006 2008 2010

(mill

ion

tonn

es P

2O5)


Asia/Oceania

• Consumption peaked in 2007, fell in 2008-2009 but rallied in 2010, supported by exceptionally high grain prices.

• Asia dominates demand, especially China and India.

• Demand grew at a CAGR of 2.2% 2000-2007 but only 1.3% 2000-2010.

Acid use in ore leaching has grown significantly bu t is still a small percentage of total demand.

2010 acid use (Mt H 2SO4):

• Copper: 11.3 Mt

• Nickel: 3.4 Mt

• Uranium: 3.0 Mt

• Total: 17.7 Mt

• % of world acid use: 8.4%

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China has become by far the world’s largest sulphur importer.

0

2000

4000

6000

8000

10000

12000

14000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

(thousand tonnes)

FSU/Other

Asia/Oceania

Americas

Middle East

2009: 1.2 Mt added toport stocks.

2009 imports (Mt ):China 12.2Morocco 2.6USA 2.1Tunisia 1.5India 1.5Brazil 1.0

The Sulphur Market Balance, 1995-2010

-1

0

1

2

3

4

5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

(mill

ion

tonn

es)

Cumulative surpluses 1992-2004: 22 Mt.

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Part 2: The market outlook

• Supply.

• Demand.

• Balance.

Brimstone production grows by 21.8 Mt, 2009-2015.

0

10

20

30

40

50

60

70

80

20082009 201020112012201320142015

(mill

ion

tonn

es)

North America Middle EastFSU East AsiaRoW

• 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.

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Middle East production grows by 7.8 million tonnes, 2009-2015.

0

5

10

15

20

2008 2009 2010 2011 2012 2013 2014 2015

(mill

ion

tonn

es)

UAE Saudi ArabiaQatar IranKuwait Other ME

• Major increases in Saudi Arabia (+2.7 Mt), UAE (+2.4 Mt), and Qatar (+1.6 Mt).

• Mishraq sulphur mine in Iraq to re-open late 2012, 0.25-0.50 Mt/y capacity.

• Mega-projects can be subject to delays but they will go ahead.

Gulf States’ sulphur export availability rises by 6. 2 Mt, 2009-2015.

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FSU: +4.5 million tonnes.

• Tengiz Future Growth Project: no additional sulphur.

• Kashagan on stream Q4 2012.Sulphur capped at 3,800 t/d.

• South Yolotan in Turkmenistan: Phase 1 on stream in 2013, ~0.8 Mt/y sulphur capacity.

• Minor growth in Russia (Orenburg) and Uzbekistan.

Sulphur from gas

North America: +0.5 million tonnes.

• Canadian production from gas declines 1.6 Mt. Output at oil sands plants rises 1.0 Mt.

• Sulphur recovery at US oil refineries rises by 1.1 Mt. Small decline from gas.

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Brimstone consumption grows by 19.9 Mt, 2009-2015.

0

10

20

30

40

50

60

70

80

20082009201020112012201320142015

(mill

ion

tonn

es)

Americas Europe/FSUAfrica/ME East AsiaOther Asia/Oceania

• Strongest growth is in East Asia, Africa, Middle East and Latin America .

• Largest consuming regions in 2015 are East Asia, N America, Africa, FSU, the Middle East and South America.

Phosphate fertilizer demand rises by 9.7 Mt P 2O5, 2009-2015 (CAGR 4.1%), but from a low base.

0

10

20

30

40

50

2008200920102011 2012201320142015

(mill

ion t

onne

s P

2O5)


Asia/Oceania

• Strongest growth is in Latin America (Brazil), Asia (China and India) and North America (USA).

• In 2015, China + India + Brazil = 26.0 Mt P2O5 = 58% of world demand.

• Relatively weak growth in most other countries/regions.

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Chinese brimstone imports fall in 2010-2012, but th en start to rise again.

0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010 2011 2012 2013 2014 2015

mill

ion

tonn

es

Imports Production Stock build Demand

The Sulphur Market Balance, 1995-2015

-1

0

1

2

3

4

5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(mill

ion

tonn

es)

2015 is when the problems begin.

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• At the global level, the sulphur market will be rea sonably close to balance in the period to 2014, moving into large supply sur plus from 2015 onwards.

• The Middle East will be the major sulphur supplier t o world markets.

• On the demand side, China, India and Brazil will co ntinue to be of huge importance, directly or indirectly.

• The situation of over-supply that has been predicte d for some time has been delayed: it has not been cancelled.

Conclusions:

ThankyouMike Kitto

CRU

31 Mount Pleasant

London, WC1X 0AD

Tel: +44 20 7903 2130

Email: [email protected]

Web: www.crugroup.com

the sulphur market outlook - ccfeiproduction growth has come from us oil refineries and canadian oil...

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