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Outlook for the worldwide sulfur market

Hydrocarbon Engineering,

Hearken back two years, when the sulfur market was poised for a bonanza. In January, 2007, the price was US$ 45/t. Within a year, according to analysts at the US Geological Survey (USGS), a combination of soaring demand in China, rail strikes and huge stranded reserves in Canada pushed the price to record levels exceeding US$ 700.

Fast forward to 2008. The world is galloping toward global recession, causing credit to dry up. China, with its storage bins bursting, bans imports. Prices immediately begin to drop, and keep going. By July, 2009, sulfur is selling at US$ 25/t. The Tampa, Florida, region, home to phosphate extraction, is accepting shipments at US$ 5/t.

Not surprisingly, petroleum producing regions now account for the majority of sulfur production. The Middle East contributes several million tpy, mostly from processing sour gas. The Former Soviet Union, China, and Caspian Sea countries are also major producers, but the two largest source countries are Canada and the US. In Canada, total production in 2008 was approximately 8 million t; 7 million t came from the petroleum industry. In the US, 2008 production of sulfur in all forms was 9.2 million t, with petroleum accounting for the lion's share of that, some 8.5 million t. Worldwide production in 2008 was in the 69 million t range.

More to come
For the last several years, consumption has been close to worldwide production. When supply exceeds demand, excess sulfur is blocked for storage. When demand outstrips supply, the blocks are remelted and shipped to market. But sulfur has a major weakness; the vast majority of production is involuntary. All over the world, crude supplies are becoming more sour as conventional fields decline and refineries must rely on heavier, sulfur laden feedstock.

The oilsands of Alberta also pose a major dilemma. Consisting of approximately 174 billion recoverable bbls of thick, tarry bitumen, the oilsands currently produce slightly over 1.2 million bpd of oil. There are .005 t of sulfur in one barrel of bitumen, resulting in the production of 1.5 million tpy of sulfur.

New uses
Clearly, if the issue of a sulfur surplus is going to be kept in hand, major new applications must be found, and soon. For instance, sulfur has potential as an additive to concrete. Elemental sulfur and polymers are mixed into concrete to create a concoction that shows very high resistance to corrosion, high strength, low water permeability and fast curing time.

The future
In the short term, the sulfur market has slowly pulled itself off the mat and is showing signs of recovery. According to Prism, FOB Vancouver was US$ 700/t in 2008, then down to US$ 100/t in Q1 2009, and US$ 50 in Q2 2009, but is about to make a comeback.

In the longer term, the sulfur market will continue to suffer from wild gyrations unless something is done to bring order to the supply and demand. Petroleum companies need to take ownership of the sulfur market before massive surpluses begin to choke off production.

Gordon Cope, Hydrocarbon Engineering Correspondent

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