Global sulfur prices likely to react slowly if Strait of Hormuz reopens: sources

Sulfur traders and buyers across global markets have adopted a cautious, wait-and-see stance as the US and Iran continue peace talks. However, market players say any price correction following the resumption of traffic through the Strait of Hormuz is unlikely to be immediate, as physical availability remains tight and supply chains are still far from normalized.

The Strait of Hormuz is central to the current sulfur market disruption, as the Middle East is a major source of sulfur linked to oil and natural gas production; the waterway accounts for roughly 50% of all global sulfur seaborne exports, according to S&P Global Energy CERA data.

Downstream exposure has made the sulfur market especially sensitive to any change in Hormuz logistics. Even if ships can begin moving again, market participants said the backlog of delayed cargoes, damaged infrastructure, contract commitments and handling constraints mean that supply will not immediately translate into freely available spot tonnage.

"Any price easing is unlikely to be immediate, as the current market is still tight," a trader in Northeast Asia said, while also citing persistent logistical and handling constraints.

Similarly, a trader in Southeast Asia said that even if the Strait reopens, "it will take time for supply chains to fully normalize before any meaningful easing of market pressures is felt."

The cautious tone reflects the difference between market sentiment and physical supply. Talks about a potential reopening of the Strait have shifted price expectations lower, but participants said the market has yet to see enough new cargo availability or completed spot business to confirm a real price correction.

Platts, part of S&P Global Energy, assessed spot granular sulfur CFR China at $999/metric ton on June 18, rising from the $519-$522/mt assessment on Feb. 26, before the war in the Middle East began.

Middle East, Americas see slightly bearish tone

Market players in the Middle East expressed similar views, with some expecting lower prices but noting that actual activity remained limited.

"We have seen some bearish movement on sulfur prices following the news, but there is still no movement or new deals emerging," a regional producer said.

Contract cargoes that have been stuck behind the Strait would likely be prioritized before any spot business is concluded, the producer said, adding that spot cargo movement could take "three to four months" to recover, suggesting that the market could remain structurally tight even after a formal reopening.

Platts assessed the FOB Middle East spot sulfur price, excluding Iran, at $845-$850/metric ton on June 18. Comparatively, FOB Middle East, excluding Iran was assessed at $495-$500/metric ton on Feb. 26, before the war began.

A Europe-based trader said the immediate change was more psychological than physical, with lower price ideas emerging without evidence of lower concluded deals.

"Even if the war stops, there is still a product problem," the trader said. "Lots of refineries got damaged, and most of the products are contracted already."

In the Americas, market participants also adopted a cautious stance, with buyers refraining from taking new positions while awaiting more clarity.

Lower price expectations emerged in the North American market, but a meaningful shift would take time to materialize, a source based in North America said.

"We don't know if prices will collapse, refineries will need some time before getting back," the source said.

Buyers in Brazil were also waiting for a clearer direction, with no new business confirmed, according to a sixth market source.

In the Americas, Platts assessed FOB US Gulf sulfur at $1,060/mt and CFR Brazil at $1,200/mt on June 18. Comparatively, Platts assessed sulfur on the USGC at $650/mt FOB on April 2, when the assessment was launched, and assessed Brazilian prices at$525/metric ton on Feb. 26, before the war began.