Bullish Market for Liquid Sulphur Dioxide in June 2024: Rising Demand and Supply Challenges in the US and Europe

Despite the decline in production costs, the US and European markets for Liquid Sulphur Dioxide witnessed an upward trend in June 2024. This bullish market scenario was driven by increased demand from downstream agrochemical enterprises and the summer driving season. Additionally, tensions in the Middle East contributed to the market's upward trend over a potential escalation in the conflict between Israel and Hizbollah, further fueling the surge in demand and price of Liquid Sulphur Dioxide.

In June 2024, the US market for Liquid Sulphur Dioxide witnessed a rise in prices as refineries ramped up production for the summer driving season and concerns grew over Middle East tensions. However, the supply tightness of Liquid Sulphur Dioxide in the western US eased with a Canadian supplier resuming normal operations after a mid-May interruption, prompting market players to stock up in preparation for increased demand for Liquid Sulphur Dioxide. The American Automobile Association projected a record 7 million travellers for the July 4 holiday week, the highest since before the Covid pandemic, leading to heightened trading activities and price increases. In terms of the upstream market, the US Energy Information Administration reported a significant 12.2 million barrel drop in commercial crude oil inventories, now 4% below the five-year average, as refineries boosted fuel production for the anticipated surge in summer travel.

Similarly, in European nations, Liquid Sulphur Dioxide experienced an upward trend, driven by ongoing maintenance shutdowns at key smelters. The Aurubis Hamburg smelter is set to resume production in early July 2024, while KGHM's Glogow smelter will undergo maintenance starting in mid-August, and Atlantic Copper's Huelva smelter will begin maintenance in late September. These shutdowns have led to limited spot availability of Liquid Sulphur Dioxide in the domestic market. Despite a 4.87% decline in Sulphur prices, which reduced production costs, the supply of Liquid Sulphur Dioxide remained insufficient to meet demand from downstream sectors due to the maintenance activities. Consequently, the price spread between Sulphur and Liquid Sulphur Dioxide widened, reflecting a bullish market scenario for the commodity.

According to ChemAnalyst, the Liquid Sulphur Dioxide market in North America and Europe is expected to remain bullish. In the US, prices may rise due to increased demand from the downstream sector due to the summer driving season and potential disruptions from Hurricane Beryl, which could affect the supply chain if it reaches the Gulf of Mexico, although its exact path is uncertain. In Europe, domestic supplies of Liquid Sulphur Dioxide are anticipated to be tight from July to August due to ongoing maintenance at key smelters, but the supply balance is expected to improve later in the quarter as these smelters resume operations.