Insoluble Sulphur Prices Remain Stable Amidst Firm Demand in Tyre Industry

Texas (USA): The prices of Insoluble Sulphur largely remained rangebound throughout February. This trend was due to the active supply of inventories in the market. Insoluble Sulphur manufacturers were operating at stable capacity. The demand from the Insoluble Sulphur downstream tyre industry was firm, leading to constant downstream inquiries.

A major industrial player in the tyre segment globally, Michelin, reported in its Q4 2023 press release, which was released on February 12th, 2024, that the most growing segment was the original equipment segment, while the replacement segment faced high destocking. In the North American market, the original equipment segment grew by 9% in 2023, driven by new car demand throughout the year. According to Michelin, the replacement segment remained unchanged from the year before.

Overall, the trends continue till now; the demand from the Insoluble Sulphur downstream tyre industries remains on the higher side, leading to an overall positive market outlook. As for the prices of Insoluble Sulphur feedstock, Sulphur prices in the market remained stable. Furthermore, from the energy front, the prices of Natural Gas remained on the lower end due to lower economic activity globally, leading to lower production costs of Insoluble Sulphur.

The short anticipation for the Insoluble Sulphur market in the US is that prices shall remain rangebound amid weak cost support from the Sulphur market due to an adequate supply of inventories. However, the demand from the downstream industry is expected to remain firm.

The performance of Insoluble Sulphur in the European market has largely been underwhelming. This development was predominantly due to weak performance from the Insoluble Sulphur feedstock Sulphur in the European market. Moreover, LNG costs also remained on the lower side, leading to lower cost support from the production front. Despite that, the demand from the Insoluble Sulphur downstream tyre industry has increased; however, compared to pre-pandemic levels, the performance remains subpar.

Michelin, also a major player in the tyre segment in Europe, stated in its Q4 2023 reports that throughout the year, the European market experienced an 11% increase, largely driven by favourable comparisons to the previous year. The first half saw a notable surge in demand, rising by 14% compared to the same period in 2022, which had been affected by automaker supply shortages and the onset of the conflict in Ukraine. In the latter half, the market continued its upward trend, with a 7% increase as most automakers successfully replenished their vehicle inventories. However, despite these gains, the European market concluded the year at an 18% deficit compared to 2019 levels.