Suppression of sulphur rally requires policy reins
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At present, the policy factors affecting the sulfur market are mainly the following:
The first is the tariff policy. There are two major tariff policies involving sulfur in 2008. One is that the phosphate fertilizer and sulfuric acid are increased or the export tariff is imposed. The provisional export tariff is 20% for the first and fourth quarter of ammonium phosphate, 30% for the second and third quarters, and the export tax rate is 5% for the sulfuric acid. Set tariffs. The second is to impose tentative tariffs on the import of sulphur and adjust the tax rate to zero.
Sulfur is basically used to produce sulfuric acid, and sulfuric acid has 3/4 for the production of phosphate fertilizer. The provision of temporary tariffs on the export of sulphuric acid will help reduce the domestic export of sulphuric acid, increase domestic sulphuric acid resources, and directly reduce the demand for sulphur. Increasing the ammonium phosphate export tariff and reducing the amount of ammonium phosphate exports can also indirectly reduce the demand for sulfur. The introduction of zero tariffs on sulphur imports will reduce the cost of imported sulphur, and will also help reduce sulphur prices. Therefore, adjustments to tariff policies will slow the growth in demand for sulfur.
The second is emission reduction policies. China's natural sulfur mineral resources are limited, but high-sulfur natural gas, high-sulfur coal, and imported high-sulfur oil resources are very large, while sulfur dioxide is the two key monitoring projects for the country to reduce pollutant emissions. With the country’s increasingly strict control over sulfur dioxide emissions and sulfur content of oil products, it will prompt the natural gas, coal, and petroleum refining industries to launch sulfur recovery units to increase the recovery of sulfur; currently, the high price of sulfur is also the company’s sulfur recovery. Increased economic drivers. Therefore, the strengthening of emission reduction policies will help increase domestic sulfur resources.
The third is the price policy. On January 9th, the State Council held an executive meeting to study and deploy and maintain price stability. It required to maintain the stability of fertilizer prices such as urea and phosphate fertilizers; it decided to organize special inspections on prices of fertilizers and other agricultural materials to standardize price behavior. At the same time, the meeting pointed out that if the price of chemical fertilizers needs to be adjusted due to rising costs, it must be reported to the government's price authority for approval. It can be foreseen that the policy of strictly controlling the price of chemical fertilizers will block the transmission of high sulfur prices downstream and inhibit the continued rush of sulfur prices.
In addition, the current price of sulphur has risen to “astronomical priceâ€, and the external disk has increased from more than 70 US dollars at the beginning of last year to more than 600 US dollars, an increase of 89 times; the highest intranet price has exceeded 5,000 yuan, and it has basically reached the limit of the lower reaches. At present, China is the country with the highest price of sulfur in the world, and there is little room for further substantial increase in the next step.
However, due to the high prices of external disks, many domestic large-scale phosphate fertilizer plants have been put into operation, and the demand for sulfuric acid has grown strongly. The current pattern of sulfur supply is still difficult to change. Therefore, in the first half of this year, especially in the first quarter, sulfur will remain high. After the middle of the year, various policy factors will play an increasingly important role. The supply and demand of sulfur are expected to be balanced, and the situation of soaring prices will be eased.