This week, the sulfur market showed a divergence trend of “spot fundamentals rising, but macro/market data indicators weakening”.
1、 Market and data indicators: high-level pullback, moving average system releases adjustment signal
Price decline: As of November 9th, the benchmark price of sulfur was reported at 5151.75 yuan/ton, a decrease of 3.6% from the beginning of the month (5344.25 yuan/ton on November 1st). Especially on November 9th, the daily increase and decrease reached -2.32%, setting a record for the largest single day decline of the week.
Location assessment: Although the absolute price has fallen slightly, the table shows that the current price is at a “low level” at the 10 day, 20 day, 30 day, 60 day, and 90 day levels, and at a “medium low level” at the one-year level. This indicates that the current decline is a high-level correction after the previous rise, rather than a collapse of the long-term trend.
Technical signal: From the line chart, it can be seen that the price moving average began to turn downwards after reaching a temporary high on November 5th, and significantly crossed the 5-day moving average and 10 day moving average on November 9th. Meanwhile, from an overall trend perspective, the short-term moving average is approaching the long-term moving average. Based on the principle of moving average, the probability of the short-term moving average crossing the medium-term moving average is increasing, which is usually seen as a signal that the market has entered a downturn or adjustment.
2、 Spot fundamentals: low inventory and rigid demand support, limited decline
Although there has been a significant decline in market data, combined with the spot market situation from previous research, the fundamentals have not completely deteriorated
Domestic port prices rise: As of November 9th, the spot reference price of granular sulfur in mainstream ports such as Zhenjiang Port remains at around 4850 yuan/ton, with even a slight increase during the week. The port inventory is about 1.1251 million tons, which is at an extremely low level compared to the same period last year (a decrease of nearly 50%), giving cargo holders some confidence in “low inventory”.
International cost suppression: Qatar’s November contract price was significantly lowered to FOB $735/ton (a month on month decrease of $100), directly suppressing domestic bullish confidence. Although the spot prices in North Africa/Indonesia are still at CFR 850-860 USD/ton, a downward trend has emerged, leading to increased wait-and-see sentiment among domestic industry players.
3、 Comprehensive analysis and future prospects
The core logic of this week’s market trend is: a significant decrease in international long-term contract prices and a technical correction in the market, which suppressed the upward trend in domestic prices caused by low inventory and rigid demand.
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