2023 softness with North American output recovery

Early 2023 opened in a soft sulfur price environment after the 2022 collapse, while Argus expected elevated North American output from resilient fuel demand and Canadian bitumen processing to stabilize prices. Lost refining capacity since end-2019 still meant a full return to 2018 sulfur output was unlikely, but US Gulf availability was expected to improve as domestic consumption moderated. Vancouver export capacity discussions included the South Cheecham priller addition, with Argus suggesting potential 5-10% uplift to Vancouver-linked export capacity in 2023 subject to demand. Soft FOB kept remelt economics marginal for Alberta blocks. UNCERTAIN: how quickly Cheecham forming actually translated into incremental Vancouver loadings in H1 2023. Early 2023 opened with the market’s attention on surplus risk rather than scarcity. Argus expected resilient fuel demand and Canadian bitumen processing to lift North American sulfur availability and damp the prior two years’ volatility. Lost refining capacity since 2019 still capped a full return to older output peaks, so the outlook was stabilization, not a flood. Vancouver-linked capacity discussions around South Cheecham’s new prilling pointed to more solid export optionality later in the year even if Q1 FOB stayed soft. Remelt of remote Alberta blocks remained a high-hurdle decision while prices sat far below mid-2022 highs. Phosphate buyers that had been burned by the spike entered 2023 with leaner inventories and more patience, extending the soft tone. For Canadian logistics operators, the commercial task was to keep forming and rail utilization intact through a low-margin window so that capacity would exist when the next firm phase arrived in 2025.

Key points

• Argus viewpoint: 2023 NA sulfur output rise expected to reduce volatility after 2021-22.
• South Cheecham wet prilling cited as potential Vancouver export capacity support.
• Price environment remained far below mid-2022 highs.
• Alberta remelt stayed selective while FOB soft.
• UNCERTAIN: H1 2023 Vancouver monthly run-rate vs full-year 3.1 Mt outcome.

Sources

• Viewpoint: Sulfur volatility to wane as supply recovers (Argus)
• Port of Vancouver 2023 Statistics Overview

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Public reference summary. Weekly PRA assessments require a commercial license. Not investment advice.