Global Sulphur Market Outlook

Dr. Peter Harrisson

Consultant, Sulphur and Sulphuric acid
t: +44 207 903 2249
e: peter.harrisson@crugroup.com
Discussion overview

Global Market Overview

Forecast to 2017
Supply Overview
North America
Middle East
CIS
China
Demand Overview
Phosphates
Nickel Leaching
Balance
2
Recovered
(Oil/Oil
sands)
48%
Recovered
(Gas)
49%
Recovered
(Other)
2%
Mined
1%
2012 Sulphur Production
79,4
83,5
85,4
0
20
40
60
80
100
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Global SAF Supply
Sulphur SOF Pyrites
Sulphur-in-All-Forms (SAF) supply dominated by
involuntary production
Brimstone(64%)
Smelter acid (SOF) (29%)

Voluntary production - Pyrites (7%)
Oil and gas are main brimstone sources (97%)
Other (coal gasification, etc.) (2%)
Mined sulphur (1%)
Phosphates Outlook
A healthy market on the horizon?
3
80,0
83,2
85,00
0
20
40
60
80
100
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Global Sulphur Demand
Phosphoric Acid Ammonium Sulphate SSP Metals Leaching Non-Acid Industrial Acid
SAF demand dominated by fertilizer production
Phosphoric acid, SSP, Ammonium Sulphate (56%)

Base metals production and industrial uses also important (32%)
Phosphates Outlook
A healthy market on the horizon?
4
-3
-2
-1
0
1
2
3
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Global Sulphur Balance
0
50
100
150
200
250
300
U
S
$
/
t

Sulphur Price Developments
ADNOC
monthly
Vancouver fob
(contract)
Sulphur Balance and Prices
5
All quantities in million tonnes
* Full year estimates
Exports
Imports
5.6
Canada
1.8
USA
10.0
Middle East
6.2
CIS
1.1
Japan
2.6
Europe
2.1
10.9
3.8
2.9
1.0
1.8
1.1
Key Sulphur trade routes (2012*)
Total trade 31 million tonnes
6
0
200
400
600
800
1 000
1 200
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
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Russia Middle East Europe ROW
Quarterly Moroccan sulphur imports by origin, 2011 - 2012
Moroccan quarterly sulphur imports
Down by 40% y-o-y
7
SUPPLY FORECAST TO 2017
8
9
52.8
72.9
0
20
40
60
80
2011 2012 2013 2014 2015 2016 2017
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USA Canada Russia China Saudi Arabia UAE Kazakhstan Rest of the World
Global sulphur production by country, 2011 - 2017
Global sulphur supply outlook, 2011 -2017
10
-2 0 2 4 6 8 10
South East Asia
Western Europe
Central Europe
Africa
South Asia
Central America
South America
North America
East Asia
CIS
Middle East
Million tonnes
Oil sands Mined sulphur Gas Oil Other
Global incremental changes to supply by source, 2012 - 2017
Global sulphur supply outlook, 2011 -2017
Regional Production stable at 15 Mt/y

United States of America
Sulphur output to grow by 1.2 Mt
Increases from oil refining activities
(majority of production in PADD 3)

Canada
Alberta gas fields depleting
British Colombia production stable (0.8 Mt/y)
Increases from Alberta oil sands (+0.8 Mt)
Destocking in Oil sands region would be high cost



Vancouver
Edmonton
Calgary
Fort McMurry
PADD 3
British
Colombia
Alberta
Houston
2000 2010
Total 12.3 Mt Total 11.7 Mt
71
%
29
%
21
%
79
%
Gas Plants Oil Sands
Alberta Stocks
11
North American sulphur supply, 2011 -2017
Tampa
12
Middle East sulphur supply, 2011 -2017
Qatar
2011 2.0 Mt/y
2017 2.8 Mt/y
Iran
2011 1.7 Mt/y
2017 2.1 Mt/y
UAE
2011 2.2 Mt/y
2017 6.0 Mt/y
Saudi Arabia
2011 3.5 Mt/y
2017 6.7 Mt/y
CIS +4.3 Mt (2011-2016)
New producers are the key to growth
Russia
5.8 Mt to 6.8 Mt (20112017)
Output from gas stable at 5.8 Mt/y (2011)
Norilsk Nickel producing 1.0 Mt/y (2016-17)

Kazakhstan
Tengiz to produce 2.3 Mt/y
Kashagan expected on-stream (mid-2013)
1.2 Mt/y by 2016

Turkmenistan
South Yolotan on-stream (2013)
2.6 Mt/y by 2016



Norilsk
Kashagan
Tengiz
South Yolotan
Astrakhan
Kazakhstan
Turkmenistan
Russia
2011 2017
6
.
8

5
.
6

2011 2017
3
.
5

2
.
3

2011 2017
2
.
4

0
.
2

13
14
China sulphur supply, 2011 -2017
Sichuan gas fields drive sulphur production growth
0
2
4
6
8
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Other Regions (combined) Eastern Region South Western Region
FORECAST
Sichuan Gas
DEMAND FORECAST TO 2017
15
Phosphates Outlook
A healthy market on the horizon?
Africa
Middle East
Asia
South
America
Mor oc c o
1.6 Mt /y
Tuni si a 0.1
Mt /y
Al ger i a
0.3 Mt /y
Saudi
Ar abi a
0.6 Mt /y
Jor dan
0.5 Mt /y
Vi et nam
0.1 Mt /y
I ndi a
0.2 Mt /y
Chi na
0.6 Mt /y
Br azi l
0.8 Mt /y
Venezuel a
0.1 Mt /y
Phosphori c Aci d Capaci ty Growth (2011 - 2017)
Million tonnes P
2
O
5
Morocco
OCP J orf Phosphate Hub expansions
Total sulphur demand 5.0 Mt/y by 2017

Saudi Arabia
Further expansion at Maaden
Total 1.7 Mt/y sulphur demand by 2017

Brazil
Salitre (2013) 0.3 Mt/y sulphur demand
Expansion at Catalao (+0.1Mt) from 2013


16
17
0
500
1 000
1 500
2 000
2 500
3 000
2010 2011 2012 2015 2017
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Minara Resources (Australia)
Moa Nickel (Cuba)
VNC (New Caledonia)
Ambatovy (Madagascar)
Ravensthorpe (Australia)
Highlands Pacific (Papua New Guinea)
Acoje (Philippines)
Sulphur demand from 0.6 Mt to 3.0 Mt (2011 2017)
Annual nickel leach demand growth ~0.4Mt/y vs. annual sulphur supply growth ~4.0Mt/y
Nickel Leaching Outlook
New markets for sulphur exporters
SULPHUR BALANCE TO 2017
18
-4
-2
0
2
4
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Global Sulphur Balance 2010 - 2017
19
20
Global Market
Supply growth to outpace demand growth
New production dominated by Middle East and FSU
Delays less likely as large projects move closer to commissioning

Demand growth
Phosphate demand will recover from 2013
Nickel leaching demand is strong but growth is not unlimited

Sulphur balance will move into surplus
Producers will need to withhold product from the market
But which producers will act?

Global oversupply is coming; can demand catch up?
Conclusions
Dr. Peter Harrisson
Consultant, Sulphur and Sulphuric acid
t: +44 207 903 2249
e: peter.harrisson@crugroup.com
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