News
26/09/15
US eyes incentives to curb sulfur exports
US eyes incentives to curb sulfur exports
Houston, 15 September (Argus) — US government agencies are exploring how to cut
domestic transportation costs to incentivize Gulf coast refiners to export less
sulfur and route the product toward phosphate fertilizer production, US
Department of Agriculture (USDA) deputy secretary Stephen Vaden told Argus in an
exclusive interview. US refiners, who produce sulfur as a byproduct, have been
more inclined to export sulfur with other major global supply points cut off by
the closure of the strait of Hormuz , driving prices to record highs and causing
phosphate producers to reduce output. Spot US Gulf sulfur pricing was
$1,000-1,050/metric tonne (t) fob last week, compared with $280-290/t fob for
the same period in 2025 and up from $500-510/t fob in early January 2026. The
USDA is working closely with the US Department of Transportation, which has
suggested utilizing railroad infrastructure for sulfur transport and to provide
the necessary incentives to keep sulfur in the US, Vaden said. "And to not only
keep the sulfur that we already produce here (...) but to allow it to be
transported via rail in such a way that it doesn't have to be remelted when it
reaches our domestic fertilizer plants," Vaden said. Sulfur flowing from Gulf
coast refineries is usually in molten form and transported by rail, truck or
occasionally barges within the domestic market, while imported sulfur usually
needs to be re-melted from granular or prilled form. But it is possible that if
there is an issue with temperature control or delays in unloading, molten sulfur
could solidify during transportation. A proposal is currently being discussed
with multiple domestic fertilizer companies to see how to limit sulfur exports
and possibly alter the issue of sulfur affordability given the global supply
crunch that has sent prices higher. Argus understands that US government
officials are initially focusing on lowering transportation costs of sulfur via
rail, but no other details have been confirmed. But one source indicated that,
with multiple government agencies involved in addressing domestic sulfur
concerns, there is a significant push to address these issues. This proposal
would not be something that would solve the issue of sulfur supply and pricing
tomorrow, Vaden said, but it is something that if carried out could resolve any
sulfur-related issues within the next two years. Other strategies suggested by
market participants include the creation of an incentive or program that would
reduce the sales price of sulfur or alternatively a potential government funding
program similar to in India, where producers have their cost of sulfur
financially subsidized. US phosphate producers have been vocal recently about
elevated input costs hindering finished phosphate fertilizer production. Mosaic,
the leading US producer, reduced output earlier this year across its Florida
facilities and idled phosphate production at its Faustina plant in Louisiana.
Global producers such as Morocco's OCP are also operating production at reduced
rates because of sulfur costs. It is not known to what extent some major players
are involved in the government's proposal. But Mosaic did tell Argus that
keeping more sulfur available for domestic producers would help strengthen US
agricultural supply chains. Still, some market participants pointed out that US
sulfur supply availability is not the issue. North America produces twice as
much sulfur as it needs, and the biggest issue right now with phosphate
production is sulfur pricing, so if incentives for refineries that reduce sulfur
pricing can be introduced, that would be beneficial, a source said. Other
sources expressed concern that, if sulfur pricing becomes regulated or
subsidized, other aspects of the fertilizer production chain could fall under
government regulation as well. More recently, a handful of lawmakers from
Florida, where the majority of Mosaic's production is located, addressed a
letter to President Donald Trump and Department of Commerce secretary Howard
Lutnick highlighting that historically higher sulfur prices since the start of
the Mideast Gulf conflict have led to a downturn in domestic phosphate
production. The letter demanded coordinated action from the US government to
address sulfur supply disruptions and sulfur affordability, and that if farmer
input costs continue to place pressure on the agriculture industry, food
production could be impacted. By Taylor Zavala Send comments and request more
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