India's consumption of sulphur is expected to rise in 2024, supported by new sulphur burners that will reduce the country's reliance on imports of sulphuric acid.
New sulphur burning capacity on the east coast of India is expected to lift the country's sulphur demand, with fertilizer producer Coromandel's Visakhapatnam (Vizag) burner already operational since 25 September 2023. Fertilizer producer Iffco's sulphur burner at Paradip is also expected to come on line in the first quarter of 2024. The two burners will add 400,000 t/yr of sulphur demand and produce 1.2mn t/yr of sulphuric acid when fully operational, according to Argus calculations.
Rising sulphur demand is displacing some sulphuric acid imports. India's imports of sulphur during January-September 2023 rose by 10pc from a year earlier to 1.15mn t, GTT data show, with the bulk coming from the UAE. A total of 106,800t arrived from Russia, an all-time high for India. But sulphuric acid imports during the same period fell by 3pc with fewer arrivals from China and the Philippines. Deliveries from China fell by 67pc to 127,400t, while imports from the Philippines slipped by 28pc to 109,700t.
Supply choices are ample for sulphur buyers in India, as most consumers are also able to import from non-mainstream Middle East destinations that produce relatively lower priced crushed lump sulphur compared with their granular counterparts. High domestic availability, on the back of elevated operating rates across most Indian refineries for most of 2023, may also cater to some of the new sulphur demand.
Firm demand for transportation fuels lifted crude throughput levels at refiners during April-June 2023 with strong economic growth and a late start to monsoon rains. Crude throughput at state-controlled refiner Hindustan Petroleum (HPCL) rose to a record high of 435,000 b/d during the period, up by 12pc from 387,000 b/d a year earlier after its refineries operated at 106pc of capacity. Crude throughput from fellow state-controlled refiner IOC was 1.45mn b/d during April-October 2023, exceeding its initial target of 1.42mn b/d.
Planned refinery capacity expansions from 2024 will also result in more domestic production of sulphur. HPCL is planning to expand the capacity of its Vizag refinery from 166,000 b/d to 270,000 b/d.
Argus forecasts India's total sulphur demand to rise to 3.5mn t in 2024, up by 9pc from 3.2mn t in 2023. While domestic refineries are likely to cater to this new demand, prices of sulphur relative to sulphuric acid and fertilizer prices will remain a key deciding factor for demand in 2024.
