Global production of sulfur is growing several times faster than consumption. Is the market able to cope with the oversupply of the chemical and to identify new application areas? The market players had successfully performed the breakthrough when sulfur was alleviated to the new level of full-valued commodity. Whether the stakeholders are able to meet the new market challenge or not, is a matter of keen interest.
On December 17, 2012, the Seventh International «Sulfur and Sulfuric Acid 2012» Conference was held by of Creon Energy at Hotel Baltschug Kempinski Moscow. Quest International Trading and Energokaskad Company were the Partners of the industry event; Kortes supported the Conference.
Fares Kilzie, Head of Creon Energy, welcomed the audience and noted a number of important achievements that have been accomplished by the participants of previous conferences.
«As a result of our strong consolidated efforts during the past seven years, Moscow has become the regional decision-making center for sulfur and sulfuric acid. We changed the attitude towards sulfur and its derivatives from waste product to the full-valued cluster which is acknowledged by the market and has won its own niche», Dr. Kilzie said.
He also outlined main directions for further activities. «Our seventh meeting is much affected by Russia’s accession to the WTO. Its influence on sulfur pricing mechanisms in the Russian market is a hot issue now. This is a very important point for the industry, and we will surely pay much attention to it today», said the Head of Creon Energy. Another key topic for discussion is growing oversupply of sulfur caused by continued gas and oil fields development, especially in the Far East and in Eastern Siberia. This oversupply issue should be addressed and solved.
«The audience today includes representatives of all the main market segments, so we can arrive to a comprehensive understanding of the industry developments and to find optimum solutions to existing challenges», Fares Kilzie said.
Consultant, Fertilizers, Sulfur & Sulfuric Acid at CRU Group Peter Harrison presented an overview of the global sulfur market. In 2012, global production of sulfur products (sulfur, sulfuric acid and pyrite) reached 85.4 million tons, the volume of actual sulfur production amounted to 50 million tons. There was some deficiency of sulfur in 2010-2011, but in 2012 global supply and demand balance has changed. At the moment, there is an overproduction of this chemical, therefore the price has slightly decreased and settled down around $170 per ton. The upward trend in sulfur oversupply will continue in the coming five years. However, 2013 is going to stand out of the trend, as sulfur supply and demand will be mostly balanced and even a small shortage is possible. A recovery in sulfur demand for production of phosphate fertilizers is expected. Also, the chemical is extensively used in nickel leaching but this segment has limitations in growth. Consequently stocks of sulfur will significantly expand because demand grows slower compared to production.
Regional structure of sulfur production and consumption is stable enough and will not measurably change in the coming five years. The main manufactures of the chemical are located mainly in global oil-gas production regions which are Middle East, CIS, East Asia and North America. In Russia, Kazakhstan, Turkmenistan as well as in the Middle East countries, overall sulfur production will increase resulting from growing extraction of natural resources. Key producers will need to withhold product from the market in order to rule prices and to prevent market disruption, but the question is which manufacturers will act. Long-term storage of sulfur is usual thing for Canadian and Russian producers while Middle East companies are newcomers in this topic and do not have sulfur warehouses at all.
Nikolay Motin, Head of Gas Sulfur Laboratory at Gazprom VNIIGAZ considers that Russian sulfur production is characterized by stability. In 2011, the output was 6.4 million tons, and in 2012 it will probably remain at the same level. According to the expert, sulfur in Russia is mainly supplied by gas processing enterprises, their market share is 89.2%, while oil refining and metallurgy processes provide 8.1% and 2.7% of supply respectively. Gazprom for now is a dominating sulfur producer with over 80% of total production. The main consumers of sulfur are sulfuric acid manufacturers with 89.8% share in consumption, pulp-and-paper industry with 6%, and metallurgy with 2.7%, while 4% is consumed by other industries together.
According to the speaker’s forecast, sulfur oversupply will stay at the level of 3-6 million tons per year by 2030, and in case gas production is increased at Astrakhan Gas Condensate Field, the volume of sulfur in stock may reach 9-15 million tons per year.
Development of new road construction materials based on sulfur is able to expand applications market for this product and will improve the quality of road surface. Modified sulfur can be used for preparation of sulfur-asphalt mixes. Sulfuric cement can be applied in production of sulfur-concrete mixes for products like paving slabs, curbstone, and weight blocks for pipelines.
The interest for new materials on the sulfur basis is growing now. In 2010, no more than 30 tons were used, while in the last two years this number has grown to 500 tons; the data reflects pilot projects. The number will increase after the use of these materials is adopted. The expected annual capacity of a single enterprise producing modified sulfur will stand at 30 thousand tons, producing sulfur-asphalt mix – 30 thousand tons, while for sulfur-concrete mix the annual volume will be 60 thousand cubic meters. The main limiting factor for development is the lack of regulatory system; new Russian standards (GOST) are expected to introduced in the two-years time. In the optimistic scenario, sulfur-based materials market is estimated to reach 1.5 million tons by 2030.
Nikolay Motin noted the necessity of a specialized publication devoted to sulfur in Russia. In his opinion, it will be a good promotion tool for the product and will create a stable platform for discussing the current problems and prospects of the industry.
Olga Voloshina, Head of Department at Infomine Research Group, presented the overview of sulfuric acid market in Kazakhstan. According to her data, over 1.5 million tons of monohydrate were produced in the country in 2011, and in 2012 the output volume will reach 1.7 million tons. Since 2002, sulfuric acid production has been growing; the main increase in production happened in 2008-2009, when the sulfuric acid output grew more than twice as a result of new capacities launch. Meanwhile, consumption also was growing, having increased 2.5 times since 2007; it equaled to 1.8 million tons by the end of 2011. Main monohydrate consumption markets are uranium mining (about 80% share), chemical industry (mainly phosphate fertilizers production) at about 17%, non-ferrous and ferrous metallurgy, power generation, oil refining, and electrolyte production – the remaining 3%.
Industrial consumers in Kazakhstan are experiencing shortage of sulfuric acid. Import volume has exceeded 350 thousand tons in 2011, which makes about 16% of total consumption. Russia is the largest supplier of monohydrate to Kazakhstan.
Shortage in Kazakhstan market stimulates construction of new sulfuric acid plants. As a result, sulfuric acid production is expected to increase to 3.8 million tons by 2015, having replaced import, and will reach 5,5 million tons by 2020. The market structure will also change: enterprises of non-ferrous metallurgy that have been using production off-gases as raw materials, will be replaced by the plants that are using sulfur as feedstock, as sulfur stock has been accumulated at oil and gas production facilities in Kazakhstan. The share of such plants will reach 60%.
Consumption structure will undergo changes as well: the shares of uranium mining and phosphate fertilizers will almost level. At the moment, uranium mining consumes 7 times more sulfuric acid than chemical production.
Askhat Zhakupov, Head of Material Resources Management Department at Kazatomprom, commented on the current situation in sulfur and sulfuric acid market in Kazakhstan. He confirmed that there is a shortage of monohydrate in the local market and expressed an opinion that the expansion of sulfuric acid production capacities would not be able to meet the demand of uranium enterprises. In addition, Mr. Zhakupov noted that the custom barrier is slowing down the relationships between Russia and Kazakhstan. It would be impossible to overcome this barrier without intervention by appropriate public authorities.
Anton Kanchuga, Head of Fertilizers and Basic Chemicals Editorial at Chem-Courier Information Agency, covered the specifics of Ukrainian market of sulfur and sulfuric acid. The sulfur market remains to be import-dependent. Ukrainian producers are able to satisfy the demand within the country at approximately 10% at full load of capacities. Despite this, the production of sulfur is decreasing. Significant decline in manufacturing volumes happened due to shutdown of oil refineries in Odessa and Lysychansk. Kazakhstan is the main supplier of sulfur to Ukraine.
Sulfur is mainly consumed by producers of sulfuric acid in Ukraine. As a byproduct, the monohydrate is produced only by 5 plants, with cumulative volume of no more than 7% of total output. In the consumption structure, sulfuric acid is most of all applied in production of titamium dioxide, then in uranium production and in production of phosphorus-containing fertilizers.
Olga Gopkalo, Leading Expert of Morstroytechnology Company, spoke about sea transportation options for sulfur export. According to her, the export logistics depends on the form of the chemical product. There are three commodity types of sulfur: granulated, liquid and solid. Liquid sulfur, as a rule, is supplied to the domestic market, since it is economically justified, and there are currently no exporting terminals in Russia. Granulated and solid sulfur can be transported in packages, containers or bulk. Export of packed sulfur is possible, but this transportation method is expensive. The optimum way of exporting is sea bulk transportation of sulfur. The large Russian transport hub is situated in the city of Ust-Luga (Gulf of Finland) where the European Northern Terminal is located. However, sea distances from this port to the main sales markets are longer than from the southern ports. Moreover, Ust-Luga is located far from the places of sulfur production. Buzan and Ust-Donetsk river ports are well equipped and have a geographical advantage. Apart from this, there are large transport hubs in Ukraine (Ilyichevsk and Nikolaev); Mariupol and Kerch are less popular. The main flow of sulfur export goes through Ukrainian Ilyichevsk and Russian Ust-Luga ports not only from Russia, but also from Kazakhstan.
In overall, logistics situation is sustainable at the moment. Future projects that may be interesting for sulfur logistics include construction of the specialized sulfuric terminal in the new Taman port (Sea of Azov). This port has a vast potential; the construction is scheduled to be finished by 2017.
Yury Filatov, Deputy Head of Sulfuric Acid Laboratory at the Research Institute for Mineral Fertilizers and Insectofungicides (NIUIF), made an overview of current situation and development opportunities for sulfuric acid production in the Russian Federation. Since 2010, there has been a steady growth trend in the volumes of sulfuric acid production globally. The Russian market is not an exception. In 2011, Russia stood 4th in the world in production of monohydrate, after China, the USA and Morocco.
Improvement of sulfuric acid manufacturing technologies is an important condition for increasing the volumes of production. NIUIF employees have elaborated advanced production schemes for optimizing technological processes at the enterprises. In particular, this allows to reduce the quantity of necessary equipment, to decrease energy consumption, to reduce emissions of harmful substances into the atmosphere etc. These schemes allow to improve ecological situation together with increasing production volumes and improving working conditions at the production sites, and to increase profitability of sulfuric acid plants.
Some more papers were dedicated to technical aspects of sulfuric production organization. For instance, Artem Serebrennikov, General Director of Intertest, shared his company’s experience in design and turnkey construction of sulfuric acid plant. The speaker demonstrated successful results on the example of Khiagda field located in the remote area of the Republic of Buryatia. Sergey Filimonov, Chief Engineer of Gazprom Dobycha Orenburg, touched upon the topic of rational use of organosulfur natural resources. In particular, he noted that further «organosulfur development» will promote environment preservation, improve economic indicators of hydrocarbon crude processing due to more rational use of its potential and will expand the product line. Wim Kint, Business Development Director at MECS Europe/Africa, covered the latest technologies of sulfuric acid production which MECS-DuPont Company has applied in the number of Russian projects, together with major metallurgy companies in particular.
Participants of conference also paid much attention to practical applications and new opportunities for non-standard use of sulfur. Inna Patkina, Leading Researcher of Concrete and Stone Materials Department at RosdorNII, spoke about application of sulfur concrete in road construction. According to her, the use of modified sulfur in road construction is feasible both economically and in terms of utilization of large-tonnage wastes that are produced during natural gas processing and furnace gas purification.
At the moment, sulfur is practically not applied in road construction. However, research and testing of sulfur concrete showed excellent results. Indicators of tensile strength under bending were stable, which is important for road construction. High resistance to cold of the tested materials, small durability losses and minimum weight losses allow to estimate a long life performance of products based on sulfur concrete.
Moreover, economic estimates showed that application of sulfur concrete instead of traditional cement concrete for road arrangement elements will provide the return on additional investment in 1-3 years. The economic effect is triggered by acceleration of technological processes and by longer life cycle.
Technologies for producing sulfurous concrete of both low and high grades are already available. But this is the new material, and it needs testing, as every scientific research does, which in turn demands the interest from the customers, – large manufacturing companies.
Axel Schultze, Head of Hugo Petersen Company, presented clean technology that allows to generate electric power without carbon dioxide emissions during burning of sulfur. The speaker also demonstrated the energy regeneration process on the example of sulfuric acid unit at Crimean TITAN site.
Oleg Mereshko, Head of Moscow representative office of Enersul Inc (Canada), spoke about advanced technologies of sulfur production. The Canadian approach to infrastructure organization at sulfuric plants does not depend on initial material for sulfur production: it is identical for gas processing, oil refining, iron and steel enterprises. The solution depends on the volume of sulfur produced. One of Enersul plants has a capacity of up to 3 million tons of sulfur per year and loading rate at 25 thousand tons per hour. As a whole, Canadian experience is of great interest, since this country laid the foundation for sulfuric industry, having created first technologies for production, storage, transportation, dust catching, explosion safety. Sulfur granulation technology was born here as well.
Apart from technology topics, Mr. Mereshko also touched upon global issues of the industry. «It is quite difficult to do forecasts in the sulfur market because the trends are changing very sharply, and it is simply impossible to predict something, – he says. – Sulfur prices are not a matter of discussion at conferences in principle. For many corporations, sulfur is a headache. For others, like for Enersul, it means wealth and source of income. Therefore the delicate price issue is being resolved confidentially at the negotiating table».
