North American Sulfur Market: Structure And Outlook

Frasch sulfur production/pricing decisions are based on market demand, less nondiscretionary sulfur supply. Price covers the cost of Frasch production and byproduct sellers accept the Frasch price structure. Large stocks have led Canadian byproduct producers to price aggressively at times, but their near-term drawdown suggests more passive price policies in the 1990s. Expanding continental nondiscretionary supply is combining with sizable Frasch supply increments to weaken prices. Simulations using a market model embodying these structural characteristics indicate that expanding demand may not result in substantial recovery from 1992 price lows before 1996.