Effects of Covid Epidemic on Sulphur and Fertilizer Industry

With the spread of Covid 19 virus worldwide, its effects on economy and raw material markets started to be seen.

The virus, which appeared in Wuhan province of China in December, continues to change the living conditions of billions of people by affecting the whole world in a short time. Companies in many countries carry out their activities with a remote working system.

As a result of the emerging developments, many countries declare curfews which lead to changes in consumption habits. Logistic delays and cost increases in raw material trade as well as economic uncertainties force to suspend production of factories in fertilizer sector. For example, with the Prime Minister of India declaring a 21-day lock-down across the country, large fertilizer producers decided to close their businesses for 3 weeks. In addition, one of the biggest concerns is arising of logistics problems because of labour shortage at the ports and fear of Covid 19 virus. Although it is predicted that fertilizer producers will continue to import, the fact that it has been declared force majeure in major ports indicates that logistics delays are inevitable. The same is happening not only in India but also in big fertilizer purchaser countries in Africa. In countries such as Kenya, Ethiopia, Nigeria, buyers who can not predict the direction of logistics operations and product demand, started to stop their purchases. It is said that this slowdown in the market may lead to excess supply due to lack of demand in the market. However, we will be able to understand the supply / demand balance better with the developments in the coming days.

As for the sulphur market, oil refineries in the world have reduced their production supply as a result of the 30% decrease in oil consumption worldwide. This situation will cause the amount of sulphur to decrease. In parallel with the developments in the fertilizer market, which is the biggest use area of sulphur, the level of balance will be determined in the coming days.