US production has been strong during 2016, up by 4pc through May at 3.7mn tonnes
US production has been strong during 2016, up by 4pc through May at 3.7mn tonnes. But refinery run cuts and planned maintenance may curtail some production in the third quarter. PBF has announced throughput cuts, while Phillips 66, Marathon and Valero have planned work that will impact supply.
US export volumes were up by 20pc year-over-year through June at 1mn t, suggesting that the decreased US supply may not tighten things domestically. Increased production from the Canadian oil sands should keep overall North American supply comfortable.
Oil sands producers have restored normal rates after curtailing output because of May wildfires and should continue healthy production through the end of the year. The wildfires resulted in more than an estimated 100,000t of lost sulphur production, according to the International Fertilizer Association.
Alberta gas plant production is expected to be steady. There will be decreases from British Columbia, which averaged 51,000 t/month in the first quarter, as the Spectra Pine River plant has been offline since 16 June because of flooding in the area. The plant is expected to come back on line in the near future but at reduced volumes.
On the demand side, limited upside is expected for the phosphate market with weak crop prices tempering expectations for domestic fall demand and potential increased international demand from India and Latin America.
PotashCorp is expected to increase its sulphur requirements after completing maintenance work at both of its phosphate plants in the second quarter. The buyer consumed around 300,000t in the second quarter, compared with around 410,000t in the first quarter.