LONDON, September 6, 2017 /PRNewswire/ --
The launch of the buying consortium in China is intended to consolidate imports and increase buyer influence on import negotiations. Most market players agree that the consolidated buying should improve TGO's negotiating position, but given that the venture is made up of three companies with different needs and strategies, it is unlikely to have a drastic price impact. The fragmented nature of Chinese sulphur imports makes consolidated buying challenging.
(Logo: http://mma.prnewswire.com/media/536199/CRU_Logo.jpg )
The bigger the buyer, the better the deal
It seems to be a common-sense proposition that larger buyers in a market have more leverage in negotiations than their smaller counterparts, and are able to use that influence to obtain lower prices. It is also the principle that motivated YTH, Kailin and Wengfu to form the TGO sulphur buying consortium.
In the sulphur market, activity in recent years has supported the above supposition. Prices have remained volatile, driven by the spot market activity of Chinese consumers and traders. But the largest global buyers have been able consistently to achieve lower prices than others.
China is by far the largest consumer and importer of sulphur in the world, with imports of 12.0 Mt in 2016, along with a further 6.1 Mt supplied from domestic production. Total Chinese imports were split over one hundred companies in 2016 with a wide range of domestic speculative traders adding to the price volatility. The largest buyers account for the major share of total import purchases, with the members of the TGO consortium - YTH, Kailin and Wengfu - accounting for 26% of the total in 2016. These three companies import sulphur into the southern region. Imports to the south in recent years have been flat, with growth occurring intoEastern China and along the Yangtze River.
Read the full story: http://bit.ly/China-consolidate-sulphur
Read more about CRU: http://bit.ly/About_CRU
About CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
Since our foundation in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China. CRU employs over 250 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia - our office in Beijing opened in 2004.
When facing critical business decisions, you can rely on this first-hand knowledge to give you a complete view on a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.
CRU - big enough to deliver a high quality service, small enough to care about all of our customers.
