Sulfur continued Frasch

Recovered sulfur proved to be the downfall of the Mexican Frasch industry as well. In August 1992, APSA declared bankruptcy. The debt of the company was 220 million. APSA closed its three mines in November 1992, and CEDI closed its mine in May 1993. Total sulfur production from the Frasch industry in Mexico was 55 million tonnes (see Table 4.8, and Figure 4.13). The assets of APSA and control of Mexican sulfur exports were assigned to Pemex (becoming their Texistepec Mining Unit) by the Mexican government in lieu of prior sulfur sales owing. Sulfur continued to be produced from their oil refineries at Salina Cruz and Tula. Pemex operates nine sulfiir recovery units, and produces over one million tonnes of recovered sulfur per year. 

Sulfur can be produced direcdy via Frasch mining or conventional mining methods, or it can be recovered as a by-product from sulfur removal and recovery processes. Production of recovered sulfur has become more significant as increasingly sour feedstocks are utilized and environmental regulations concerning emissions and waste streams have continued to tighten worldwide. Whereas recovered sulfur represented only 5% of the total sulfur production ia 1950, as of 1996 recovered sulfur represented approximately two-thirds of total sulfur production (1). Recovered sulfur could completely replace native sulfur production ia the twenty-first century (2). 

Pyrite is the most abundant of the metal sulfides. For many years, until the Frasch process was developed, pyrite was the main source of sulfur and, for much of the first half of the twentieth century, comprised over 50% of world sulfur production. Pyrite reserves are distributed throughout the world and known deposits have been mined in about 30 countries. Possibly the largest pyrite reserves in the world are located in southern Spain, Portugal, and the CIS. Large deposits are also in Canada, Cyprus, Finland, Italy, Japan, Norway, South Africa, Sweden, Turkey, the United States, and Yugoslavia. However, the three main regional producers of pyrites continue to be Western Europe Eastern Europe, including the CIS and China. 

Recovered sulfur has grown steadily in importance as a world source of brimstone since the mid 1950 s. Between 1965 and 1977 recovered sulfur s share of world supply grew from 18% to 30% (D and continues to grow in relation to Frasch mined and other forms of native elemental sulfur. All of this has meant a rapid growth in the number of sulfur recovery facilities and new developments in the various techniques and processes associated with the industry. 

With the advent of new uses for sulfur in the near future, there is no present evidence that by-product sulfur from synthetic fuel plants will swamp the sulfur market in this century. If Frasch production still continues to decline the new markets continue to develop, sulfut imports may still be required in the year 2000. 

We anticipate that the demand/supply gap will continue to stay narrow over the next several years and that sulfur prices and profit margins will remain high. The recent supply dilemma has been alleviated partially by reduction of inventories, primarily in Western Canada and at Frasch sulfur stockpiles in the U.S. Mexico and Poland. But, since no new major sources of sulfur will be available over the near term, the world operating rate will probably continue to stay above 90% in the early 1980 s. 

Our price forecast for sulfur over the next decade is predicated primarily upon two basic assumptions (1) that the Frasch sulfur producers, although now a less dominant supply source in the North American and world markets, will continue to exert price leadership, especially during periods when a tight supply demand situation exists, such as today, and (2) that the pricing of sulfur in the U.S. will be determined, in large part, by the production economics of the U.S. Frasch industry - that is, the highest cost marginal supplier. 

Therefore, we believe that the cost position of Frasch producers will determine the trend in sulfur prices, so long as the Frasch industry remains the marginal supply source - a condition that will continue over the forecast period. If, at some future date, the supplies of by-product sulfur reach a level which will fully satisfy the demand, this assumption may no longer be valid. 

After nearly a century of world dominance in the production of native sulfur, the U.S, Frasch industry shuttered its last mine as a result of low sulfur prices, continually increasing competition from low-cost recovered sulfur producers, escalating production costs, and technical problems. 

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