Sulphur Market Outlook - FIRT

1 Sulphur Market OutlookMeena ChauhanHead of Sulphur and Sulphuric AcidInteger ResearchThe Fertilizer Institute Outlook and Technology conferenceFort Lauderdale, in 2002, Integer Research is a leading consultancy in the fertilizer sector Publications Consultancy Nitrogen Phosphates Potash Sulphur and sulphuric acid London Beijing Tokyo ICIS LMC International Environ Expert sub consultantsSERVICES PRODUCTS GEOGRAPHYPARTNERSS ulphur Market : changing Market sentiment from by product to yellow gold prices historically remained below US$100/tonne across major benchmarks, but the commodity bubble in 2007/2008 changed this0100200300400500600700800900 Jan 2007 Jan 2006 Jan 2005 Jan 2004 Jan 2003 Jan 2008 Jan 2009 Middle East FOBP rices started increasing in 2007, as supply tightened and downstream markets were also buoyed Average Middle East Sulphur prices, 2003 2016 Source: Integer, ICISUS$ prices, September 2014 October 2016 Sulphur quarterly averageprices (US$per tonne)Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 %YoYQ3 China CFR168153177151150131998779 47%Middle East FOB161140172144144124978073 49%Vancouver FOB spot155146169137143120968274 48%US$/tonneSource.

2 Integer, ICISR ecent trends in global Sulphur pricing607080901001101201301401501601701 80190 Oct 15 Sep 15 Aug 15 Jul 15 Jun 15 Oct 16 May 15 Apr 15 Mar 15 Jan 15 Dec 14 Nov 14 Oct 14 Sep 14 Feb 15 Sep 16 Aug 16 Jul 16 Jun 16 May 16 Apr 16 Mar 16 Feb 16 Jan 16 Dec 15 Nov 15 Vancouver FOB spotMiddle East FOBC hina : IntegerRecent Market developmentsEurope/FSU Consolidation in the chemicals sector Erosion of production in West Europe Kazakhstan project progressAmericas Fort McMurray wildfires US Sulphur production rebound Mosaic s melter in Tampa Brazilian import demand easing Cuba sulphuric acid plantMiddle East, Africa & Asia Climbing inventories in China Barzan/Qatar progress and delays Indian sugar season Morocco processed phosphates tonnesSource: IntegerThe rise in Middle East Sulphur production has materialised in 2016, to bring the region to the top global + East AsiaOceaniaCentral EuropeAfricaEast AsiaFSUWest EuropeSouth AsiaNorth AmericaMiddle EastLatin AmericaSulphur supply by region, 2015 tonnesSource: IntegerGas based Sulphur production has continued to grow through the year, forecast to represent over 50% of global Sulphur Production, based based sulphurproduction by type (%)2012 2013 2014 2015 Oilbased45 45 4545 Gas based49 49 4949 Other66 66 North AmericaMiddle EastFSUEast AsiaWest EuropeSouth AsiaLatin AmericaCentral EuropeSouth East $/bblWhat does the low oil price environment mean for the Sulphur industry?

3 0102030405060708090100110120 Jan 16 Dec 15 Apr 16 Oct 16 Sep 16 Aug 16 Jul 16 Jun 16 May 16 Mar 16 Feb 16 Oct 14 Sep 14 Aug 14 Jul 14 Jun 14 Nov 15 Oct 15 Sep 15 Aug 15 Jul 15 Jun 15 May 15 Apr 15 Mar 15 Feb 15 Jan 15 Dec 14 Nov 14+ crude oil price, June 2014 October 2016 Source: Integer, BloombergBrent crude prices have been rising since the start of 2016, aiding a more stable Outlook but downward pressure : Total Sulphur production by PADD (1 5), for H1 2015 vs H1 2016 Sulphur production in the Midwest and Gulf Coast continues to recover, leading to a net increase in US Sulphur output10383H1 201671107H1 201590 Sulphur from Petroleum and CokeSulphur from Natural Gas654710H1 20166617H1 20157144H1 20161572,6242,430194H1 20152,7472,590673648279269H1 2015917952H1 2016 Source: Integer, USGSPADD 1: East CoastPADD 2: MidwestPADD 3: Gulf CoastPADD 4+5: Rocky Mountain/West Coast 000 bbl/dAs many oil sands projects have become unfeasible in the low oil price environment, the Outlook for Canadian energy has shifted growth anticipated in 2014 forecastOil sands (operating + in construction)Conventional HeavyConventional Light and MediumEastern CanadaSource: Integer, CAPP (June 2016)Canadian crude oil production forecast, 2012 tonnesCanadian gas production is expected to continue to decrease, leading to a net decline in Sulphur output for North America in the GasOilSource: IntegerCanadian Sulphur production, 2011 2015 Limited growth from the oilsands sector Depletion of wells and challenging economics Impact on Sulphur exports from Vancouver Utilization of long term Sulphur storage Increase in forming facilitiesTrade: changing.

4 Integer, GTISC hina remains a central focus for Sulphur tradeMillion tonnes108912101113765432200720082009+ Sept Sept Chinese Sulphur imports, 2007 9M : Integer, GTISC hina supply sources continue to shift through 2016. Saudi Arabia remains the number one supplier while molten Sulphur supply from Japan and South Korea increased by over 30%Million 16 Sep 16 Aug 15 Jan 16 Dec 16 Feb 15 Sep 15 Feb 15 Jan 15 Mar 15 IranQatarSaudi ArabiaUAERest of the WorldCanadaTurkmenistanIndiaKazakhstanSo uth KoreaJapanChina monthly Sulphur imports, January 2015 September : Integer, GTISM oroccan Sulphur imports have grown through the year as new processed phosphates capacity has been brought onlineMillion 15 Jul 16 Aug 15 Feb 15 SpainPolandRussiaUnited StatesUAES audi ArabiaRest of the WorldMorocco monthly Sulphur imports, January August 2015 vs.

5 Integer, GTISM oroccan Sulphur imports have grown through the year as new processed phosphates capacity has been brought onlineMillion 15 Jul 16 Aug 15 Feb 15 SpainPolandRussiaUnited StatesUAES audi ArabiaRest of the WorldMorocco monthly Sulphur imports, January August 2015 vs 2016 Imports from the UAE have increased 48%Tonnes from Poland have also increased, up by 23%Shipments from the US have increased significantly, up by 63%Russian imports have dropped by 32%27% drop in trade from Kuwait 83% drop from Saudi from Europe have also been : Integer, Port MetroWe expect the US share of Canadian Sulphur trade to decline in the outlookSulphur exports from Canada, 2015 United StatesMexicoBrazilChileAustraliaChinaCan ada30%10%1%5%20%20% monthly Sulphur exports, January August 2016 Source: Integer, Port Metro, Company SourcesVancouver exports have improved following the production disruption earlier in the year.

6 Exports to China have gained ground through 2016 000 tonnes1,4002,0001,8001,6001,2001,0008006 004002000+ Aug 20161,7875664541351101091079758473836246 Jan Aug 20151,71054149112011321480336948 ChinaAustraliaCubaChileMexicoNew CaledoniaIndonesiaIsraelBrazilMoroccoUSA New ZealandGuatemalaVietnamDespite the disruption to oilsands production in Q2 2016 due to the Fort McMurray wildfires, Sulphur exports out of Vancouver have tonnesSource: IntegerSulphur demand is set to grow by over 2% year on year in 2016, led by developments in + AsiaNorth AmericaAfricaFSUL atin AmericaSouth AsiaWest EuropeMiddle EastSoutheast AsiaOceaniaCentral EuropeSulphur demand by region, 2015 : IntegerInteger forecasts around 4 million tonnes of Sulphur demand will emerge over the next ten years in the non fertilizer sector2403351,738174-2204,0371,102404 Net addition 2026 from 2016 East AsiaFSUN orth AmericaSouth AsiaAfricaOceaniaSouth East Asia79 Middle East71 Latin America66 West Europe48 Central Europe 000 tonnesNon fertilizer demand for Sulphur is expected to decrease in Central EuropeNet Sulphur non fertilizer demand growth between 2016 and 2026, split by regionEast Asia, led by China, and the FSU, led by Kazakhstan show the largest growth over the forecast periodGlobal Sulphur .

7 IntegerThe Market remains largely balanced in our upside scenario, while the base case surplus hovers around 3 4 million tonnes through the medium term forecast periodMillion tonnesGlobal Sulphur supply/demand balance, 2015 202643201202011201620262015224113 Slow growth scenarioBase case : IntegerKey factors influencing long term Sulphur Market trends Utilizationof long term Sulphur storage Investment in energy sector shifts in oil prices to impact Developmentin processed phosphates markets End user ability to switch between Sulphur and sulphuric acid Metals markets and commodity pricing for non fertilizer demand Continued rise of new Middle East supply Domestic Sulphur production in ChinaThank you for your attentionAny questions?All data in the presentation is taken from Integer s Sulphur Market Dynamics ServiceMeena ChauhanHead of Sulphur and Sulphuric @integer +44 (0) 207 193 3990