What is the price of a Tier 3 sulfur credit?

In recent weeks I talked with 12 refineries and 12 other sources who generate, trade, or quote prices for Tier 3 sulfur credits.

The price going around the industry is $500 bid, $650 ask.

I don’t believe that quote to be reliable.

Here are 3 reasons

  1. First, there is no evidence you could buy a significant number of Standard Tier 3 sulfur credits for $650 without further negotiation.  An ask price of $650 is understood to mean someone is offering to sell some number of those credits at that price without further negotiation.  But nobody can say how many credits are offered at that price or who is offering them. In fact, they don’t know for sure anyone is really offering any volume at that price. I don’t think anyone is. It seems that hitting that offer would just increase the bid.
  2. Second, there’s much confusion about different kinds of Tier 3 credits.  I was told of a trade that occurred, but, when we checked, it was for a different type of Tier 3 credit, one you wouldn’t want to buy. Quotes from brokers who cannot define the specific credit being offered cannot be considered reliable.
  3. Third, nobody has been able to refer to an actual trade of Standard Tier 3 credits occurring at a price anywhere near that quote.

Our supply-demand analysis implies a much higher value for Standard Tier 3 credits.


I may be wrong; but our research indicates the quote that’s going around is way low compared to the true value of a Standard Tier 3 credit.

All the data, analysis, and models from our 3-year Tier 3 research project are in our multi-client annual reports which are available to anyone at a small fraction of the cost of the work.  If you believe Tier 3 is important to your company, then your company should get our reports!  Please contact George Hoekstra, george.hoekstra@hoekstratrading.com +1 630 330-8159, and request an offer letter.

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