A report by Roskill has suggested that growth in supply is expected to increase faster than demand and lead to prices falling from record levels. Crude iodine supply is expected to be more than sufficient to meet forecast demand.  The main reason for this is the increase in Chilean and, in the longer-term, US capacities. The report shows that iodine prices increased throughout 2011 reaching a peak of 97.5/kg in June, caused by the combination of the March 2011 Tohoku earthquake and tsunami in Japan and a supply shortage in South America. These reductions in supply along with strong growth in consumption from applications such as X-ray contrast media, biocides and OPF led to a surge in prices.

Iodine prices reduced to an average of $67/kg in early 2012 although supplies remained tight. This fall followed a slight rise in supply as shipments from ACP Minera’s Algorta Norta project started and output from Japanese producers recovered to normal rates.

In 2012 crude iodine production was around 28,700 t including 5,000 t of secondary material. In 2013, production is expected to increase by around 8% if targets from Chilean producers are reached. Global demand is expected to rise by 3.5% py to 2017, from 30,600 t in 2012.

In the first quarter of 2013, prices continued to soften, dropping to around 11.5% below Q1 2012 levels.  This may have resulted from production rising at a higher rate than consumption.  If production targets are reached, and demand rises as forecast, prices may decrease further through 2013 and by Q1 2014, contract price may be 10% below Q1 2013 levels. Prices are then forecast to rise progressively at low rate to 2017.

Iodine is used in a diverse applications by a wide variety of industries with around half used in applications directly related to human health, for example X-ray contrast media, iodophors (biocides) and pharmaceuticals.  Most of the remainder is used in industrial applications including OPF (Optical Polarizing Film) for liquid crystal displays (LCDs), catalysts, heat stabilisers and the production of fluorine derivatives.  Markets for iodine tend to be long-established and mature so show low growth rates.  The exception is that for OPF, which has risen from an estimated 200t in 2000 to 3,950t in 2012.

The main trade flows of iodine and iodine derivatives are from Chile and Japan to North America and Europe.  Asian imports, especially to China, India and South Korea, have become increasingly important over the last decade and exceeded those of North America in 2010 and 2012.  In terms of consumption, Asia is the leading region followed by Europe and North America.

The supply of secondary iodine has grown significantly over the last ten years.  Most of this has been from waste generated during OPF production in South Korea, Japan or Taiwan.  Japanese companies account for an estimated two-thirds of secondary production, or 3,000t in 2012.

Output of crude iodine takes place in nine countries, ordered by size: Chile, Japan, USA, China, Turkmenistan, Azerbaijan, Iran, Indonesia, and Russia.  Production is dominated by Chilean and Japanese companies, which accounted for an estimated 58% and 32% respectively of global output during 2012.  However, an estimated third of Japanese production is of secondary output recycled from waste.

SQM of Chile is the leading producer, accounting for over a third of global output in 2012.  The other major Chilean producers are ACF Minera and Cosayach.  In 2011, Cosayach lost an estimated 2,700 tpy of capacity following the closure of unlicenced wells supplying water to its processing plant.  Japanese producers, led by Ise Chemical and Godo Shigen, has a global capacity of over 10,000 tpy.

The report by Roskill suggests that supply of crude iodine is expected to be more than sufficient to meet forecast demand.  The main reason for this is the increase in Chilean and, in the longer-term, US capacities.  SQM, ACF Minera, Sirocco Mining and SCM Bullmine are planning to increase capacity by a combined 5,000 tpy by 2014.  Japanese secondary production is likely to increase in line with growth output of OPF.