With almost 12 uninterrupted months
of stable high prices, iodine producers have undoubtedly been
among the winners of 2012.
While 57% of the worlds
iodine is produced in Chile, Japan is the next largest producer
at 20%. Most of Japans iodine production is centred in
the region devastated by March 2011s earthquake and
As a result, the price of iodine
shot up from around $25/kg in 2010 to more than $60/kg in March
2011, creating a huge tailwind for established producers such
as Chiles Sociedad Qumica y Minera (SQM), accounting for
more than 20% of the companys revenues in 2012, and for
new entrants to the market such as US-based Iofina Plc and
Canadas Sirocco Mining Inc.
SQM, the largest iodine producer in
the world with around one-third of the market share, announced
in April that it would invest $550m in boosting iodine
production for 2012.
The company consistently reported
iodine and derivatives to be its top-performing business
segment throughout the year, driven by strong demand and higher
average selling prices, which increased by around 70%
Sirocco Mining reported sharply
narrowing losses throughout 2012 - down to $244,000 in Q3 from
$24m in Q1 - as it continued to build up production and convert
inferred resources to indicated resources at its Aguas Blancas
iodine deposit in Chile.
Sirocco targeted production of
1,400 tpa iodine for 2012, and is investigating the potential
to develop further iodine reserves in Chile.
The past 12 months saw the
successful fabrication, completion and commissioning of
Iofinas new WET IOsorb IO#1 plant, which extracts iodine
from wastewater used in shale gas production, as well as a
successful $6.9m placing in challenging global market
By the end of the year, the company
had achieved encouraging first recoveries of iodine
from IO#1, and construction of IO#2 was reported to be well
underway. Iofina plans to commission a new iodine plant every
quarter for the foreseeable future.
More than half of all iodine
produced is used in ways related to human and animal health,
ranging from the table salt additive and animal feed to
pharmaceuticals. It is also a commonly used contrast in X-rays
(see pp.70-71), a major component in the manufacture
of liquid crystal displays and is a key ingredient in
We expect total market demand
to remain strong [and] demand growth is being led by X-ray
contrast media and pharmaceutical applications, SQM said
in its third-quarter results statement.
Looking forward, a lot of
what happens in terms of supply and pricing will depend what
happens with ACF Mineras Algorta Norte iodine project in
Chile, Lance Baller, Iofina CEO, said.
If it achieves its target
production of 6,000 tpa, we could see iodine prices come down
to around $58/kg. If it doesnt go so well, prices may
well be up in the range of $80-85/kg in the medium term,
Baller told IM.
The long-term impact of such
significant price increases remains to be seen.
Although iodine does not have a direct substitute in areas
such as nutrition, contrast media testing, pharmaceuticals and
similar applications, other areas (such as low-value
applications, including biocides) could migrate to alternatives
because of high prices.