Iofina is anticipating a stronger pricing environment in the
iodine market through the end of the year, believing that $30
per kg is a reasonable price, chief executive officer Tom
Becker exclusively told Fastmarkets IM.
"In the fourth quarter [of 2018] we might see a pick up [in
pricing] as stocks come down globally and we still see good
demand in the market and room for the prices to move up without
any significant supply coming on," Becker said.
Further into the future, pricing should continue to
strengthen, "We think it is reasonable that the market reaches
$30 per kg," he added.
The market currently requires an additional 1,000 metric
tonnes each year to service demand, according to Becker.
"Generally there is a little bit more demand than production
and that is the biggest driver in the current price increases
– producers are selling a little more than they are
making," Becker said.
Spot iodine, min 99.5% prices have risen from $20.50-21.50
per kg in August last year to the current range of $25.50-26.50
per kg, assessed on September 20.
Stronger pricing in the market has occurred concurrent with
Iofina’s gradual ramp-up of production.
As previously reported by Fastmarkets IM, Iofina increased
production 12% year on year in the first half of 2018, although
the company missed its internal six-month target.
Production was at 264.1 tonnes for the six months ending
June 30 this year, which was revised down "from the low 300s,"
The revision was due to "some downtime issues" and problems
with the weather that affected production in the first two
months of the year.
The 12% year-over-year increase is on the 235.5 tonnes in
the first half of 2017 and the new capacity has allowed the
company to establish new customers.
The company’s recently ramped up IO#7 plant is
currently operating at the same rate expected for 2019,
although Becker shied away from giving a production forecast
for next year on the basis it was too premature.
Over 300 tonnes is expected to be produced in the second
half of 2018.
The greater production, and subsequent sales, has helped the
company increase its earnings before interest, taxes,
depreciation, and amortization (Ebitda) by 6% to $725,000 in
the first six months of 2018 up from $683,000 in corresponding
period of 2017.
The company was operating at a loss for the first half of
the year, although the loss margin has decreased to $47,000
from $331,000 in the first half of 2017.
The options for restructuring debt is being assessed to fund
the construction of a new plant, IO#8.
Becker did not want to speculate on how that debt may be
restructured until a decision had been made internally.
Iofina is assessing several sites for IO#8 but has not yet
made a decision on where the new plant will be located.