The contract iodine price has edged above spot market levels
for the first time since January 2017 after consumers accepted
offers at $27.50 kg for the first quarter in an undersupplied
Iodine prices have steadily risen since August 2017 with
global sales exceeding production levels, causing a 28% price
rise in both the spot and contract markets between August last
year to now.
Fastmarkets IM's contract
price for iodine, min 99.5%, delivered to US/Europe, cif
Asia, rose to $25.50-27.50 per kg on Thursday November 29,
up 50 cents on the high end of the range.
By comparison, the spot
market price for iodine, min 99.5%, spot, delivered US/Europe,
cif Asia, held firm at $25.50-27 per kg on Thursday.
In August 2017, the contract price was $20.50-21 per kg
while the spot market was $19.90-21.
The last time the contract price surpassed the spot price
was on January 19, 2017, when the contract price was $20.50-22
per kg compared with $18.50-21 for spot material.
Two market participants reported making offers between $27
and $28 per kg for first-quarter contracts but negotiations are
not yet concluded. It is unclear whether iodine consumers are
willing to accept prices at that level.
First-quarter contracts have been signed this month at
$27.50 by a third market participant, indicating market
acceptance at this level for the first three months of
The higher agreed contract price suggests consumers are
worried of further price increases and are looking to lock in
volumes before prices climb further.
Both sellers and producers widely had agreed
iodine prices would move toward $30 per kg by the end of
2018. Although this price has not emerged yet, it now looks
likely in the second half of 2019.
Market sources point to the likelihood that the iodine
market will remain undersupplied even though market-leader SQM
is expanding capacity to 14,000 tonnes per year from 11,000 tpy
SQM will use the additional output to replenish inventories
which were diminished when the Chile-based producer stepped in
to plug the supply gap.
The 27 club
Sellers, notably in India and Europe, have been looking to
break the threshold of $27 per kg for spot supply but have been
unsuccessful despite testing the market with offers at $27.50
per kg for six weeks.
Consumers have pushed back against these prices –
either negotiating to $27 per kg or under, or only accepting
small lots of 1-4kg.
The top end of the range has held firm at $27 per kg for two
In response to hearing that contracts had been settled at
$27.50 one distributor said, "Its been a tough few months for
us in the iodine market".
"I very much expect us to get back on track during the first
quarter [of 2019]," the distributor added.