China slowdown not affecting iodine spot price
Published: Friday, 21 February 2020
The outbreak of the novel coronavirus (2019-nCoV) and the subsequent slowdown in China, one of the world’s largest iodine consumers, is yet to have an impact on the iodine spot market, as the price held firm this week.
The country rivals markets such as the United States and
India in terms of the volumes of iodine it consumes, but the
lack of purchasing has not moved Fastmarkets’
assessed price for the material amid adequate stocks.
Fastmarkets’ assessment of iodine min 99.5%,
spot, delivered Europe/US, cif Asia, was $35-39 per kg on
February 20, flat week on week, but up by $2.50 per kg or
7.2%, since the start of the year.
"China is a huge consumer of iodine, but there has been no
effect on the iodine prices," one iodine producer said.
"I was guessing that the price will drop or stop growing at
least since one of the largest buyers is having a problem
with iodine derivatives production [because workers have not
returned to the plants]," the producer added.
The price has moved higher in four of the eight assessments
so far this year, although this includes an assessment on
January 2, when many market participants were still on
holidays for the Gregorian calendar New Year. Prices were
rolled over due to a lack of data to make a qualified
During 2019, the price rose by $8 per kg or 26%, compared
with only $2.50 per kg or 10.4% throughout 2018.
The latest rally was triggered by a price war between
producers, which forced some iodine output out of the market
and squeezing supply. Market tightness has underpinned all
the subsequent price movements.
"We buy from the iodine producer at a high price due because
other regional markets have a high price. But we sell for a
low margin because the Chinese iodine consumers have big
stocks and factories cannot digest much inventory at the
moment," one trader said.
In the long term, demand may also change, according to the
Many smaller factories may not have the financial resources
to upgrade sites to adhere to Beijing’s
environmental restrictions and may come offline altogether,
the trader said.