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Growth In Supply Is Expected To Increase Faster Than Demand And Lead To Prices Falling From Record Levels

Iodine is used in a diverse applications by a wide variety of industries.  Around half, however, is 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.

New capacity entering the market will meet forecast rise in demand

Global capacity is estimated to be divided between primary (70%) and secondary (30%). 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 2,700tpy of capacity following the closure of unlicenced wells supplying water to its processing plant.  Japanese producers, led by Ise Chemical and Godo Shigen, have a global capacity of over 10,000tpy.  

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 5,000tpy by 2014.  Japanese secondary production is likely to increase in line with growth output of OPF.

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