Jul 14 2010
Global demand for iodine, an essential component in the manufacture of optical polarising film (OPF) for LCD screens, grew by almost 6%py between 2000 and 2008.
Recession-proof human health applications, such as X-ray contrast media, biocides, nutrition and pharmaceuticals, provided a buffer against the impact of the global economic downturn on the iodine market, however its industrial uses were not immune and overall demand declined by 12% in 2009.
Increased demand from Asia, where consumption rose by 15%py from 2000 to 2009, has been the key driver for growth. Japan, South Korea, Taiwan and, more recently, China have become leading centres of OPF manufacture, with companies like Nitto Denko, Sumitomo and LG Chem serving local LCD screen manufacturers. Demand for iodine in the manufacture of OPF has increased by 22%py since 2000 and now accounts for 12% of total consumption.
Rising GDP in China, and other Asian countries, has meant increased spending on human health related products, boosting iodine consumption in X-ray contrast media, biocide and pharmaceuticals. Meanwhile, expansion in manufacturing output has led to growth in industrial uses for iodine, such as catalysts. In industrialised economies, however, demand for iodine has been flat or shown only a slight improvement due to the maturity of iodine products in the market and limited OPF capacity.
Future demand for iodine, forecast to grow at 3.5%py over the next five years, will continue to be led by OPF for LCD screens. X-ray contrast media for radiology and biocides for human health are also likely to show strong growth. Emerging economies will provide the best opportunities for iodine demand growth, while the outlook in developed economies is more uncertain as recovery from the global economic downturn becomes more protracted.
World production of iodine remains highly concentrated in Chile and Japan, with SQM, Cosayach, Ise Chemicals and Godo Shigen accounting for around two-thirds of installed capacity and a similar level of production. The relative ease of processing caliche with high iodine content in Chile, and iodine-rich brines associated with natural gas extraction in Japan, are the main factors contributing to the leading position of these two countries in world iodine supply. Smaller amounts of iodine are also extracted from brines in the USA and the CIS.
Volumes of secondary iodine, sourced mainly from recycling waste OPF films and used X-ray contrast media, is growing. However, much of this material remains in a closed-loop between end-users and crude iodine producers, or is recycled by the end-users themselves. Secondary iodine is estimated to have accounted for around 14% of total supply in 2009, up from 9% in 2006.
China has limited iodine resources with almost all production coming as a by-product of seaweed processing, a technique long abandoned in the west. Production from phosphate rock has been commercialised in recent years, but it is unlikely that China's output of crude iodine will increase appreciably in the future. Producers in Chile, Japan, the USA and the CIS are likely to take advantage of China's domestic supply shortfall to boost iodine export sales. China, and other emerging market, demand growth will continue to be the stimulus for capacity expansions worldwide.
Since 2000, over 10,000tpy of new iodine capacity has been opened in Chile, with smaller amounts added in the USA, Azerbaijan, Iran and China. Total world capacity increased by only 8,700tpy however, as several plants have also been closed. Future expansion is dominated by plans to expand capacity in these same countries, most notably in Chile and the USA.
Crude output of iodine increased by 10,300t between 2000 and 2009, faster than the rise in new capacity, meaning available capacity became tight towards the end of the decade. Utilisation rates at iodine plants increased and, combined with higher input costs, falling stock levels and surging demand, prices increased almost two-fold. Despite the downturn in demand in 2009, prices have stayed buoyant, mainly as a result of the small number of producers controlling much of the world's iodine supply.
Source: http://www.roskill.com/