The past nine months have seen truly unique events unfold in the iodine industry.
Beginning in November of 2010, some supply issues were being evidenced. One large Chilean mine lost a critical water source and another mine began working in a ground formation with a lower than anticipated iodine content.
When the Japanese earthquake occurred on March 11 of this year, the overall iodine market was likely short nearly ten percent of supply versus demand. The area of Japan that was affected by the earthquake was also a high iodine production area. Although it is not known for certain, it would seem as though Japan’s supply of 33% of the world’s iodine was cut at least in half. Regardless of the volume that is still being supplied from other areas of Japan, the total is significantly less than in 2010.
So, with the decreased Chilean volume from mining issues, and the Japanese supply drop due to earthquake damage, the global market may have as little as 75% of the iodine as needed. Thus far this year, that shortage has largely been negated by decreases in inventory volumes at all levels: mines, material in transit, material in warehouse, material being processed, warehouse stock of finished goods, and customer inventory levels of finished goods. Unfortunately this approach is finite and it is clear that with the robust economy in some parts of the world, and some new applications of iodine, that simply managing inventory is not going to be adequate.
Beginning in late 2011, one large new Chilean mine will begin shipping iodine. In addition, high prices for iodine have allowed some recovery operations to be profitable (these consist primarily of the recovery of iodine from waste streams generated during the production of pharmaceuticals and also from industrial process operations). These volumes will probably not have immediate impacts on availability, but rather will stabilize the market place. Looking past mid-2012, it would appear that global economics will probably reduce the demand for iodine in a number of market segments, but especially in consumer applications such as automotive and electronics.