Riding on the Back of Short Supply, Bromine Rates Go Through the Roof in China
- 07-Jun-2021 3:00 PM
- Journalist: Robert Hume
Since the start of 2021, Bromine prices have been continuously soaring in China, backed by low inventory levels and low production rates at major manufacturing units in the country.
Supplies of Bromine in Q1 2021 were significantly impacted by the government-led closures due to winter weather and Chinese New Year holiday. Gulf Resources, Inc., a leading manufacturer of elemental Bromine, crude salt and specialty chemical products in China, revealed in its first quarter results that due to aforementioned reasons, its factories remained closed from December 25, 2020 to February 19, 2021. Tight supplies and strong demand have well supported the uptrend in Bromine pricing in Q1 2021 and even into Q2 2021.
According to ChemAnalyst database, price of Bromine rose by more than 10% since April in the Chinese market and is currently hovering around USD 6320/MT. Traders are expecting further rise in prices in the coming weeks, under supply crunch that could appear under the threat of movement restrictions in major provinces of China due to surge in COVD cases. It is also expected that the demand for Bromine intermediates and pharma segment will maintain stability under any circumstances in the near future in China.
On the demand front, majority of the offtakes for elemental Bromine have been initiated by spot demand from the downstream flame retardant manufacturers, which have reported robust sales due to consistent improvement in the end markets like consumer electronics, components and construction. As per market experts, soaring Chinese Bromine prices are also affecting the price trend of other importing countries, as fuming freight, and container cost have added to the cost pressure.
Several manufacturers have reported increase in their production rates by many times compared to 2020. However, there are projections that the demand-supply situation is still not under control and it will take much time to narrow down this gap looking at the current trends. In addition, flame retardant segment has been tremendously growing and pushing the demand in parallel with a sharp economic rebound. However, post pandemic economic recovery, would play a major role in resumption of downstream offtakes, which is now becoming a matter of concern as cases are rising again across major regions of Asia.