LCD Screens Continue to Drive Iodine Demand   

Global demand for iodine, an essential component in the manufacture of optical polarising film (OPF) for LCD screens, grew by almost 6% per year between 2000 and 2008, according to the Iodine: global industry markets and outlook from Roskill Information Services Ltd.  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% per year from 2000 to 2009, has been the key driver for growth. Japan, Korea, Taiwan province and, more recently, China have become leading centers of OPF manufacture. Demand for iodine in the manufacture of OPF has increased by 22% per year 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.
   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 commercialized 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 10 000 t/a 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 8 700 t/a however, as several plants have also been closed.
    Crude output of iodine increased by 10 300 tons between 2000 and 2009, faster than the rise in new capacity, meaning available capacity became tight towards the end of the decade.  Utilization 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.