Riding on the Back of Short Supply, Bromine Price Rates Go Through the Roof in China
According to the ChemAnalyst database, the 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 a further rise in prices in the coming weeks, undersupply crunch that could appear under the threat of movement restrictions in major provinces of China due to a surge in COVD cases. It is also expected that the demand for Bromine intermediates and the pharma segment will maintain stability under any circumstances in the near future in China.
On the demand front, the 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 an 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, the 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 the resumption of downstream offtakes, which is now becoming a matter of concern as cases are rising again across major regions of Asia.
The Asia Pacific Bromine market witnessed strong market sentiments with tight supplies during the first quarter of 2021, owing to the limited inventories of Bromine as several Bromine manufacturers halted their production during the first half of the quarter as the inventories level were piled up amid the reluctant offtakes and Chinese lunar new year holidays in February. Demand was healthy from the downstream flame retardants and intermediates; however, the offtakes surged from the pharmaceutical sector by the quarter ending due to the resurgence of COVID in India. Prices in the FOB Shanghai hiked by 16.8% on y-o-y averaging at USD 5620 per tonne in Quarter ends.
Bromine supplies in the North American region improved as several producers ramped up run rates to mitigate the impact of winter storm Uri that disrupted operations in Q1. Amidst sharp uptick in the global Bromine rates and high operational costs, the Bromine pricing in the USA observed a gradual increment with FOB Michigan June prices assessing at USD 4690 per tonne.
