Iofina, specialists in the exploration and production of iodine and halogen-based specialty chemical derivatives, today provides an update to the market regarding its activities including iodine production forecasts and a preliminary determination of a trade case involving Iofina produced Hydriodic Acid.
The Company expects to produce 575-605 metric tonnes ("MT") of crystalline iodine in the full year 2018 from its four currently operating IOsorb® plants. This compares with last year's total production of 503MT. This full year total is in line with analyst predictions in the market. This significant year-on-year increase is a result of the start of IO#7 which is producing at a much greater rate since it opened in mid-February than its predecessor IO#3 with other plants performing as expected. This total also assumes no contribution from IO#5 for 2018. Iofina expects to produce 260-265 MT in H1 and 315-340 MT in H2 of its IOflo® crystalline iodine. Additionally, spot prices continue to strengthen for iodine and are at or above $25/kg for large volume purchases.
Separately, on June 16th 2018 there was a preliminary determination from China's Ministry of Commerce ("MOFCOM") regarding an Iofina Chemical product, namely Hydriodic Acid ("HI"). Iofina Chemical has produced and imported HI into China for over 15 years and HI is used in a catalytic process to produce acetic acid. In the fall of 2017, Iofina and other foreign suppliers of HI into China were accused of dumping HI by a relatively new Chinese HI manufacturer claiming sales of HI below market value. Iofina Chemical refutes this claim has been fully cooperating with MOFCOM officials and has provided information to show Iofina was not dumping HI into China. The preliminary determination from MOFCOM concluded there was dumping by Iofina Chemical and the other HI manufacturers from the USA and Japan and preliminary dumping duties of 118.8% and 41.1% have been imposed with immediate effect against USA and Japanese importers respectively. Iofina believes this preliminary determination and the tariff imposed is incorrect and will investigate all means to reverse this decision before the final determination in the autumn of this year. Given the recent deterioration of the USA-China trade relationship, the conclusion on the matter is unclear. Whilst not completely certain, based on potential loss of sales of HI in the second half of 2018, we are currently calculating a small negative effect on profitability of slightly over one hundred thousand dollars from our current expectations in 2018.
Commenting, President and CEO Dr. Tom Becker, stated: ''Our IOsorb® plants are performing well and we are pleased that our expected production of near 600MT of crystalline iodine in 2018 is in line with analyst predictions in the market. The production from IO#7 has resulted in a lowering of our total per unit iodine production costs and this coupled with higher iodine prices and an increase in year-on-year production are all positive for Iofina's profitability
The preliminary determination in the hydriodic acid anti-dumping inquiry in China is extremely disappointing. We continue to refute these claims and will investigate and pursue all options to remedy the situation."