Iofina (IOF ) said it saw record sales of iodine and specialty chemicals during the first quarter of 2021 as a result of a significant recovery in demand within the iodine market.
The Company, which specialises in the exploration production iodine and the manufacturing of specialty chemical products, said iodine sales demand returned to pre-pandemic levels while a backlog of deferred orders processed pushed sales for the quarter to record levels.
The Group said it had produced 108.2 metric tonnes ("MT") of crystalline iodine from its five operating IOsorb® plants in Oklahoma versus 129.7 MT in the same period in 2020.
This lower-than-anticipated figure is largely a result of unforeseen storms and extreme cold in the central US in February, which took production wells offline for around two weeks.
Additionally, saltwater disposal network system maintenance has resulted in lower water than expected at some plants. With weather related production issues now resolved, Iofina is now working with its brine suppliers to maximize supply to its Osorb® plants and believes that it is likely to achieve H1 production of around 250MT, below the 285-305 MT forecast.
Following a slowdown in 2H20 as a result of the COVID-19 pandemic and associated effects on the openness and vitality of the U.S. and global economy, the Company said the iodine market looks set to recover, moving forward with prices steady in Q1 and rising in 2Q21.
Iodine prices are currently at the $34-37/kg level on the spot market, similar to levels seen last year. Meanwhile, Iofina said it remains well placed to deliver good margins on its sales.
Shares in Iofina have ticked up over 6% in value over the past two weeks. The stock was trading 4.00% lower this morning at 12p immediately following the Group’s announcement.
The Group noted that the outlook for iodine prices and demand is likely to be directly related to the rate of the global economic recovery moving out of this COVID-19 period.
In particular, iodine demand for X-ray contrast agents, heat stabilizers in automotive applications, and LCD screens is now ‘recovering rapidly,’ it said. In addition, Iofina Chemical had larger than expected demand for iodine based biocides in the Period.
The Company added that it is also currently evaluating iodine growth locations and timing, and that it will prioritise the stability of water supply to our current and future plants. It said the next potential expansion will most likely be implemented around Q4 2021 or Q1 2022.
"This quarter, Iofina has seen excellent sales for our crystalline iodine and specialty chemical products, a testament to the Company's resilience and ability to capitalise on market recovery as we and the wider economy emerge from the challenging COVID-19 period.
Despite seeing lower production this quarter due to factors outside of our control, we were pleased with the sales figure for the period and are particularly encouraged to see the strong state of the iodine market and its recovery,” said President and CEO Dr. Tom Becker.
He said, "Following the Company's debt refinancing in 2020, and our consistent production diversified across plants and product lines, Iofina is on track to prudently continue its growth strategy. I look forward to updating the market further with our FY20 financial results in May."
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