One month plunged 10,000 yuan. In the first quarter, the chemical raw material bromine, which had reached the highest price of 32,000 yuan/ton, has fallen sharply since mid-May. The monitoring data of the business club shows that in the past month, the factory price of bromine has been lowered to 25,000 yuan/ton, and the reporter learned that the actual transaction price in the industry is only 22,000 yuan/ton.
According to industry sources, this round of brominated prices plummeted, in addition to the previous high prices, and also related to the low season for downstream fire retardant companies entering the market, making the prices at excessively high prices retaliatory “divingâ€.
Foreign companies frequently raise prices to cause high dive
Since 2011, the world's bromine prices have entered a period of rapid growth. The world’s largest bromine manufacturer, Albemarle, has announced price increases five times this year. On May 13th, Albemarle raised its bromine price to US$4,500/MT (equivalent to RMB35,000/ton).
Tang Chengbiao, deputy general manager of Dongying Xinhualian Salt Co., Ltd., believes that the price increase of foreign companies is the driving force behind the continued rise in domestic bromine prices. “The bromine price at home and abroad has always had a unit price gap of around 3,000 yuan per ton, and once prices are raised by Albemarle and Israel’s Dead Sea Group, domestic prices will go up.â€
The common extraction source of bromine, lake salt and sea salt, has little difference in the cost of bromine, the former is about 5000-6000 yuan/ton, and the latter is about 4,000 yuan/ton. Based on this calculation, the gross profit rate of the bromine-producing companies rose rapidly from 25% in 2009 to 80% in early 2011.
China's annual output of bromine from 130,000 to 160,000 tons is the third largest bromine production country in the world, accounting for more than 10% of the world's total production. Since the extraction of bromine is prone to serious water pollution, some cities in China have adopted a policy of restricting production and restricting production, making the upstream production capacity increasingly tense.
At the same time, downstream flame retardant companies were stimulated by price increases by foreign companies, competing to increase production capacity, resulting in imbalance between supply and demand. “The technical threshold of most flame retardants is relatively low, and domestic small businesses have a strong mentality of profit-taking, which means that they immediately follow suit to make money.†Wang Yunhai, marketing director of Tianjin Changlu Hansui Salt Field Co., Ltd. said.
Excessive fluctuations in raw material prices have affected downstream companies to a large extent.
Downstream companies are "injured"
“Our company that manufactures pharmaceutical intermediates has no way to raise the price of terminal products. At the high price of bromine at the beginning of the year, it was almost only guaranteed.†Zhang Ming, deputy general manager of Fujian Santai Biopharmaceutical Co., Ltd. complained to reporters repeatedly. Since the end of 2009, the price of bromine has entered a fast-growing channel, which has been rising from RMB 8,000/ton to RMB 32,000/ton in just over a year.
Mr. Cao, a Chongqing Pharmaceutical and Chemical Co., Ltd., was equally distressed with Zhang Ming. “Although it is a relative low price, we can't increase our inventory. Bromine is shipped in specialized dispensing tanks. The high price of cans makes it impossible to increase the cost to increase inventory,†said Mr. Cao.
Flame retardant production companies are the main downstream of bromine. Products such as tetrabromobisphenol A and decabromodiphenyl ethane are widely added to electronic products, automobiles and building materials. “The negative impact of the Great Japan Earthquake has affected the electronics, automotive and other industries, which in turn affect the flame retardant market.†Wang Yunhai told reporters that from May to July in previous years, the market was off-season. In the same period this year, companies were almost zero orders.
"Tetrabromobisphenol A is a traditional flame retardant, and the current gross profit margin is minimal, and many companies have gradually given up." Wang Yunhai said.
"The current downstream market has more inventories and terminal demand is limited. It is expected that the bromine market will continue to maintain its low-price trend in the near future," said Zhou Wei, an analyst at China National Chemical Industry Network Bromine Industry.
“The decline of bromine from May is also related to the seasonal correction. From the previous year to the end of July, the price will enter a normal track.†Ren Zhenhua, chairman of the Shouguang Bromine Association in Shandong Province, believes that, unlike in previous years, this year's bromine The price of crude oil has reached the historical peak, far exceeding the callback range of RMB 21,000/tonne to RMB 17,000/tonne from May to July last year.
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