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Gulf Resources, Inc. Message Board

  • alan74z alan74z Dec 5, 2012 1:31 PM Flag

    Bromine demand and pricing

    We finally touched 20,000 RMB/ton for the Bromine price (about $3,200/ton) so the trend up continues and it could mean that for the first time in a long time prices of Bromine could be a positive quarter over quarter ( Q4 versus Q3), not year over year yet. Just to put things in perspective the price for the whole of 2011 was $4,080/ton, it went down to about $3,600/ton by the end of 2011 and remained there in Q1 at $3,569 and Q2 at $3,486 until it dropped in Q3 to $2,900 and if it continues the trend up or at least maintain the current price will be certainly above $3,000 in Q4. It would have to gain another 12% from the current $3,200/ton to match Q1/2012 so still some way to go but not impossible.
    Given that they have since last year increased capacity if demand is returning to levels seen last year, it could also boost revenues significantly. Their material costs are also significantly lower than last year and with higher production the amortization & depreciation element of their COS will come down by ton, so overall we should see also an improvement in gross margin directly the results of the upgrade investments they made which have been pretty costly but could pay off if Bromine demand comes back up.
    This is why I am so focused on Bromine prices as they are the key to driving significant profit and cash flow improvements.

    Sentiment: Buy

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