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SHOUGUANG, China, Nov. 20, 2024 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", “we,” or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China today announced the following press release to provide investors with a detailed overview of the key factors impacting our bromine segment, specifically focusing on how changes in both pricing and volume have influenced performance.
Similar to oil and gold, we believe our company has a relatively fixed amount of bromine available for extracting from our properties. During the COVID-19 pandemic, demand for bromine, especially for antiseptics surged. Based on numbers from Sunsirs.com, the per tonne price of bromine increased from RMB 28,017 in Q3 2020 to RMB 49,301 in Q3 2021. Bromine prices even peaked at RMB 69,500 in October 2021. However, over the next two years, prices dropped to RMB 24,200 in Q3 2023 and to RMB 17,323 in Q3 2024. Since the end of the third quarter of 2024, the price of bromine has started to recover, standing at RMB 22,400 as of November 17, 2024. The table below shows the price changes from 2020 to 2024.
| Period | Bromine Price RMB |
| 2020-Q3 | 28,017 |
| 2021-Q3 | 49,301 |
| 2022-Q3 | 51,795 |
| 2023-Q3 | 24,200 |
| 2024-Q3 | 17,323 |
| 11/17/2024 | 22,400 |
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As the price continued to decline, management decided to limit sales and protect our mineral assets in anticipation of a future price rebound.
While the decline in prices impacted the profitability of our bromine operations, the decline in production has also had an impact. This is because factory overhead, depreciation, amortization, and various other expenses are spread across a much smaller number of tonnes.
As reported in our 10-Qs, in the third quarter of 2022, we sold 2,655 tonnes of bromine. In the same quarter of 2023, we sold 1,516 tonnes, and in Q3 2024, only 655.8 tonnes were sold. As a result, our utilization rate plunged from 34% in 2022 to 19% in 2023, and to 8% in 2024.
As shown in the numbers below, the number of tonnes sold declined from 2,655.3 in 2022 to 655.8 in 2024, resulting in a 105.9% increase in the cost per tonne, rising from $2,773 to $5,709. The increase in the cost per tonne was primarily due to the need to allocate costs of the factories, such as overhead, depreciation, amortization, and other expenses- over less than ¼ the number of tonnes. (These numbers are calculated by dividing bromine revenues by tonnes sold.)
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| Bromine Economics Q3 | 2022-2024 |
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| Q3-Year | Revenue | Price | Tonnes | Utilization | Cost | Cost/Tonne | P & L |
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| 2022 | 19,845,773 | 7,474 | 2,655.3 | 34% | 7,362,103 | 2,772.6 | $10,552,343 |
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| 2023 | 4,908,152 | 3,237 | 1,516.3 | 19% | 5,995,496 | 3,954.1 | -$2,143,203 |
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| 2024 | 1,571,313 | 2,396 | 655.8 | 8% | 3,744,088 | 5,709.1 | -$4,029,999 |
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| % change | -92.1% | -67.9% | -75.3% | -76.5% | -49.1% | 105.9% |
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Since the end of the third Quarter of 2024, the price of bromine has increased substantially (bromine prices are sourced from sunsirs.com).