Gulf Resources Provides Business Update on Bromine Segment

Rhea-AI Summary

Gulf Resources (NASDAQ: GURE), a Chinese manufacturer of bromine, reported significant challenges in its bromine segment for 2024, with a net loss of $8.2 million on revenues of $5.5 million. The segment was impacted by two main factors: depressed bromine prices averaging RMB 17,561 (down 27.1% from 2023 and 67.3% from 2022) and intentionally reduced sales volume (down 71.7% year-over-year).

The company's cost per tonne increased by 83.4% due to fixed costs being spread across lower production. However, recent market conditions show improvement, with bromine prices rising from RMB 21,900 in early 2025 to RMB 37,500 in April 2025, representing a 61.9% increase. The company expects profitability to return at current price levels and anticipates potential reopening of Factories #2 and #10.

Positive

• Bromine prices increased 61.9% from December 2024 to April 2025
• Current price levels (RMB 37,500) are expected to make segment highly profitable
• Potential approval to reopen Factories #2 and #10
• Reduced industry competition due to government-mandated closures of other bromine facilities

Negative

• Net loss of $8.2 million in bromine segment for 2024
• Revenue declined to $5.5 million in 2024 from $26.9 million in 2023
• Sales volume dropped 71.7% year-over-year
• Production costs per tonne increased 83.4%
• Utilization rate fell to 8% in 2024 from 19% in 2023

SHOUGUANG, China, April 22, 2025 (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 issued a press release providing an update on its bromine segment.

In 2024, our bromine segment reported a net loss of $8,200,236 on revenues of $5,549,815. Two primary factors contributed to this loss. First, bromine prices were significantly depressed. The average price for 2024 was RMB 17,561, representing a decline of 27.1% from 2023 and 67.3% from 2022.

Due to these unfavorable market conditions, the Company intentionally scaled back bromine sales. As a result, sales volume dropped by 71.7% year-over-year. This sharp decline in volume led to a substantial increase in the cost per tonne—up 83.4%—as fixed costs and overhead expenses had to be spread across a much smaller production base.

As demonstrated in the table below, the profitability of our bromine segment is highly sensitive to both market prices and production volumes. With fixed costs and overhead remaining relatively constant, a decline in either factor has a significant impact on the segment's financial performance.

		Bromine Economics
	Revenue						Cost/	Revenue/
Year	$	Price （RMB）	Tonnes	Utilization		Cost $	Tonne（$）	Tonne （$）	P&L （$）
2021	48,871,396	42,644	7379	38	%	22,848,348	3096.40	6623.04	26,023,048
2022	58,964,941	51,188	7817	39	%	25,087,171	3209.31	7543.17	33,877,770
2023	26,921,462	24,072	7951	19	%	26,521,281	3335.59	3385.92	400,181
2024	5,549,815	17,561	2250	8	%	13,750,051	6111.13	2466.58	-8,200,236

As shown in the data, we generated strong profits in 2021 and 2022 when bromine prices were elevated. In 2023, although we increased sales volume, we essentially broke even with the average bromine price at RMB 24,072 per tonne. However, prices declined further in 2024, contributing to the segment’s losses.

During the first two months of 2025, our factories were largely idle due to the seasonal winter shutdown, and bromine prices averaged around RMB 21,900 per tonne. In March, as operations resumed, prices rose to approximately RMB 29,000 per tonne, a level we believe is above breakeven.

In the early weeks of April, bromine prices surged further to RMB 37,500 per tonne. Since the beginning of 2025, bromine prices have increased by 61.9%, according to data from sunsirs.com.

	Bromine
Period	Price （RMB）per tonne
2020-Q3	28,017
2021 Q3	49,301
10/16/21	69,500
2022-Q3	51,795
2023-Q3	24,200
2024-q3	17,323
2024-q4	22,400
12/31/24	21,900
2/29/2025	21,900
3/31/25	29,000
4/15/25	37,500
4/17/2025	35,800

While it is difficult to predict where bromine prices will trend for the remainder of 2025, at current levels, our bromine segment is expected to be highly profitable and generate strong free cash flow.

Additionally, we are optimistic about receiving approval to reopen Factories #2 and #10. The investments we’ve made in flood control infrastructure and new land acquisitions are also expected to support increased production capacity.

Although the broader Chinese economy remains under pressure, overall bromine production capacity is believed to be lower than in previous years, largely due to government-mandated closures of numerous bromine mines and factories for environmental compliance.

About Gulf Resources, Inc.
Gulf Resources, Inc. operates through four wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"), Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry Co. Ltd. (“SHSI”). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. Through SHSI, the Company manufactures and sells crude salt. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit www.gulfresourcesinc.com.

Forward-Looking Statements
Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, the risks associated with the COVID-19 pandemic outbreak, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

CONTACT: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu
beishengrong@vip.163.com 

FAQ

What caused Gulf Resources (GURE) bromine segment losses in 2024?

GURE's bromine segment losses were caused by depressed bromine prices (down 27.1% YoY to RMB 17,561) and intentionally reduced sales volume (down 71.7% YoY), resulting in an $8.2 million net loss.

How much have bromine prices increased for GURE in early 2025?

Bromine prices increased 61.9% from RMB 21,900 at the start of 2025 to RMB 37,500 in April 2025.

What was GURE's bromine segment utilization rate in 2024?

GURE's bromine segment operated at only 8% utilization rate in 2024, down from 19% in 2023.

What is the outlook for GURE's bromine segment in 2025?

At current price levels, GURE expects its bromine segment to be highly profitable and generate strong free cash flow, with potential reopening of Factories #2 and #10.