Gulf Resources Provides Business Update on Bromine Segment

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）TonnesUtilizationCost $Tonne（$）Tonne （$）P&L （$）202148,871,39642,644737938%22,848,3483096.406623.0426,023,048202258,964,94151,188781739%25,087,1713209.317543.1733,877,770202326,921,46224,072795119%26,521,2813335.593385.92400,18120245,549,81517,56122508%13,750,0516111.132466.58-8,200,236 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. BrominePeriodPrice （RMB）per tonne2020-Q328,0172021 Q349,30110/16/2169,5002022-Q351,7952023-Q324,2002024-q317,3232024-q422,40012/31/2421,9002/29/202521,9003/31/2529,0004/15/2537,5004/17/202535,800 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 StatementsCertain 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.

Gulf Resources Provides Business Update on Bromine Segment

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