Gulf Resources Provides Update on Contractual Bromine Prices

Published Oct 23rd, 2009

NEW YORK & SHANDONG, China, Oct. 23  -- Gulf Resources, Inc. (OTC Bulletin Board: GRUS - News; "Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today provided an update on bromine prices in October and reaffirmed the positive outlook on bromine prices for the rest of 2009.
 

Due to the continuous demand for bromine, Gulf Resources has raised its price per metric ton and signed monthly contractual agreements with 13 existing customers. According to the new contracts, the price per metric ton is $2,140, representing an 8% increase from $1,980 per metric ton in September and a 28% increase from $1,680 per metric ton in the beginning of 2009. These 13 customers represent approximately 75% of the Company's bromine and crude salt revenue. The Company has also increased its contractual bromine prices with all of its other customers as well.

The rebound in bromine prices is mainly due to increased demand from producers of flame retardants and oil drilling chemicals and Gulf Resources believes the demand outlook will remain positive for the rest of 2009. The Company intends to continue adjusting contractual bromine prices based on market developments.

"We expect a positive impact on both our top and bottom line performance for the fourth quarter from the increase in bromine prices as the rate of the price increases has exceeded our expectations," said Mr. Xiaobin Liu, Chief Executive Officer of Gulf Resources. "As an indication of China's expanding manufacturing and industrial activities, the country's purchasing managers' index (PMI) has increased to 54.3 in September from 54.0 in August, representing the seventh consecutive month for this macroeconomic indicator exceeding 50.0, which is the level signifying economic expansion. We believe the outlook for chemical manufacturing will remain positive for the remainder of the year, thus signifying continued healthy demand for bromine products."

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC") and Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"). 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 & gas field explorations and as papermaking chemical agents. For more information about the Company, please visit http://www.gulfresourcesinc.cn .

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, 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.