Fluorochemical Weekly Report: Weak Demand Pinches the Market

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One week market

Refrigerant: Production and sales remain weak and demand urgently needs to be restored

This week, the refrigerant market remained weak in production and sales, with mainstream product prices fluctuating in a narrow range. Weekly market characteristics: weak demand for domestic and foreign sales of hydrofluoric acid, and significant market impact from the release of low-cost phosphate rock fluoride resource recycling and acid production line production capacity, intense market competition, and narrow price decline; Due to factors such as limited electricity supply, calcium carbide prices have increased due to tight supply; Sulfuric acid, methanol, and dichloromethane are affected by loose supply but weak demand, resulting in downward fluctuations in prices; The shipment of tetrachloroethylene from the factory is poor, and there is an expectation of a decrease in future prices; The supply and demand relationship of other raw materials is weak, and prices remain stable; Overall, the overall supply and demand of refrigerants remain stagnant, with narrow fluctuations in the prices of refrigerant raw materials being the main factor. Recently, with the rising temperature, the demand for air conditioning after-sales market has boosted, driving the production and sales of R22 to improve; However, HFCs refrigerants have been affected by weak export demand and insufficient domestic demand support, resulting in no significant improvement in overall production and sales. The supply and demand pressure is high, and demand urgently needs to be restored. It is expected that in the short term, refrigerant prices will be mainly under pressure for consolidation and operation.

Fluoropolymers: Under the situation of oversupply, the entire industry urgently needs improvement in demand

This week, the fluoropolymer market has been bleak and stable, with prices approaching the cost line, weak domestic and foreign demand, and factories reducing production to ensure prices. The bottom of product prices is poised to consolidate. From a product perspective, the prices of TFE, VDF, and HFP monomers have continued to fluctuate and fluctuate, with prices approaching the cost line indicating that the cost of mainstream products has gradually bottomed out, and the strengthening of cost support is conducive to market stability. From the perspective of demand market, industries such as automobiles, coatings, wind power, machinery, aerospace, and environmental protection have a slow growth rate of around 10%; Popular industries such as semiconductors, photovoltaics, lithium batteries, energy storage, fluorinated pharmaceuticals, and fluorinated pesticides continue to grow rapidly, with a growth rate of around 30%. From a comprehensive perspective of supply and demand, the supply is growing too fast, the demand growth rate is slowing down, and costs are significantly squeezed. The rapid fluctuations in prices reflect the full competition in the current market, and the short-term market will still show a bottoming trend. The improvement of the market still depends on the recovery of high-speed growth in demand in popular industries.

Fluorinated lithium salt: The start of production has been raised, but the circulation of goods is still tight, and weak demand has forced the product's upward trend to slow down

This week, the price increase in the lithium salt industry chain has slowed down, with manufacturers from lithium carbonate, lithium fluoride to lithium hexafluorophosphate generally holding back and reluctant to sell. However, as prices have risen, some sources of goods have been released to supplement downstream demand, slowing down the price increase. Lithium fluoride and lithium hexafluorophosphate manufacturers are limited by high raw material prices and low operating loads. In addition, lithium salt factories have been deeply destocking under pressure of losses in the early stage, resulting in tight on-site supply. However, downstream electrolyte and positive electrode material factories face fierce competition, narrow profit margins, and cautious production. They mainly purchase lithium salts in demand. Industry Online predicts that with the significant increase in lithium carbonate prices in the early stage, some sources of goods have been released to alleviate the demand on the market. However, after the price has stabilized, transactions still do not improve, and the prices of fluorinated lithium salts may remain stagnant.

2 Weekly Highlights

Fluorine raw materials

Zhejiang Lishui plans to expand its annual production of 30000 tons of fluorite mine project

On May 10th, the Lishui Ecological Environment Bureau approved the environmental impact assessment document for the Shishu'ao fluorite mine development project of Yunhe County Huaxin Mining Co., Ltd.

According to the public announcement, the total investment of the project is 44.51 million yuan, and the mining area is located in Yunhe County, Zhejiang Province. The original annual production of 10000 tons of fluorite ore has been increased to 30000 tons of fluorite ore, while the beneficiation production capacity still maintains the original annual production capacity of 30000 tons of fluorite ore. The available resource reserves in the mining area plan are 168300 tons, with a service life of 10 years. The production life of the mine is about 5 years, and the infrastructure construction time is considered to be about 3 years. In the later stage, the production will be reduced and the pit will be closed for about 2 years, totaling about 10 years.

Guangdong Lechang plans to produce 30000 tons of fluorite annually

On April 28th, the website of the People's Government of Lechang City announced the Dawan Fluorite Mine project of Lechang Hongyun Mining Co., Ltd.

According to the public announcement, the project is located in Lechang Forest Farm, North Township, Lechang City, Shaoguan City, Guangdong Province. The total investment is about 3 million yuan, the mining area is 0.2233 square kilometers, the designed resource reserve is 162.2kt, the mining reserve is 145.98kt, the mining recovery rate is 87%, and the mining dilution rate is 15%. After the completion of the project, a production scale of 30000 tons/year of fluorite will be formed. Based on this calculation, the service life of the fluorite mine is approximately 5 years.

Refrigerant

Zibo Aofan plans to build a 247000 ton/year fourth generation fluorinated functional new material project (Phase I)

On May 23rd, the website of the Ecological Environment Bureau of Zibo City announced the first phase of the 247000 ton/year fourth generation fluorinated functional new material project for Zibo Aofan.

According to the public announcement, the project is located in Gaoqing County, Zibo City, with an estimated total investment of 12.4 million yuan, of which 320 million yuan is invested in the first phase of the project. After the first phase is completed, it can achieve an annual production of 100000 tons of chloroform, with a construction period of 12 months. The public notice also shows that there are currently units under construction in the Zibo Aofan factory area, including pentafluoropropane (R245), monochlorotrifluoropropylene (HFO-1233zd), and tetrafluoropropylene (HFO-1234ze).

Previously, the Zibo Aofan website stated that after the completion of the 247000 ton project, it will achieve an annual production capacity of 100000 tons of chloroform, 43000 tons of 1,3,3-tetrachloropropane (R250fa), 47000 tons of 1,1,1,2,3-pentachloropropane (R240db), 37000 tons of 1,1,2,3-tetrachloropropane (R1230), and 20000 tons of 2,3,3-tetrafluoropropene (R1234yf), as well as by-products of hydrochloric acid and hydrofluoric acid.

Fluoropolymer

Brazil initiates anti-dumping investigation against Chinese fiber optic cable products

On May 11, 2023, the Foreign Trade Secretariat of the Brazilian Ministry of Development, Industry, Trade, and Services issued Announcement No. 16 of 2023, launching an anti-dumping investigation against fiber optic cable products originating in China (Portuguese: cabos de fibras ó pticas). The tax number of the product involved in the case is 8544.70.10. The dumping investigation period in this case is from July 2021 to June 2022, and the injury investigation period is from July 2017 to June 2022. The announcement shall take effect from the date of publication.

Inner Mongolia Alxa signed a contract for the annual production of 10000 tons of PVDF and 6150 tons of electrolytic fluoride series products project

On May 24th, Alxa Daily reported that Alxa League has signed two fluorine chemical projects.

Among them, the coal chemical industry extension and upgrading project of Inner Mongolia Qinghua Group has a total investment of 2.4 billion yuan. The construction content includes an annual production of 100000 tons of methylamine, 100000 tons of N, N-dimethylformamide, 10000 tons of PVDF, 200000 tons of synthetic ammonia production line and supporting facilities.

At the same time, the signed projects also include the 6150 ton electrolytic fluorination series products (F168) project of Inner Mongolia Star Fluoride Technology Co., Ltd. with a total investment of 640 million yuan, which will build 100 tons of trifluoromethanesulfonic anhydride, 200 tons of trimethylsilyl trifluoromethanesulfonate, 500 tons of trifluoromethyl sulfonic acid, 1000 tons of sodium trifluoromethyl sulfite, 300 tons of perfluorobutyl sulfonate (potassium, sodium), 100 tons of methyl sulfonic anhydride, 100 tons of lithium bis trifluoromethyl sulfonate imide 100 tons of N-phenyl bis trifluoromethyl sulfonate imide, 200 tons of trifluoroacetic anhydride, 1000 tons of hexafluoroacetone trihydrate and by-products.

Fluorinated lithium salt

Xinjiang Ruolan New Materials plans to build a 10000 ton lithium fluoride and other new energy materials project

On May 26th, the Commerce, Industry and Information Technology Bureau of Ruoqiang County announced the annual production of 80000 tons of anhydrous aluminum fluoride and 10000 tons of battery grade lithium fluoride and supporting hydrofluoric acid projects by Xinjiang Ruolan New Materials Co., Ltd.

According to the public announcement, the project is located in Ruoqiang County, Bayingolin Mongolian Autonomous Prefecture. The product of the project is anhydrous aluminum fluoride, which is produced by reacting self-produced hydrofluoric acid with aluminum hydroxide in a fluidized bed reactor. Battery grade lithium fluoride is produced by reacting self-produced hydrofluoric acid with purified lithium carbonate.

The project product battery grade lithium fluoride is fully used in the production of lithium hexafluorophosphate in the field of lithium batteries, which has a significant impact on the current situation of lithium fluoride in China after reaching its production capacity. According to the statistics of Industry Online, currently there are few domestic lithium fluoride brands and the industry has a high concentration ratio. Among the sources of goods for sale, Sinomine Resources occupies the largest market (about 45%) with a capacity of 6000 tons, followed by Ganfeng Lithium with a capacity of 2500 tons (about 20%). In addition, the 6000 tons of high-purity lithium fluoride production capacity invested and constructed by Dofluoro, Tianji Co., Ltd., and Shenzhen New Star are expected to be put into operation from 2023 to 2024.

On the other hand, the battery grade lithium fluoride project needs to be a technology intensive and capital intensive industry, and the entry threshold is high. According to iQicha information, Xinjiang Ruolan New Materials Co., Ltd. has a registered capital of 1 million yuan and is controlled by two natural person shareholders without any background in new energy,It is not ruled out that there is a possibility of intentionally claiming downstream support for new energy with the purpose of obtaining approval for hydrofluoric acid production capacity.

SAIC Group plans to increase capital to Qingtao Energy by no more than 2.7 billion yuan and deepen the layout of solid-state batteries

On the evening of May 26, SAIC Group (600104) announced that the company planned to invest no more than 2.7 billion yuan in Qingtao (Kunshan) Energy Development Co., Ltd. through Jiaxing Chuangqi Venture Capital Partnership (limited partnership) and Jiaxing Qijun No.1 Equity Investment Partnership (limited partnership), of which Jiaxing Chuangqi contributed no more than 1.97 billion yuan and Jiaxing Qijun No.1 contributed no more than 730 million yuan.

According to the announcement, Qingtao Energy was established in 2016, focusing on the research and development and production of solid-state lithium batteries, ceramic separators, and lithium battery production equipment. It has achieved independent control in the core materials, core processes, and customized equipment of solid-state batteries, and is one of the earliest solid-state battery enterprises in China to achieve mass production and delivery.

After the completion of this additional investment, SAIC Group will indirectly hold approximately 15.29% of the equity of Qingtao Energy through Jiaxing Chuangqi, Jiaxing Qijun No.1, and Jiaxing Chuangrong. Previously, in order to accelerate the layout of solid-state battery technology and seize the commanding height of a new round of technological development, SAIC Group participated in the investment of Qingtao Energy through funds in 2020 and 2022 respectively. Up to now, the company has invested about 283.5 million yuan in Qingtao Energy through Jiaxing Qijun No.1 and Jiaxing Chuangrong Equity Investment Partnership (limited partnership), indirectly holding about 4.20% of the equity of Qingtao Energy. In July 2022, SAIC Group and Qingtao Energy jointly established a solid-state battery joint laboratory to promote the joint development of solid-state battery materials, cells, and systems, and accelerate the mass production and installation of solid-state battery products.

In terms of production capacity, the Jiangsu Kunshan 10GWh solid-state power battery project under construction by Qingtao Energy is mainly aimed at the rapidly growing demand for power batteries for new energy vehicles. It covers an area of 308 acres and has a construction area of 280000 square meters. It is expected to be put into operation by 2023. In addition, in February 2023, at the "Global Investment Promotion Conference for Investment in metropolitan area" held in Shanghai, the 15GWh Qingtao Energy Power Solid State Battery Energy Storage Industrial Base with a total investment of 10 billion yuan was officially signed and settled in Pidu District, Chengdu, Sichuan.

Penghui Energy plans to invest 13 billion yuan in the construction of a 36GWh energy storage battery project in Qingdao, Shandong Province

On the evening of May 22nd, Penghui Energy announced that in order to further improve the company's production capacity layout, enhance the influence and comprehensive competitiveness of the company's energy storage business, the company plans to invest 13 billion yuan in the construction of Energy Storage 1 Project in Chengyang District, Qingdao City, Shandong Province.

The project plan is to construct an annual production of 36GWh energy storage batteries in three phases, with the first phase constructing a 12GWh energy storage battery project; Phase II construction of an annual production of 12GWh energy storage battery project; Phase III construction of an annual production of 12GWh energy storage battery project. Among them, the first phase of the project is planned to commence construction by the end of September 2023 and be completed and put into operation by the end of December 2024.

Zhongna Energy Sodium Battery Project Settled in Guangde, Anhui

On May 22nd, the Zhongna Energy sodium ion battery project with a total investment of 10 billion yuan was signed and settled in Guangde, Anhui.

The total investment of this project is about 10 billion yuan, and it will build a mass production base for 20GWh energy storage batteries and 10GWh energy storage systems. The project will achieve an annual output value of nearly 13 billion yuan after reaching full production capacity, and can drive a series of upstream and downstream cooperative enterprises to achieve production capacity landing.