Fluorochemical Weekly Report: Rising Costs Support Product Prices

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One week market

Refrigerant: Policy benefits add up to higher costs, factory confidence increases

This week, the production and sales of refrigerants in the market have remained weak and stable, driven by rising costs, and some product prices have risen. Weekly market characteristics: The production and sales of upstream basic raw material products have improved, and prices have increased by varying degrees. Among them, the price of sulfuric acid in the East China market has increased by more than 30% month on month. The supply and demand of fluorite powder and hydrofluoric acid are generally balanced, and the market is consolidating horizontally. Trichloroethylene is affected by strong costs and tight supply, and the price increase is narrow, driving the price of R134a. At the recent HFCs quota allocation exchange meeting, it was stated that 65% of the HCFC contribution value will not be distributed temporarily as a national reserve for performance safety margin. There is still controversy over the specific content of quota trading and quota conversion. Therefore, quota management policies have determined that global supply is limited, and the HFCs refrigerant market will maintain a long-term positive situation. In summary, the continuous rise in raw material prices and favorable policies have effectively boosted the confidence of factories, and it is expected that the prosperity of the refrigerant market will gradually rebound in the future.

Fluoropolymers: Weak supply-demand relationship, mainstream products temporarily stable and on the sidelines

This week, the core monomer products R22 and R142b in the fluoropolymer market have strong raw material usage prices, which provide solid cost support for TFE series and VDF series. The overall supply and demand relationship is weak, leading to a flat market. Mainstream products are temporarily stable and wait-and-see. From the perspective of the industrial chain, extending the industrial chain upwards by factories is beneficial for ensuring supply and reducing costs. Under the co game of "quantity and price", TFE series and VDF series fluoropolymer products have shown weak short-term growth and will continue to accumulate momentum for consolidation. The future market improvement will be more determined by the speed of demand recovery in the application industry. Due to the significant differentiation of supply and demand contradictions among different products, the intensity of the supply and demand game for different products also varies greatly. However, from the current price level, there is not much room for further price decline, and most products may consolidate at the bottom.

Fluorinated lithium salts: Production capacity continues to release, and market demand urgently needs improvement

This week, the supply of lithium carbonate is still at a high level, with ample supply on the market. Coupled with the impact of weak demand, prices are moving downwards, and the mentality of enterprises in the chain is weak. Against the backdrop of a declining market, hexafluoride enterprises have controlled their operating load, but the rapid growth of production capacity has intensified industry competition, with price drops exceeding cost changes. Downstream electrolyte and positive electrode material factories are driven by a bearish mentality and have limited orders for lithium salts, mainly consuming inventory. Industry Online predicts that the increase in lithium carbonate shipments will limit its cost support for lithium hexafluorophosphate. It is expected that the price of lithium carbonate may still be lowered, and the price of lithium hexafluorophosphate will fluctuate in the same direction as lithium carbonate.

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Weekly Highlights

Refrigerant

Yonghe Shares: Revenues increase without profit increase in the first half of 2023, and profitability rebounds in the second half of the year

On the evening of August 11th, Yonghe Shares released a semi annual performance report stating that its operating revenue for the first half of 2023 was approximately 2.08 billion yuan, an increase of 17.78% year-on-year; The net profit attributable to shareholders of the listed company is approximately 110 million yuan, a year-on-year decrease of 19.79%; The basic earnings per share were 0.29 yuan, a year-on-year decrease of 19.44%.

The semi annual report also shows that the company achieved a total operating revenue of 1.141 billion yuan in the second quarter, an increase of 10.42% year-on-year and 21.51% month on month; The net profit attributable to the parent company was 80.8168 million yuan, an increase of 25.11% year-on-year and 176.58% month on month; The deduction of non net profit was 77.8608 million yuan, an increase of 33.98% year-on-year and 233.51% month on month.

Sanmei Corporation plans to invest 1.04 billion yuan in the construction of projects such as intelligent packaging of 35 million bottles and cans of refrigerant annually

On August 10th, Sanmei announced the annual intelligent packaging of 35 million bottles and cans of refrigerant production line and supporting facilities project.

In the announcement, Sanmei Co., Ltd. stated that in order to adapt to the company's business development scale, improve production efficiency and level, optimize the existing factory layout, and improve resource utilization, the company plans to invest approximately RMB 1.04 billion (ultimately based on the amount recorded by the competent department) to build the "annual intelligent packaging of 35 million bottles and cans of refrigerant production line and supporting facilities project". The project is planned to be located in the New Materials Industrial Park, Huchu Industrial Zone, Shuxi Street, Wuyi County, Jinhua City, Zhejiang Province, with a construction period of 2 years.

Fluoropolymer

Proposed 30000 ton PVDF and lithium hexafluorophosphate projects in Urumqi

On July 20th, the website of Xinjiang Ecological and Environmental Protection Industry Association announced the green high-end fine fluorine chemical new material base project of Urumqi Fuduoduo New Materials Co., Ltd. The public announcement shows that the total investment of the project is 602 million yuan, and it is located in the Zhundong Industrial Park in Urumqi. The construction period is 12 months, and it is expected to start construction in September 2023 and be completed and put into operation in June 2025.

The overall plan of the project is to construct 100000 tons/year of anhydrous hydrogen fluoride (used for supporting downstream deep processing products), 70000 tons/year of electronic grade hydrofluoric acid, 180000 tons/year of anhydrous aluminum fluoride, 554400 tons/year of R142b (used for supporting production of PVDF), 30000 tons/year of PVDF, and 30000 tons/year of lithium hexafluorophosphate. The project is divided into two phases: the first phase is to construct 100000 tons/year of anhydrous hydrogen fluoride, 70000 tons/year of electronic grade hydrofluoric acid, and 180000 tons/year of anhydrous aluminum fluoride projects; The second phase will construct 554400 tons/year HCFC-142b, 30000 tons/year PVDF, and 30000 tons/year lithium hexafluorophosphate projects.

Jusheng Fluorochemical proposes a 4000 ton/year TFE downstream high-end fine product technology renovation project

On July 31st, the website of Zhizao New City Branch of Quzhou Ecological Environment Bureau announced the 4000 ton/year TFE downstream high-end fine product technology renovation project of Zhejiang Jusheng Fluorochemical Co., Ltd.

According to the public announcement, the total investment of the project is 79.2554 million yuan, located in the existing factory area of Zhejiang Jusheng Fluorochemical Co., Ltd. in Kecheng District, Quzhou City, Zhejiang Province. The project utilizes the existing site and facilities, does not build a new factory, and builds a 3200t/a hydrofluoroether (HFE) series of products, resulting in a total fine product production capacity of 4000t/a. This project mainly adds 800t/a tetrafluoroethyl methyl ether (HFE-254), 400t/a tetrafluoroethyl tetrafluoropropyl ether (D2), 1500t/a tetrafluoroethyl trifluoropropyl ether (D3), and 500t/a tetrafluoroethyl octafluoropentyl ether (D4). The original 400t/a tetrafluoropropanol (TFP) and 400t/a hydrofluoroether are added.

Fluorinated lithium salt

Haohua Technology plans to fully acquire Sinochem Blue Sky for over 7.2 billion yuan and raise funds to expand production of products such as electrolytes

On the evening of August 14th, Haohua Technology (600378) announced its intention to purchase 100% equity of Sinochem Blue Sky for 7.244 billion yuan, while also raising equivalent funds to invest in the construction of 11 projects such as PVDF and lithium-ion battery electrolyte.

Specifically, Haohua Technology plans to issue shares to Sinochem Group to purchase its 52.81% stake in Sinochem Blue Sky, and to issue shares to Sinochem Asset to purchase its 47.19% stake in Sinochem Blue Sky. After the completion of this transaction, Sinochem Blue Sky will become a wholly-owned subsidiary of Haohua Technology.

Haohua Technology also plans to raise supporting funds through non-public issuance of shares, with a total fundraising amount of no more than 7.244 billion yuan, to be invested in the construction of 11 projects: the new 20000 ton/year PVDF project, the 200000 ton/year lithium-ion battery electrolyte project (Phase I), the annual production of 19000 tons of VDF, 15000 tons of PVDF, and the supporting 36000 tons of HCFC-142b raw material project (Phase II), the new 1000 ton/year perfluoroalkene project, and the new 3000 ton/year trifluoromethylpyridine project Haitang 1901 industrialization project (2000 tons/year FEC project), newly built 150000 tons/year lithium-ion battery electrolyte project (Phase I), expanded 3000 tons/year CTFE and 10000 tons/year R113a co production project, newly built 200 tons/year PMVE project, 1300 tons/year fluorine containing electronic gas renovation and expansion project, replenished working capital or repaid debts.

Ganfeng Lithium Battery Annual Production of 10GWh New Lithium Battery and Energy Storage Headquarters Project Officially Commences

On the morning of August 10th, the opening ceremony of the Ganfeng Lithium Battery (Dongguan) annual production of 10GWh new lithium batteries and energy storage headquarters project was held in the strategic emerging industry base of digital economy in Dongguan City (Machong Town).

The total investment of this project is 5 billion yuan, with a land area of approximately 325.5 acres and a building area of approximately 395000 square meters. It is mainly engaged in the research and development and production of lithium iron phosphate, semi-solid battery cells, light power batteries, outdoor portable energy storage power supplies, household energy storage, and industrial and commercial energy storage systems. The project is expected to produce 1 billion watt hours of battery cells, 300 million watt hours of lightweight power packs, 200 million watt hours of outdoor portable energy storage packs, and 500 million watt hours of household energy storage and industrial and commercial energy storage systems, with an annual output value of approximately 11 billion yuan.

Jiuhuan Energy Storage 400000 ton Iron Phosphate Project Starts in Binzhou, Shandong

On the morning of August 16th, the first phase of the 400000 ton iron phosphate precursor project of Jiuhuan Energy Storage Technology Co., Ltd. was inaugurated at Jiuhuan Energy Storage Technology Co., Ltd. in Bincheng District, Binzhou City, Shandong Province.

Jiuhuan Energy Storage Technology Co., Ltd. has launched a new production process for iron phosphate and a new material system for iron phosphate precursors, which is the first in China. Compared with traditional processes, this process and products focus on high-end customization and have the characteristics of "two new, three high, two low, and no three waste". 'Two new' refers to the new process and material system of lithium iron phosphate precursor materials produced by new processes; The "three highs" refer to the higher energy density, low-temperature performance, and comprehensive benefits of lithium iron phosphate batteries produced from precursor materials; 'Two low' refers to low energy consumption and low sewage output; In addition, this process recycles and utilizes waste acid and exhaust gas from within and outside the province, producing high-quality sewage treatment agents, and also has various advantages such as "no three wastes" emissions.