Fluorochemical Weekly Report: Strong Costs Support Industry's Rising Mentality

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One week market

Refrigerant: The raw material continues to rise in price, and manufacturers have a strong mentality of being reluctant to sell and rising

This week, the continuous rise in raw material prices has led to a rapid increase in costs, and the supply side has a strong reluctance to sell, leading to a synchronous increase in mainstream refrigerant prices. 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 8% month on month compared to last week; Hydrofluoric acid is driven by costs and affected by the improvement of downstream demand, resulting in a rapid increase in price and maintaining a high level; Tetrachloroethylene has been affected by weak demand, resulting in a narrow range of price consolidation. The upward transmission of raw material prices has driven up the prices of mainstream refrigerants, with both R125 and R143a prices increasing; The R134a factory is reluctant to sell and prices are rising rapidly. The current downstream demand for refrigerants is relatively stable, and rising costs are a favorable driving factor for price increases. In addition, abnormal production of some products in mainstream factories such as Juhua, Feiyuan, and Dongyue has led to supply tightening. Under the dual positive impact, there is still a slight expectation of refrigerant prices rising in the short term.

Fluoropolymers: Rising prices of basic raw materials have a boosting effect on the entire industrial chain

This week, the upstream raw materials in the fluoropolymer market saw a significant increase, which strengthened the cost support for monomer products R22 and R142b. Although the supply and demand relationship is relatively loose, the price increase of basic raw materials such as calcium carbide, liquid chlorine, sulfuric acid, etc. If sustained, it will form a strong driving effect on the prices of downstream TFE series and VDF series products. From the perspective of the industrial chain, the rebound in upstream basic raw material prices has a boosting effect on the entire industrial chain, but the limited recovery of demand determines that the sustainability of price increases is poor. The fluoropolymer market will continue the game of effective supply and demand. Under the staggered influence of "quantity" and "price", TFE series and VDF series fluoropolymer products will remain generally stable, with limited volatility.

Fluorinated lithium salt: Loss pressure forces lithium salt factories that purchase raw materials to lower their prices, causing prices to hit bottom and rise

This week, downstream production fell short of expectations, demand for lithium carbonate cooled, and inventory pressure on production companies emerged, forcing prices to fall. As a result, the cost support for lithium hexafluorophosphate has further weakened, and due to excessive production capacity release, China's hexafluorophosphate production remains at a historical high. High intensity competition has led to a decline in hexafluorophosphate prices with costs. In the context of a weak market, downstream electrolyte and positive electrode material factories maintain low raw material inventory, with few transactions on the market, and weak demand has curbed product prices. Industry Online predicts that the growth of downstream main demand for power batteries is limited, and it is expected that the price of lithium carbonate may still be lowered. The price of lithium hexafluorophosphate will also fluctuate in the same direction as lithium carbonate. However, as the price of lithium carbonate further decreases, lithium salt factories that extract raw materials are facing pressure to lose money, and the start of operations is accordingly reduced. The on-site supply will further shrink, providing some support for lithium prices.

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Weekly Highlights

Fluorine raw materials

Yunnan Kunming plans to build an annual production of 50000 tons of anhydrous hydrogen fluoride as a by-product of phosphorus chemical industry

On August 17th, Yunnan Wengfuxiang Fengfluorosilicon New Materials Co., Ltd. announced its 30000 ton/year anhydrous hydrogen fluoride and 20000 ton/year electronic hydrofluoric acid projects.

According to the public announcement, the total investment of the project is 470 million yuan, located in the West Zone of the Chemical Industry Park of the Anning Industrial Park, Luqian Street, Anning City, Kunming City, Yunnan Province. The project will build a 30000 ton/a anhydrous hydrogen fluoride device and a 20000 ton/a electronic grade hydrofluoric acid device. The main construction content includes: AHF device, electronic grade hydrofluoric acid device main project, AHF product tank group, sulfuric acid/fluorosilicic acid/hydrofluoric acid tank group and other storage and transportation projects, as well as other public and auxiliary projects. In addition, the project has a cost advantage due to the by-product of phosphorus chemical industry, fluorosilicic acid.

Zhongjuxin plans to expand and renovate the capacity of electronic wet chemicals such as electronic grade hydrofluoric acid with an annual output of 38000 tons

On September 6th, the Zhizao New City Branch of the Quzhou Ecological Environment Bureau approved the expansion and renovation project of Zhejiang Kaisheng Fluorine Chemical Co., Ltd. for an annual capacity of 100700 tons of electronic wet chemicals.

The public announcement shows that the project is located in the existing factory of Kaisheng Company at No. 8 Nianhua Road, Zhizao New City, with a total investment of 450 million yuan. Through a series of construction and renovation, the company's electronic grade nitric acid, hydrochloric acid, hydrofluoric acid, mixed acid, BOE, and ammonia production capacity have increased by 30000 tons/year, 16000 tons/year, 38000 tons/year, 4100 tons/year, 4000 tons/year, and 3600 tons/year, respectively, resulting in a total production capacity of 45000 tons/year, 20000 tons/year, and 90000 tons/year for the above products of the enterprise, 5000 tons/year, 14000 tons/year, 6000 tons/year. This project co produces 15600 tons/year of industrial nitric acid, 40400 tons/year of industrial hydrochloric acid, 138 tons/year of industrial ammonia, and 829 tons/year of industrial grade hydrofluoric acid.

Fluoropolymer

Dongyue Proposed 1000 tons/year Fusible Polytetrafluoroethylene (PFA) Project

On September 6th, the Ecological Environment Bureau of Zibo City announced the 1000 ton/year fusible polytetrafluoroethylene (PFA) project of Shandong Dongyue Future Hydrogen Energy Materials Co., Ltd.

According to the public announcement, the project is located in Dongyue Fluorosilicon Materials Industrial Park, Huantai County, Zibo City, Shandong Province, with a total investment of 116 million yuan. The main construction of the project is a fusible polytetrafluoroethylene (PFA) polymerization device and post-treatment device. After completion, it can form an annual production capacity of 1000 tons of fusible polytetrafluoroethylene (PFA). The announcement also indicates that in the future, there will be one 100t/a perfluoropropyl vinyl ether (PPVE) production unit for hydrogen energy, which can provide a stable source of raw materials for PFA production. Given the good market prospects of PFA and the acceleration of the extension of the downstream product industry chain, the competitiveness of enterprises in domestic and foreign markets can be improved.

Juhua Co., Ltd.: The 2023H1 Giant Core Cooling Liquid Project has a revenue of 51 million yuan and a net profit of 10 million yuan

At the 2023 semi annual performance briefing held on September 1st, Juhua Group stated that the company's Juxin coolant project mainly produces products such as JHT electronic fluid series, JHLO lubricating oil series, and JX immersion coolant. In the first half of the year, the Juxin coolant project achieved a revenue of 51 million yuan and a net profit of 10 million yuan, and is still in the stage of market expansion and capacity climbing.

Meanwhile, regarding refrigerant quotas, Juhua Group stated that due to severe overcapacity of third-generation fluorine refrigerants and fierce competition for baseline quotas, product prices are at a relatively low historical level. Next year, enterprises will produce under the quota allocated by the state, and their supply capacity is limited by the quota. It is expected that the severe overcapacity contradiction highlighted in recent years will be effectively alleviated, which is conducive to a reasonable return to product prices.

Fluorinated lithium salt

Guizhou Fuquan proposes a comprehensive utilization project of defluorinated slag with an annual output of 10000 tons of sodium fluoride

On September 6th, the Fuquan Branch of the Ecological Environment Bureau of Qiannan Prefecture announced the comprehensive utilization of defluorinated slag by Fuquan Yingjie Chemical Co., Ltd., which produces 10000 tons of sodium fluoride annually.

According to the public announcement, the total investment of the project is 35 million yuan, located in Longchang Town Industrial Park, Fuquan City, Qiannan Buyi and Miao Autonomous Prefecture, Guizhou Province. A sodium fluoride production line is constructed, which uses defluorinated slag ammoniation reaction to produce ammonium fluoride, sodium fluoride, and silicon dioxide. The separated ammonium fluoride solution is decomposed with sodium sulfate to produce sodium fluoride and ammonium sulfate solution, and the sodium fluoride is separated and dried to obtain industrial sodium fluoride; Ammonium sulfate solution is evaporated, concentrated, crystallized, separated, and dried to obtain ammonium sulfate. After completion, it will form an annual production capacity of 10000 tons of sodium fluoride, 11000 tons of ammonium sulfate, and 2500 tons of white carbon black.

Qinghai Proposed 20000 Tons/Year Salt Lake Quality Improvement Lithium Carbonate Project

On August 28th, Chaidamu Daily announced the 20000 ton/year high-quality lithium carbonate project of Qinghai Huixin New Material Technology Co., Ltd.

According to the public announcement, the project covers an area of approximately 223 acres and is located in the Chaerhan Metal Magnesium Integrated Industrial Park. It adopts the "continuous separation adsorption+membrane method for impurity removal and concentration+lithium precipitation+lithium precipitation mother liquor recovery" mature salt lake lithium extraction process, and uses the discharged old brine from the salt lake as the raw material to build an annual production capacity of 20000 tons of high-quality lithium carbonate, producing GB/T23853-2022 (I) type lithium carbonate products.

Xingfa Group's 200000 ton/year iron phosphate project has been put into operation

On the evening of September 3rd, Xingfa Group (600141) announced that its holding subsidiary, Hubei Xingyou New Energy Technology Co., Ltd., had recently completed the installation, debugging, and trial production preparation of the electromechanical instrument for the "new 200000 ton/year iron phosphate project (Phase I 100000 ton/year iron phosphate)", and the production line has officially been fully put into operation.

Xingfa Group stated that based on the trial production of the device, the project has a high degree of automation, stable and reliable process, good product consistency, and overall superior quality. The completion and operation of this project will help the company leverage its advantages in industrial integration, accelerate the improvement of the new energy industry layout, promote industrial transformation and upgrading, and cultivate new profit growth points.

In terms of lithium battery materials, in addition to the first phase of the 200000 ton/year battery grade iron phosphate project in Hubei Xingyou, the 300000 ton/year lithium iron phosphate project in Hubei Youxing, a joint venture of Xingfa Group, and the 100000 ton/year battery grade lithium dihydrogen phosphate project in Phosphorus Fluoride Lithium Industry will also be completed and put into operation inland in.

The shipment volume of lithium hexafluorophosphate in August was about 4000 tons, and the pace of product production has slowed down compared to the original plan

At the performance briefing in the first half of 2023, Dofluoro stated that the price of lithium hexafluorophosphate will decline to a certain extent with the decline of lithium carbonate price, and it is expected that the price of lithium hexafluorophosphate will further decline in the second half of the year.

In terms of production capacity, Dofluoro plans to have a production capacity of 80000 to 100000 tons of lithium hexafluorophosphate by 2024. At present, the company's capacity utilization rate is at a relatively high level, but market demand is slightly weaker than previously expected. Therefore, the overall pace of production and new production capacity of the company has slowed down compared to the original plan. The company will continue to build new production capacity in the second half of the year, and is expected to gradually release new production capacity in June next year.

In terms of shipment volume, the shipment volume of lithium hexafluorophosphate in the first half of the year was between 16000-17000 tons, and it is expected that there will be shipments between 12000 and 13000 tons in the third and fourth quarters respectively. Among them, the company's shipment volume in August was about 4000 tons, and currently its inventory level remains at a relatively low level.