Fluorochemical Weekly Report: Rising Raw Materials Build Cost Support, Market Enters a Strong Rising Cycle

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One week market

Refrigerant: Upstream basic raw material prices are expected to rise strongly, and downstream products are passively following the trend

This week, driven by the continuous rise in raw material prices and strong demand for foreign trade, the supply side has a strong mentality of being reluctant to sell. However, during the National Day holiday, logistics and transportation difficulties have limited actual transactions, and mainstream refrigerant prices have fluctuated at high levels. Weekly market characteristics: The tight supply of upstream basic raw materials such as fluorite powder, hydrofluoric acid, and TCE has driven up prices, which has boosted the prices of downstream refrigerants; The prices of other raw materials fluctuate at high levels. Overall, the continuous increase in raw material prices provides strong support for refrigerant costs. In the future, as temperatures in the north decrease and fluorite mining is limited, tight supply will continue to drive the price of fluorite powder. The price of hydrofluoric acid will also rise, and the expectation of refrigerant cost increase is strong. In addition, considering the long shipping schedule and export license cycle, as the fourth quarter approaches, overseas customers will concentrate on procurement and export orders will be sufficient to support the factory's production reduction and upward trend. Therefore, under the multiple positive impacts of continuous rising costs, strong demand for foreign trade, and a shortage of some raw materials, the refrigerant market is still operating strongly in the short term.

Fluoropolymers: Cost Driven Strong Short Term Market Stabilizes and Rebounds

This week, the upstream raw materials in the fluoropolymer market continued to rise, driving the stable and rising prices of monomer raw material product R22, and the low end prices of R142b. Although the supply and demand relationship between TFE series and VDF series fluoropolymers is weak, the rising prices of core raw materials have led to stable and rising prices of cost driven products. In terms of specific products, upstream raw material products such as fluorite powder, hydrofluoric acid, and chloroform have seen significant recent increases. In a weak market, the strong cost increase has a significant impact on the overall industry chain. In summary, it is predicted that although the supply and demand relationship of fluorinated polymers may not improve significantly in the short term, the increase in factory maintenance and cost increases will drive product prices to stop falling and rebound. In the future, the overall market will continue to play the game of effective supply and demand.

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Weekly Highlights

Fluorine raw materials and refrigerants

Frequent accidents in fluorite mines, increasing safety supervision in mining areas

On October 16th, the Non Coal Mine Supervision Department of the National Mine Safety Supervision Bureau issued a document stating that at around 16:00 on October 14th, 2023, a ground collapse accident occurred at the Sanbaoliga Sumu fluorite mine (expanded mine) of the Inner Mongolia Sunite Right Banner Navy Fluorite Co., Ltd., resulting in the death of two people. At around 17:30 on October 14, 2023, another fluorite mine (rectification mine) experienced a water leakage accident in the goaf during the rectification process, causing two people to be trapped. Currently, full efforts are being made to implement rescue measures.

The Non Coal Mine Supervision Department stated that the current seasonal safety risks are intertwined with the risks brought about by the rush to work and production in the fourth quarter. Non coal mine safety supervision departments at all levels and non coal mining enterprises should always tighten the safety production line, effectively carry out safety prevention work in the fourth quarter, and resolutely curb the occurrence of major and above accidents.

Industry Online believes that in the context of the "Opinions on Further Strengthening Mine Safety Production", the development of fluorite mines is already limited, and gradually increasing safety supervision will undoubtedly have a further impact on mine production. The reduction in on-site supply may push the price of acid grade fluorite powder to completely break through the 4000 yuan/ton mark.

Europe will significantly reduce fluoride gas and ODS emissions, and the semiconductor industry may not be constrained

Recently, the European Council and the European Parliament reached a temporary agreement on strengthening rules to significantly reduce greenhouse gas emissions of fluorinated gases and ozone depleting substances. The temporary agreement stipulates that the consumption of hydrofluorocarbons (HFCs) in the European market will be completely phased out by 2050. On the supply side, the production of HFCs should be gradually reduced to 15% by 2036.

Whether it is the production or consumption of HFCs, the allocation quota will decrease year by year based on a compact reduction schedule. However, compared to before, this temporary agreement introduced higher quota allocation standards in the early stages of the reduction. At the same time, the European Commission proposes that the semiconductor industry will not be bound by the HFCs quota system. By 2040, the European market will further review the feasibility of fully phasing out HFCs.

Fluoropolymer

Fujian Sannong plans to produce 4600 tons of fluorinated fine chemicals such as hydrofluoroether per year

On October 9th, Sanming Daily announced the second phase technical transformation project of Fujian Sannong New Materials Co., Ltd. (hereinafter referred to as Sannong New Materials) fluorine fine chemicals.

According to the public announcement, the project is located in the Huangsha New Materials Recycling Economy Industrial Park in Sanming City, with a planned investment of 50 million yuan. It plans to build a new series of fluorine ether products of 4600t/a, including 1000t/a of hydrofluoroether (HFE-254), 1000t/a of hydrofluoroether (HFE347), 2000t/a of hydrofluoroether (HFE-374), 500t/a of hydrofluoroether (HFE-458), and 100t/a of perfluoropropyl vinyl ether (PPVE); Iodine substituted perfluorinated series products are 35t/a, including 20t/a of diiodotetrafluoroethane, 10t/a of diiodooctafluorobutane, and 5t/a of diiodoperfluorohexane. The technical transformation project is expected to be put into operation in June 2024.

Anhui Lingda High tech Materials Proposed Annual Production of 3000 tons of Fluorinated Fine Chemicals Project

On October 9th, the website of the People's Government of Dingyuan County announced the annual production of 3000 tons of fluorinated fine chemicals by Anhui Lingda High tech Materials Co., Ltd.

The total investment of this project is about 250 million yuan, located in the Dingyuan Salt Chemical Industrial Park in Anhui. After completion, it can form an annual production capacity of 2300 tons of perfluorohexane, 300 tons of hexafluoroepoxypropane oligomer, 200 tons of perfluoropolyether, and 200 tons of perfluoroalkyl ethyl chloroacrylate.