Fluorine Chemical Weekly Report: Weak supply-demand relationship, short-term game consolidation

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One week market

Refrigerant: Insufficient Demand Support, Market Fluctuation Operation

This week, the prices of upstream raw materials have temporarily stabilized, and due to insufficient demand support, the refrigerant market is operating in a narrow range of fluctuations. Weekly market characteristics: Affected by the decrease in refrigerant procurement, the supply of upstream basic raw materials such as fluorite powder, hydrofluoric acid, TCE, and PCE has shifted from tight to relatively loose, with prices temporarily stable but expected to slightly decline; The prices of other raw materials are affected by weak demand and fluctuate in a narrow range. Although the cost of refrigerants is high, the market is mainly dominated by foreign trade orders, while the domestic market is sluggish, with small order volumes and low prices. Due to the upcoming expiration of export licenses and long shipping schedules, foreign trade orders are nearing the end, and refrigerant factories are cautious in receiving orders and focusing on on-demand production. In addition, the production and sales of refrigerants in the market are weak, and there is strong resistance towards high priced raw material products. There is a clear expectation of a decline in upstream raw material product prices, and it is expected that refrigerant prices will continue to fluctuate in a narrow range in the future.

Fluoropolymers: Weak supply-demand relationship with acceptable cost support

This week, the cost support from upstream in the fluoropolymer market was robust, with the prices of the main monomer raw materials R22 and R142b being strong and stable. Although the supply and demand relationship between TFE series and VDF series fluoropolymers is weak, there is limited room for further decline after a long period of price bottoming out. The cost increase is difficult to drive the prices of the two major series of fluoropolymer products to stabilize and rise. From a product specific perspective, upstream raw material products such as fluorite and hydrofluoric acid maintain stability and have certain continuity in supporting the cost of fluorine chemical products throughout the entire industrial 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 support are still acceptable. In the future, the game market of effective supply and actual demand will continue, with stable operation as the main focus.

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Weekly Highlights

Fluorine raw materials and refrigerants

US Environmental Protection Agency proposes to ban the use of trichloroethylene

On October 23rd, the US Environmental Protection Agency (EPA) announced a proposal to ban the use of trichloroethylene (TCE). Trichloroethylene is a highly toxic chemical that poses serious health risks, including cancer, neurotoxicity, and reproductive toxicity. In the field of fluorochemicals, trichloroethylene can be used to produce R134a, which is an important automotive air conditioning refrigerant.

According to the Toxic Substances Control Act, this action taken by the EPA will protect people from these health risks by prohibiting the production, processing, and distribution of TCE for all purposes.

The proposed new regulations will take effect within one year for consumer goods and most commercial uses of trichloroethylene. The proposal will provide a longer transition period for the remaining limited commercial and industrial uses, such as key uses for federal agencies, battery separators for manufacturing electric vehicle batteries, and the gradual reduction of certain refrigerants nationwide as the industry transitions towards more climate friendly refrigerants.

2024 HFCs quota plan officially approved

The Ministry of Ecology and Environment announced that on October 24th, the Minister of Ecology and Environment, Huang Runqiu, presided over a ministerial executive meeting to review and approve in principle the "2024 Total Quota Setting and Distribution Plan for Hydrofluoric Carbides". Please click on 'Interpretation | HFCs Refrigerant Quota Implementation Plan' to interpret the 'Plan'.

The meeting emphasized that after the issuance and implementation of the "Plan", policy interpretation and industry enterprise training should be carried out, and quota application acceptance, review, publicity, and issuance work should be done well. We need to strengthen daily supervision and management, organize annual verification of quota implementation, supervise enterprises to legally produce and operate within the quota, and punish illegal enterprises in accordance with the law and regulations.

Jinshi Resources: In Q3 2023, the company's revenue increased by 155% year-on-year and net profit increased by 97% year-on-year

On October 25th, Jinshi Resources released its third quarter report for 2023.

The report shows that during the reporting period, Jinshi Resources achieved a revenue of 596 million yuan, a year-on-year increase of 154.78%; The net profit attributable to shareholders of the listed company was 120 million yuan, a year-on-year increase of 103.27%; The net profit attributable to shareholders of the listed company after deducting non recurring gains and losses was 120 million yuan, a year-on-year increase of 97.41%.

In the first three quarters of 2023, the quantity and price of fluorite products from Jinshi Resources increased simultaneously. From January to September, it produced approximately 360000 tons of fluorite products and sold 330600 tons of self-produced fluorite products. Among them, the unit price of acid grade fluorite powder was 2739 yuan/ton, an increase of 352 yuan/ton year-on-year; The unit price of high-grade block ore is 2124 yuan/ton, an increase of 86 yuan/ton year-on-year.

In the first three quarters of 2023, the Jinshi Resource Baosteel "Selection and Chemical Integration" project began to contribute profits. From January to September, the Baosteel Jinshi beneficiation project achieved an investment income of 13.7139 million yuan. The Jin'ebo Fluorine Chemical Project was tested with materials at the end of July 2023, producing a total of 9200 tons of hydrofluoric acid products and selling 7300 tons of hydrofluoric acid products; In addition, Jin'ebo Company sold a total of 47500 tons of Baosteel's acid grade fluorite powder from January to September. Jin'ebo Company achieved a revenue of 178.7212 million yuan and a net profit of 12.2805 million yuan (the third quarter was 11.4164 million yuan), of which 6.2631 million yuan was attributable to shareholders of the listed company.

Fluoropolymer

Gansu Wuwei Proposed 6500 Tons/Year Fluorinated Pharmaceutical Project

Recently, the website of the Wuwei Environmental Protection Association announced the construction of three new product projects by Wuwei Guangda Technology Co., Ltd.

According to the public announcement, the project is planned to be located in the Hongshagang Industrial Concentration Zone in Minqin, Wuwei, with a total investment of 70 million yuan. After the completion of the project, an annual production line of 1000 tons of 2-amino-3-chloro-5-trifluoromethylpyridine, 500 tons of 2-methylamino-3-chloro-5-trifluoromethylpyridine acetate/hydrochloride, and 5000 tons of 2,3-dichloro-5-trifluoromethylpyridine will be formed.

The company also stated that compared to raw materials and formulations, the export of intermediates is much less restricted by importing countries. In recent years, many large pharmaceutical companies in the United States and Europe have gradually shifted their production of pharmaceutical intermediates to developing countries from the perspective of saving production costs and environmental requirements, which has brought excellent business opportunities to China's pesticide intermediate production enterprises. The company believes that due to years of accumulated technological advantages and huge demand in the future pesticide market, China's pesticide intermediate industry holds enormous development potential.

The annual production of 3250 tons of nitrogen trifluoride and 500 tons of LiFSI by China Shipbuilding Special Gas is expected to be put into operation in December

On October 27th, China Shipbuilding Special Gas Corporation announced that its initial public offering of stocks raised funds for investment projects, including the "annual production of 3250 tons of nitrogen trifluoride project", "annual production of 500 tons of lithium bis (trifluoromethanesulfonyl) imine project", and "annual production of 1500 tons of high-purity hydrogen chloride expansion project", will be postponed until they reach their intended usable state.

China Shipbuilding Special Gas also stated that the project construction has been completed and is in the debugging stage. Relevant procedures are being actively processed before trial production. Based on the current actual progress of the above project and subsequent procedural requirements, in order to ensure the steady implementation of the fundraising project and reduce the risk of using the fundraising funds, after careful research, China Shipbuilding Special Gas has extended the deadline for the aforementioned fundraising project to reach its intended usable state to December 2023.

Nanda Optoelectronics has launched an 8400 ton high-purity electronic grade nitrogen trifluoride project, ranking first in the world

On October 23, 2023, the annual production of 8400 tons of high-purity electronic grade nitrogen trifluoride project of Nanda Optoelectronics (Ulanqab) Co., Ltd. was successfully registered. It is reported that the total investment is 600 million yuan, mainly for the construction of production facilities such as electrolysis plant and post-treatment plant, as well as other corresponding facilities and projects. The planned construction period is from May 2024 to December 2028.

On December 10, 2021, Nanda Optoelectronics announced its investment in the construction of a 7200 ton annual production of nitrogen trifluoride project. It is reported that the project has been gradually put into operation since the second year of construction (i.e. 2022).

At present, SKM's nitrogen trifluoride production capacity is 13500 tons, accounting for over 40% of the global share of nitrogen trifluoride. Its production and sales are currently ranked first in the world. The Nanda Optoelectronics Inner Mongolia project, combined with the production capacity of Feiyuan gas, will have a total annual production capacity of nearly 20000 tons of electronic grade nitrogen trifluoride. Overcoming SKM to become the world's largest supplier of electronic grade nitrogen trifluoride.