Fluorochemical Weekly Report: HFC Refrigerant Quota Plan Confirmed, Factory Stock Pending Increase

oneOne week market

Refrigerant: Price fluctuates with cost under a loose supply pattern

This week, upstream raw material prices continued to loosen, and overall production and sales were weak, causing a downward trend in the refrigerant market. Weekly market characteristics: weak demand for upstream basic raw materials such as sulfuric acid, methanol, calcium carbide, and methane chloride, resulting in a narrow price decline; Due to the maintenance of the equipment in Luxi, the price of PCE has increased significantly; The prices of other raw materials fluctuate and maintain stable operation. The narrow decline in raw material prices on the cost side has led to a weakening of refrigerant cost support. However, recently, the implementation plan for HFCs refrigerant quotas has been officially released, and factories are no longer rushing at low prices and losing money. Instead, they are restoring rational production and sales, with a strong mentality of reducing production and maintaining prices. In addition, due to the upcoming expiration of export licenses and long shipping schedules, foreign trade orders are coming to an end, and refrigerant factories are cautious in receiving orders. It is worth noting that quota control will be implemented for the production, sales, and use of HFCs refrigerants in 2024. Prior to the arrival of the new fiscal year, some factories have suspended quotation and order taking due to early inventory layout considerations. It is expected that a decrease in market supply will support the consolidation operation of refrigerants in the future market.

Fluoropolymers: Price Fluctuation Accompanied by Cost Fluctuations in a Loose Supply Pattern

This week, cost support in the fluoropolymer market continues to weaken, and the loose supply and demand relationship has determined that mainstream products remain mainly weak. The prices of the main monomer raw materials, R22 and R142b, have remained stable under pressure, while the cost support for TFE and VDF series fluoropolymers has weakened. Considering that the prices of mainstream fluoropolymer products have already bottomed out to low levels, there is limited room for further decline, and the overall market is in a dilemma of consolidation. From a product perspective, the price of fluorite, a popular bullish product in the upstream, quickly rebounded after a jump, reflecting the extremely low market acceptance of high costs. Other products such as chloroform and hydrofluoric acid are also affected by downstream production and sales contractions, leading to price correction and consolidation. In summary, the multiple negative effects of fluorinated polymer products in the short term are dominant, and the stalemate of multiple factor games will continue in the future.

twoWeekly Highlights

Refrigerant

2024 HFC refrigerant quota plan officially issued

The Plan requires that production and import units that meet the requirements should submit applications and related materials for HFCs production quotas, domestic production quotas, and import quotas for the year 2024 to the Ministry of Ecology and Environment before November 24, 2023.

The 'Plan' states:

The total production quota of HFCs in China in 2024 is 1.853 billion tCO ₂;

The total import quota of HFCs in China in 2024 is 10 million tCO ₂, with the import quota based on the maximum annual controlled use import volume, and an additional 20% increase on the national import baseline value;

The total amount of domestic production quotas for HFCs in China in 2024 is 895 million tCO ₂. The total amount of domestic production quotas for HFCs in 2024 is the baseline value of national HFCs usage minus the total import quota.
 

The United States launches an anti circumvention investigation into imported hydrofluorocarbon refrigerants from China

On October 30, 2023, at the request of the HFC Alliance in the United States, the US Department of Commerce launched an anti circumvention investigation into hydrofluorocarbon refrigerants (HFCs) imported from China, examining whether hydrofluorocarbon refrigerants originating in China were made into R-410B in Mexico and exported to the United States through Mexico, and further processed into hydrofluorocarbon refrigerants in the United States to avoid current anti-dumping measures.

Since July 16, 2015, this has been the ninth anti-dumping investigation initiated by the United States against imports of hydrofluorocarbons from China.
 

Fluoropolymer

The total investment of the proposed fluorine new material industry base project in Xiangxiang, Hunan Province is 5 billion yuan

On November 7th, the construction project of Hunan Light Industry Salt Industry Group Xiangxiang Fluorine (Salt) Chemical New Energy and New Materials Base was officially signed. Li Zhiyong, Deputy Secretary of the Party Committee and General Manager of Light Salt Group, stated that the group will upgrade and transform production lines such as anhydrous aluminum fluoride and anhydrous hydrofluoric acid, further extend the industrial chain, explore the entry into the fluorinated fine chemicals and ultra-pure wet electronic chemicals industries, and focus on expanding UPSSS grade hydrofluoric acid, fluorinated pharmaceuticals, and pesticide intermediates.

The first phase of the signed project has an investment of approximately 5 billion yuan, utilizing advanced domestic production processes and equipment, renovating existing production lines, and planning to build an 80000 ton/year anhydrous hydrogen fluoride production line, supporting downstream electronic grade and ultra pure hydrofluoric acid, fluorobenzene, fluoropyridine, fluoroaniline and other fluorine fine chemicals, as well as new energy material industries such as lithium difluorosulfonymide and sodium hexafluorophosphate.

Inner Mongolia Mingyue Fluorine Materials Project Phase I will be put into operation by the end of November

On November 7th, Chifeng Daily reported that the builders of the Mingyue High end Fluorine New Materials Industrial Park project are fighting hard in the snow, and the construction enthusiasm of the project is not decreasing. Yu Changguo, Chairman of Inner Mongolia Mingyue New Materials Co., Ltd., introduced that with the rapid expansion of new energy vehicles in recent years, PVDF, as the core material of its positive electrode material, fully meets the national strategic needs. It is also an important material for new materials, new environmental protection, and new energy. The first phase of the project has entered the single machine and linkage testing stage, and is planned to start trial production by the end of November. The second phase is expected to be completed and put into operation by the end of 2025.

In the first phase of the project, two identical anhydrous hydrogen fluoride production lines with a total production capacity of 70000 t/a, a calcium carbide loading and unloading station and a calcium carbide crushing device area, one acetylene production line, two identical 1,1-difluoroethane (HFC-152a) production lines with a total production capacity of 100000 t/a, and an incineration device will be constructed.

The joint proposal of China and agriculture to build projects such as Bufloxacin technical solution has formed a domestic first mover advantage

On October 31st, Shandong Zhongnong United Biotechnology Co., Ltd. (referred to as "Zhongnong United") announced that the company plans to invest in the construction of a technology transformation center project, a 700t/a Buflufen raw material project, a tank area, warehouse, and production supporting engineering project through its wholly-owned subsidiary Shandong United Pesticide Industry Co., Ltd., with an estimated total investment of 582 million yuan.

The China Agriculture Union stated that the company's investment in this project construction is to optimize and enhance the existing technology, product structure, and production supporting capacity, thereby enhancing the company's comprehensive competitiveness. The construction of the Bufloxacin acaricide raw material project is beneficial for the company to optimize its product structure and form a domestic first mover advantage for this raw material product.

Among them, the 700t/a Bufloxacin raw material project is implemented and constructed by Shandong United Pesticide Industry Co., Ltd. The project is located in the factory area of Shandong United Pesticide Industry Co., Ltd. in Fanzhen, Tai'an City, Shandong Province, with a total investment of about 167 million yuan. The construction of a Bufloxacin raw material production line will reach an annual production capacity of 700 tons after completion.

According to publicly available information, buflomedin is a new acyl acetonitrile acaricide developed by Otsuka Chemical Company in Japan. Its patent expires in 2023 and it is a non endothermic acaricide that mainly has contact and gastric toxicity effects. It has high activity against eggs, mites, and adult mites at all stages, especially against juvenile mites. It has good quick effect and long shelf life, and can be used in fruit trees, vegetables, and other fields Various crops such as tea trees and flowers.

Butafluoride has a good killing effect on various stages of harmful mites, especially on juvenile mites, with a more thorough killing effect. There is no cross resistance with existing insecticides, and the control effect is significant against pest mites that have already developed resistance. Butafluoride has high activity at both high and low temperatures, and is less affected by temperature. It is an ideal acaricide for controlling harmful mites in winter greenhouse crops and late autumn crops. Bufloxacin can be mixed with acaricides such as spiromyr, avermectin, spiromyr ethyl ester, and pyridaben, and the synergistic effect is very obvious. It not only delays the resistance of pests, but also improves the control effect.