Fluorochemical Weekly Report: Fluopolymer Prices Decline, Supply and Demand Contradiction Highlights in Off Season

one

One week market

Refrigerant: weak production and sales at the end of the year, stable price consolidation

This week, the factory continued to be reluctant to sell at high prices, resulting in weak market transactions and stable operation of mainstream refrigerant prices. Weekly market characteristics: At the end of the year, the overall market was in a low season of production and sales. Affected by weak demand, upstream basic raw material product prices fluctuated and declined. Among them, the prices of liquid chlorine and methanol both fell narrowly; The limited availability of calcium carbide has led to a surge in prices due to tight supply of goods; The prices of other raw materials are mainly weak and consolidating, and overall, the pressure on refrigerant costs has weakened. From the perspective of refrigerant production and sales scale, on the one hand, a new quota year is approaching, and mainstream refrigerant factories are suspending orders and reluctant to sell spare inventory; On the other hand, at the end of the year, there were relatively few export and domestic trade orders, and actual transactions were limited. Overall, the supply and demand of the refrigerant market are weak, and it is expected that prices will remain stable and operate steadily within the year.

Fluorinated polymers: prominent supply-demand contradiction, mainly price fluctuations during the off-season

This week, the increasing supply and demand pressure in the fluoropolymer market has led to accelerated price fluctuations, causing product prices to collectively approach cost prices. The cost pressure on factories that purchase raw materials and have incomplete industrial chains has sharply increased. During the week, TFE series products such as PTFE and FEP experienced a significant price correction, while other products continued to consolidate at the bottom due to approaching the cost line. It is not difficult to see from the price fluctuations that there is a significant differentiation in the supply and demand relationship for the same product with different uses. Overall, factories with cost advantages on the supply side, a customer base on the demand side, and R&D capabilities on the product side have better capacity utilization; The downstream application industry has been affected by the slowdown in global economic growth, resulting in a slowdown in growth rate. This type of supply-demand contradiction has a certain degree of sustainability, and the short-term fluoropolymer market will continue to consolidate at the bottom.

two

Weekly News

Refrigerant and fluorine raw materials

Sanmei Corporation: The domestic usage quota for R143a in 2024 will significantly shrink

On December 15th, Sanmei Corporation released the investor relationship record form. In the table, Sanmei Corporation stated that it is expected that the domestic usage quota of R143a will significantly shrink next year, and export quotas cannot be converted into domestic usage quotas.

Regarding the issue of stock hoarding in the market in the fourth quarter of this year, Sanmei Corporation stated that in the fourth quarter of last year, due to special reasons such as quota competition and low product prices, manufacturers, circulation, and terminal links all had excess stock hoarding beyond normal; This year, the quota baseline period has ended, and manufacturers will prepare safety stock to ensure normal production and shipment. The circulation and terminal links are also more of a normal stocking and replenishment behavior.

Jinshi Resources: On average, each new energy vehicle uses approximately 45 kilograms of fluorite powder

On December 18th, Jinshi Resources released an investor relations activity record and stated that the application of fluorine chemicals and refrigerants is constantly expanding, and fluorite has become an indispensable upstream raw material for the fluorine chemical industry known as the "gold industry". The demand for fluorite in fluorine chemicals has become the largest downstream demand area for fluorite.

Preliminary calculations show that a new energy vehicle will use approximately 45 kilograms of fluorite powder. It is expected that by around 2030, the demand for fluorite in the new energy sector may exceed traditional demand.

However, there is still a lot of room for the traditional refrigerant market, especially in Southeast Asian regions such as India and Vietnam where air conditioning will gradually become popular with economic development, including factors such as global warming. We believe that traditional demand for refrigerants is still a necessity and there is a lot of room for improvement.

Starting from 2024, China's import of low arsenic fluorite is temporarily exempt from tariffs

Approved by the State Council, the State Council Tariff Commission announced on the 21st that it will adjust the import and export tariffs of some goods in 2024. According to the announcement, starting from January 1, 2024, China will implement temporary import tax rates lower than the most favored nation tax rate for 1010 goods. Among them, in order to accelerate the innovative development of advanced manufacturing industry and reduce import tariffs on domestic scarce resources, key equipment, and components such as lithium chloride, low arsenic fluorite, and fuel cell gas diffusion layers.

As shown in the figure, starting from 2024, China will implement a provisional tariff rate of 0 on the import of low arsenic fluorite, which means no taxation. Provisional tariff rate is a tariff rate applied to some imported and exported goods within a certain period of time, usually lower than the most favored nation tariff rate and given priority. It is a common way of adjusting tariffs independently.

Fluorinated polymers

Fujian Sansteel plans to build fluorine new material projects such as PTFE and FEP

On November 17th, the website of Sansteel Group announced the first phase of the Fujian Sansteel Fuduobang Fluorine New Materials Industry Construction Project. According to the public announcement, the project is located in Jinxing Industrial Park, Songxi Town, Qingliu County, Sanming City, Fujian Province. It will construct 20000 tons/year of tetrafluoroethylene (TFE), 3000 tons/year of FEP equipment, and 22000 tons/year of polytetrafluoroethylene (PTFE) production equipment. The supporting construction will use anhydrous hydrogen fluoride and difluoromethane (R22) as raw materials, and a comprehensive utilization of by-product hydrochloric acid to produce 130000 tons/year of polyaluminum chloride production equipment and ancillary facilities, At the same time, the original Yongfu Chemical 25000 tons/year anhydrous hydrogen fluoride production line will be renovated in another location.

This project is funded and constructed by Fujian Fuduobang Technology Co., Ltd., which was established in 2023 and is a wholly-owned subsidiary of Fujian Sansteel (Group) Co., Ltd.

Juhua Group: plans to invest a total of approximately 2.19 billion yuan in four projects

Juhua Shares announced in the evening that the company intends to:

Invest 911.2 million yuan to implement an additional 10000 tons/year of high-quality fusible fluorine resin and supporting projects;

Invest 58.524 million yuan to implement the 44kt/a high-end fluoropolymer project, Section A, 40kt/a TFE project;

Invest 327.14 million yuan to implement the first phase of the 500 ton/year perfluorosulfonic acid resin project with a capacity of 250 tons/year;

An investment of 36.68961 million yuan will be made to implement a 20kt/a high-performance barrier material project for polyvinylidene chloride.

This company stated that implementing the above project will enhance the high-end, specialized, and serialized development level of the fluorinated polymer industry, increase the proportion of the company's high-performance fluorinated and chlorinated chemical new materials business, promote the company's industrial high-end, promote the optimization and upgrading of product structure towards high-performance fluorinated and chlorinated chemical new materials, enhance the competitive position and competitiveness of the industry, and achieve high-quality development, which is of great significance.