Fluorochemical Weekly Report: Mismatch of Domestic and Foreign Sales Quota for HFC Products, Strong Expectation of Collective Price Increase

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One week market

Refrigerant: Mismatch of domestic and foreign sales quotas for HFC products, expected strong price increase collectively

This week, under the influence of quota policies, the refrigerant market has been booming in the domestic trade market. The tight supply has driven an increase in orders in the foreign trade market, and mainstream refrigerant prices have collectively risen. Weekly market characteristics: The upstream raw material market has stable production and sales, product prices fluctuate narrowly, and refrigerant cost pressure is not significant. Mainstream refrigerant factories continue to have a mentality of being reluctant to sell and increasing prices, maintaining a reduction in load and production. The industry's operating rate is around 50%, and as the Spring Festival holiday approaches, leading enterprises are gradually undergoing maintenance. It is worth noting that the Ministry of Ecology and Environment released a detailed production quota for HFCs refrigerants in 2024 on January 11. Among them, the supply of R143a and R125 is expected to be tight, and the shortage of supply is expected to continue to drive up future prices; In addition, R32, R134a, and R227ea are also affected by limited supply this year, and factories have a strong mentality of being reluctant to sell and showing a strong upward trend. There are still expectations for further price increases in the future. In addition, driven by the actual issuance of quotas by enterprises and a decrease in the total amount in 2024, the overall supply scale of HFCs refrigerants has decreased by more than 200000 tons compared to the baseline value. Additionally, due to the concentrated overseas hoarding and early export orders during the baseline year, the actual export demand for each product is lower than the average export level during the baseline year. Tight domestic production quotas will have a positive impact on the future operation of refrigerants.

Fluorinated polymers: loose supply and demand game, sluggish price consolidation

This week, the supply of fluorinated polymers in the market continued to be loose, and the demand for domestic sales and exports remained flat during the off-season. There is an urgent need for improvement. The prices of upstream raw material products are weak, maintaining stability and consolidation, and the cost side support is weak. Constrained by multiple negative factors, mainstream product prices are under pressure to maintain stable operation. In terms of specific products, the price pressure and stability of raw materials such as AHF, calcium carbide, liquid chlorine, chloroform, etc. corresponding to monomer raw materials R22 and R142b determine that the cost support of TFE series and VDF series fluorinated polymers is stable and weakly consolidated. In a market environment with weak supply and demand relations, the significant differences in product quality and cost are still the main reasons for the large price difference of the same product. The willingness of factories to raise prices and the bearish mentality of downstream players are clearly in a game, Mainstream products in the future will face the dilemma of insufficient demand and sluggish consolidation.

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Weekly News

Fluorine raw materials&refrigerants

The equity cooperation between Juhua Group and Feiyuan Chemical has been completed

According to news from Juhua Group, on January 20th, Juhua Group and Feiyuan Chemical held a signing ceremony for equity cooperation in Zibo City, Shandong Province.

Juhua Group stated that this equity cooperation can, on the one hand, leverage the integration effect of Juhua Group and Feiyuan Chemical's industrial chain synergy, complementary resource advantages, and complementary market space layout, and enhance the competitiveness of both parties. On the other hand, it can enrich the industrial chain of Juhua Group, strengthen, optimize and expand the company's core industries, enhance the company's core industry competitiveness and market competitiveness, and has strategic significance in supporting the company's sustainable profitability and high-quality development.

According to the "2024 Hydrogen Fluoride Carbide Production Quota Announcement" issued by the Ministry of Ecology and Environment, Feiyuan Chemical has a total production quota of about 54000 tons of HFC-32, HFC-125, and HFC-134a, which will further consolidate Juhua's leading position in the 2024 HFC production quota.

On the evening of December 5, 2023, Juhua Group announced that Zhejiang Juhua Co., Ltd. plans to acquire a total of 51% equity of Zibo Feiyuan Chemical Co., Ltd. through cash acquisition and unilateral capital injection. On January 22, 2024, Juhua Shares announced that the equity transaction had completed the equity change registration with the registration authority.

Jinshi Resources: Subsidiary Zijing Mining is expected to resume work and production after the Spring Festival in 2024

On January 25th, Jinshi Resources announced that the project department of Zhejiang Tianzeng Construction Group Co., Ltd., a subsidiary of the company, Zhejiang Zijing Mining located in Yanqian Village, Xinchang Township, Changshan County, had a safety production accident on October 1st, 2023, resulting in the temporary suspension of production and operation of Zijing Mining's Yanqian fluorite mine.

Zijing Mining and the project department have conscientiously organized hazard investigation and rectification work as required, carried out safety warning education for all staff, and completed relevant rectification work on time. The company has received a report from Zijing Mining and has received the (Chang) Emergency Review [2024] K101 Rectification Review Opinion on January 24, 2024, confirming that the relevant rectification has been completed and agreeing to resume work and production.

Due to multiple factors such as some workers returning home during the shutdown period of Zijing Mining and the approaching Spring Festival, Zijing Mining plans to fully resume work and production after the 2024 Spring Festival.

Jiangxi Liwen R32 plant plans to be converted to R152a production

On January 24th, the environmental impact assessment of the annual production of 10000 tons of difluoroethane (R152a) in the technical renovation of the difluoromethane (R32) plant of Jiangxi Liwen Chemical Co., Ltd. was publicly announced for the first time.

It is understood that the project will demolish some equipment and facilities of the original difluoromethane unit, and add or utilize some equipment and facilities of the original unit to build a difluoroethane production unit. At the same time, two 200 cubic meter vinyl chloride raw material storage tanks and two 200 cubic meter R152a finished product storage tanks will be added to the tank area. All other public works and auxiliary facilities will be constructed using the original difluoromethane unit.

Fluorinated polymers

Wuhu plans to build a 500 ton/year fluorocarbon coating project

Recently, the Ecological Environment Bureau of Wuhu City issued a letter of approval on the Environmental Impact Assessment Report Form for the relocation and improvement project of Wuhu United Coatings Co., Ltd.'s annual production of 20000 tons of coatings and 20000 tons of environmentally friendly fire retardant materials.

It is understood that Wuhu United Coatings Co., Ltd. plans to invest 250 million yuan to build a relocation and upgrading project with an annual production capacity of 20000 tons of coatings and 20000 tons of environmentally friendly fire retardant materials. The construction period of the project is 24 months.

The project has an annual production of 20000 tons of coatings, including 500 tons of fluorocarbon coatings (mainly PTFE), 4000 tons of polyurethane coatings, 4000 tons of acrylic resin coatings, 4000 tons of epoxy resin coatings, 3000 tons of alkyd resin coatings, 500 tons of chlorinated rubber coatings, 500 tons of silicone coatings, 500 tons of amino coatings, 500 tons of phenolic coatings, 500 tons of cellulose coatings, and 2000 tons of curing agents and diluents; 20000 tons of environmentally friendly fireproof and flame-retardant materials, including 4000 tons of expandable fireproof coatings and 16000 tons of non expandable fireproof coatings.

Fujian plans to develop an annual production of 5000 tons of fluorine-containing nanomaterials project

On January 19th, the Ecological Environment Bureau of Sanming City announced the construction project of Jiwei Nano (Fujian) New Materials Technology Co., Ltd. with an annual production capacity of 5000 tons of fluorine-containing nano new materials and by-products.

According to the public announcement, the project is located in the Sanming Jikou Circular Economy Industrial Park, with a planned investment of 550 million yuan. The civil engineering of the project will be constructed in two phases, and the product will be constructed in three phases. The construction period is expected to be from 2024 to 2028.

After the project is completed, it will achieve an annual production capacity of 5000 tons of nano F/TiO2 (including A series, B series, and R series), nano F/Al2O3, nano F/Fe2O3, and nano F/CoO. In addition, it also includes by-products such as isopropanol solution, sodium chloride, 30% hydrochloric acid, and polyaluminum chloride produced by the production process.

Jiwei Nano stated that after years of development, nanomaterials have been proven to have special properties in fields such as light, electricity, magnetism, force, heat, and sound, and can be applied in various industries.

Fluorine containing nanomaterials are a very important class of nanomaterials in the nanomaterial system, with broad application prospects in industries such as air treatment, new energy, catalysts, and chemical engineering.