China Fluoride Materials Monthly Report
VOL.3 Issue 4, April.28, 2014
Copyright © Guangzhou CCM Information Science & Technology Co.,Ltd
CCM Newsletter China Fluoride Materials Monthly Report 1404
Contents Headline 3 Editor's Note 4 Market Dynamics 5 Overcapacity in fluorine chemical industry calls for solutions 5 End-market visit: current situation of Guangdong's auto air-conditioning refrigerant market 7 AlF3 in China witnesses increases in export year by year 12 Company Dynamics 14 Do-Fluoride's three lithium batteries listed in Recommended Catalogue by MIIT 14 Kangfeng Chemicals invests in benzotrifluoride and its derivatives project 15 Longxing Chemical’s first-phase PVDF project to be put into trial operation in Q2 2014 16 Hengtai Chemical completes first-phase electronic grade hydrofluoric acid plant 16 Dexing Jiubang to expand fluoride salt plant 16 CIMC granted by Multilateral Fund for new eco-friendly refrigerant 17 Solvay Shanghai authorized to operate as Asia-Pacific Headquarters for Special Polymer Division 17 Shanghai 3F holds PTFE quality improvement conference 18 Political Factors 18 China to reduce use of HFCs 18 Fujian Province to promote application of natural refrigerants 19 Fuxin City makes headway in project introduction to fluorochemical industry 22 Fluoride salt chemical and rare earth industry to enter new development period in southern China 23 Amendment to Stockholm Convention on POPs comes into force in China 23 Technology 23 NIMTE develops antibacterial bilayer PVDF hollow fiber membrane 23 Market Data Analysis 24 Ex-works price of R22 in China witnesses sharp MoM increase of 13.77% in Mar. 2014 24 Ex-works price of AlF3 in China witnesses MoM decrease of 6.79% in Mar. 2014 26 Import & Export 28 Import and export analysis of fluoride chemicals in China in Feb. 2014 28 Price Update 36 Ex-works prices of most fluoride materials in China in Mar. 2014 36
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Headline Over the past few years, China witnessed a rapid development in the fluorine chemical industry, with increasing demand and growing production. However, the exaggerated increase in the production of basic products has been leading to serious overcapacity. As downstream demand weakens, China's fluorine chemical industry has experienced dramatic drops and is currently at a depressed state, with no incentive to rebound. The industry needs serious changes. At the end of Mar. 2014, CCM visited the auto accessories centers located in Yonghe Rd., Hengfu Rd. and Guangyuan Rd., Guangzhou City, in order to collect information about the current auto air-conditioning refrigerants situation in Guangdong Province. The visit gave CCM the opportunity to talk face to face with industry insiders. In 2014, some regions in China achieved their first exports of AlF3, indicating that the year-by-year increasing export of AlF3 in China will continue to rise this year. Recently, Do-Fluoride announced that its three self-developed lithium batteries were listed in the Recommended Catalogue by the MIIT, indicating that it has made headway in the R&D of lithium battery. For the sake of environmental protection, the US and the EU are taking actions to reduce the use of HFCs with high GWP, promoting the elimination of HFCs worldwide. Also, China reached a consensus with the EU to avoid or reduce the use of HFCs domestically. Environmental problems caused by fluorine-enriched refrigerants are capturing more and more attention in the world. China also issues relevant policies to eliminate fluorine-enriched refrigerants. Specially, Fujian Province takes the lead to replace them with natural refrigerants, and plans to establish two no-fluorine demonstration zones. It is targeted to promote the application of natural refrigerants throughout the province. Recently, NIMTE has successfully developed an antibacterial bilayer PVDF hollow fiber membrane, to promote the product optimization and upgrading in ultrafiltration membrane industry, and enhance the product competitiveness. In Mar. 2014, with the increasing production cost and market demand, the ex-works price of R22 in China began to rebound with a sharp MoM increase of 13.77%. Furthermore, it is predicted to rise continuously to a small extent in Q2 2014. In Mar. 2014, the ex-works price of AlF3 in China declined sharply by 6.79% month on month, due to the weakening demand and lowering costs. It is predicted that the price of AlF3 will stay low in Q2 2014.
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Editor's Note
In Mar. 2014, affected by the obviously changing demands, the average ex-works prices of main fluoride materials in China presented either increases or decreases. Of this, the ex-works prices of most refrigerants witnessed varied increases, since it is the conventionally peak period in Q2 2014 for refrigerant industry. For instance, the ex-works price of R22 and R134a reached USD1,727/t and USD3,277/t respectively in Mar. 2014, up by 13.77% and 3.31% over Feb. 2014. However, both the raw material industry and fluoride salt industry encountered gluts. For instance, the ex-works price of fluorite (CaF2>97%) and AlF3 declined by 6.52% and 6.79% respectively compared with that in Feb. 2014.
In this issue, CCM communicated with insiders in domestic fluorine chemical industry, based on the sluggish fluorine chemical market in recent years and the overcapacity in basic product production. Regarding the overcapacity relief of China's fluorine chemical industry, CCM had an in-depth interview with Mr. Huangfu Genli, a famous specialist in fluorine chemical industry. Commonly, there are three solutions for the overcapacity in China's fluorine chemical industry, including raising the entry requisites, controlling the total output and streamlining the industrial structure, and improving innovation capabilities.
In addition, CCM paid special attention to the auto air-conditioning refrigerant market, especially R134a in Guangdong Province. Specially, CCM visited the typical auto accessories centers located at Yongfu, Hengfu and Guangyuan roads in Guangzhou City. During the visit, in order to grasp the all-round information, CCM chose four topics covering brand, purchasing channel, price and quality to have in-depth talks with the insiders.
The RMB/USD exchange rate in this issue is USD1.00=RMB6.1503 on 1 Apr., 2014, sourced from the People's Bank of China.
If you would like to cover any specific topics or investigate any covered subjects in more details, please contact us on +86-20- 3761 6606, or [email protected].
www.cnchemicals.com 4/38 Copyright Guangzhou CCM Information Science & Technology Co., Ltd. E-mail: [email protected] CCM Newsletter China Fluoride Materials Monthly Report 1404 Market Dynamics Overcapacity in fluorine chemical industry calls for solutions
Summary: Over the past few years, China witnessed a rapid development in the fluorine chemical industry, with increasing demand and growing production. However, the exaggerated increase in the production of basic products has been leading to serious overcapacity. As downstream demand weakens, China's fluorine chemical industry has experienced dramatic drops and is currently at a depressed state, with no incentive to rebound. The industry needs serious changes.
These are the main problems China's fluorine chemical industry is faced with at the moment:
- Expanding production is leading to serious overcapacity of mainstream products. According to China Petroleum and Chemical Industry Federation, the main products in domestic fluorine chemical industry have experienced double-digit growth since the implementation of the 11th Five-year Plan. China's outputs of products such as hydrogen fluoride, aluminum fluoride, polytetrafluoroethylene (PTFE) and hydrofluorocarbon (HFC) are the largest in the world, showing the massive expansion of the country's fluorine chemical industry. In 2012, China's total capacity of fluorine chemicals had already exceeded 5 million t/a, with an output of over 3.5 million tonnes (45%-50% of the worldwide total).
- The fluorine chemical industry isn't prominent in the country's economy. It is closely connected to and dependent on downstream industries, and manufacturers on average operate in a small scale, leading to price fluctuations. The limited application and high homogeneity of its products, as well as low requisites for entry in the market aggravate the industry's fluctuations, and even leading enterprises have very little control over prices.
- Weak R&D and innovation capability. Chinese production processes lag behind many other countries' in aspects such as energy consumption, by-product utilization and environmental safety, as well as technology for polymer modification and processing. This R&D deficiency is unacceptable in a technology-oriented field, and China will suffer from its low competitiveness and unsustainable development.
Furthermore, common fluorine chemicals make up a large proportion of the industry, while high added-value products, such as high- performance fluorine polymers and fine chemicals, are not produced in large scale due to a lack of know-how. This leads to an irrational product structure (excess of low-end products and shortage of high-end ones), and also to an unreasonable distribution of non-renewable fluorite resources. The decreasing availability of fluorite will, in the long term, aggravate the difficulty to control production costs and impact the industry's sustainable development.
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Table 1: Capacity of main fluorine chemical products, t/a, 2005, 2010 & 2012
Product 2005 2010 2012 AAGR
HF 650,000 1,450,000 2,000,000 17%
AlF3 350,000 1,030,000 1,400,000 22% R134a N/A 120,000 170,000 102% R32 30,000 60,000 120,000 23% R125 N/A 50,000 130,000 54% General PTFE 30,000 60,000 80,000 13% PVDF 1,000 7,000 30,000 65% Note: 1. The AAGR of R134a and R125 are calculated from 2008 to 2012. 2. AAGR stands for average annual growth rate 3. HF stands for hydrogen fluoride 4. AlF3 stands for aluminum fluoride 5. R134a stands for 1,1,1,2-tetrafluoroethane 6. R32 stands for difluoromethane 7. R125 stands for pentafluoroethane 8. PTFE stands for polytetrafluoroethylene 9. PVDF stands for polyvinylidene fluoride Source: China Petroleum and Chemical Industry Federation Table 2: Product structure of the fluorine chemical industry, 2012
Output value, billion USD Proportion Category China The EU/the US/Japan China The EU/the US/Japan Basic products 2.67 2.86 53.40% 19.80% Mainstream products 2.28 8.13 45.60% 56.30% High-end products 0.05 3.45 1% 23.90% Total 5 14.44 100% 100% Source: China Petroleum and Chemical Industry Federation
The overcapacity in China's fluorine chemical industry calls, of course, for solutions. CCM has conducted telephone surveys with industry insiders, as well as an in-depth interview with Mr. Huangfu Genli, highly experienced senior manager, specializing in R&D of fluorine chemical production technologies. He has obtained 54 patents, 43 of them invention patents and 11 utility model patents.
Mr. Huangfu Genli agreed that the overcapacity is very serious and added that it has begun to extend to downstream products, for example general PTFE (a fluorine polymer), and trifluoroacetic acid (a fine chemical).
Mr. Huangfu Genli comments that, in an attempt to deal with the overcapacity, enterprises just lower their output to maintain the operation and cut losses, hoping for a recovery in the market; but as he points out, even if the market does recover, they will only be able to collect relatively low profits, as most of them use homogeneous technology.
Regarding potential solutions, Mr. Huangfu Genli considers market regulation an effective method. Although he believes key aspects such as production volume, profitability and competitiveness to be regulated by the market itself, he views government policies as playing a guidance role. The Chinese government is currently deepening reforms aiming the self-regulation of markets.
In addition, enterprises must invest in R&D and innovation. Only when manufacturers are equipped with innovative technology and products can they gain high profits. This effort will also accelerate the elimination of outdated capacity. For instance, a plant co- producing dry aluminum fluoride and anhydrous hydrogen fluoride using innovative technology (sodium fluosilicate) with low
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These are the main solutions for the overcapacity in China's fluorine chemical industry:
Firstly, raise the entry requisites. In Sept. 2012, new product standards and industrial policies concerning the production scale, key raw materials, energy consumption and other aspects were forwarded to the Ministry of Industry and Information Technology of the People's Republic of China (MIIT). They ought to be published as soon as possible in order to raise the barriers and enhance supervision in the industry. It is also necessary to strengthen the management and supervision of dangerous chemicals by issuing production licenses.
Secondly, control the total output and streamline the industrial structure. The government should limit the total output. For instance, the MIIT released the Admission Conditions for Hydrogen Fluoride in 2011, which states that new enterprises must have a capacity of at least 50,000 t/a, while new equipment must have a capacity of at least 20,000 t/a (with the exception of hydrogen fluoride produced from comprehensive resources). In addition, industrial parks should be set up with the local availability of resources, economic development and energy savings in mind. It is of paramount importance to accelerate fluorine chemical industry's integration with related industries and to inject competitive enterprises and industrial parks with innovation and resources, in order to stimulate the establishment of large, internationally competitive enterprises.
Thirdly, improve innovation capabilities by establishing special plants for fluorine chemicals and new products, investing more into high technology and high-end materials R&D, implementing talent cultivation programs and strengthening the protection of intellectual property.
Finally, the industry should protect and rationally use non-renewable fluorite resources by enhancing the comprehensive utilization of by-products and waste and stipulating standards for energy consumption, waste emission, safety, among other aspects, aiming at the sustainable development of the industry. End-market visit: current situation of Guangdong's auto air-conditioning refrigerant market
Summary: At the end of Mar. 2014, CCM visited the auto accessories centers located in Yonghe Rd., Hengfu Rd. and Guangyuan Rd., Guangzhou City, in order to collect information about the current auto air-conditioning refrigerants situation in Guangdong Province. The visit gave CCM the opportunity to talk face to face with industry insiders.
Background information on the auto accessories market in Guangdong Province
Many years of developing and gathering expertise have put Guangdong's (and especially Guangzhou's) auto accessories market in a leading position in China. The total value of auto accessories traded in Guangzhou is the highest in the country. Yongfu Rd. is one of Guangzhou's most well-established centers for auto accessories since the 1980s, when the first distributors began setting up shop along the road, later spreading to Hengfu Rd. and Guangyuan Rd. Distributors in the three roads no longer deal in retail, and together make up the largest wholesale market in China, with over 4,000 enterprises selling 70%-80% of all auto accessories in China to different places. The auto accessories centers in Yongfu Rd., Hengfu Rd. and Guangyuan Rd. essentially lead the development of the Chinese auto accessories industry. Xu Jingxiong, vice president of the Guangzhou Auto Parts & Accessories Industry Association, agrees with the importance of Yongfu Rd.: "When Yongfu Rd. is mentioned, we all know that it refers not only to
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Background information on the auto air-conditioning refrigerant market in Guangdong Province
Auto air-conditioning refrigerants are a part of the auto accessories industry, and are rapidly developing in Guangdong. Guangzhou's Zengcheng District in particular has become a prominent producer of refrigerants. Auto air-conditioning refrigerants produced, repackaged and sold in Zengcheng exceed 30,000 tonnes, 70% of the nation's total.
However, early in 2011, the China Consumer Network published the 3·15 annual report on automobiles, revealing that the domestic market was flooded with counterfeit car air-conditioners, many of which produced by manufacturers in Zengcheng. Since then, Guangdong's Administration for Quality and Technology Supervision and other relevant departments in Zengcheng have been strengthening the supervision and management of the district's production and sales of auto air-conditioning refrigerants.
Current situation of the auto air-conditioning refrigerant market in Guangdong Province
In order to collect extensive information regarding Guangdong's auto air-conditioning refrigerant market, CCM visited several of Guangzhou's auto accessories centers at the end of Mar. 2014, usually the beginning of the peak season in the refrigerant market. The centers, which include Jinyongfu Auto Accessories Center, Fuyi Auto Accessories Center and Lihong Auto Accessories Center, are mainly located at Yongfu Rd., Hengfu Rd. and Guangyuan Rd. Additionally , CCM had face-to-face talks with insiders from 23 enterprises involved in auto air-conditioning refrigerants sales, about the current situation of Guangdong's market. The interviews focused on four main topics: brand, purchasing channels, price and quality.
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Table 3: Respondents to CCM's automotive air-conditioning refrigerant market research
No. Company
1 Guangzhou Chong Hing Automobile Air Conditioning Co., Ltd.
2 Guangzhou Tianhe Nanfeng Automotive Products Trading Firm
3 Guangzhou Hengli Auto Facilities Shop 4 Guangzhou Nanjue Automotive Products Co., Ltd.
5 Guangzhou Weixing Automobile Air Conditioning Fitting Co., Ltd.
6 Guangzhou Yefeng Automotive Parts Trading Firm 7 Guangyilong Automotive Products Trading Firm
8 Zhong Yu Series Automobile Air-Condition Accessory Dept.
9 Xin Quan Sheng Air Conditioning Accessories of Automobile Car
10 Guangzhou Zhongyuan Department of Automotive Air Conditioning Accessories
11 Guangzhou Jing Sheng Automotive Air Conditioning Parts
12 Guangzhou Guangsheng Automotive Air Conditioning Parts Co., Ltd.
13 Guangzhou Gu Cheng Auto Parts Co., Ltd. 14 South Automobile Air Conditioning Co., Ltd.
15 Zengli Automotive Air-conditioning Franchise Store
16 Guangzhou Deyisheng Automotive Air-conditioner Co., Ltd.
17 Guangzhou Rilian Automotive Parts Trading Co., Ltd.
18 Guangzhou Meile Automobile Co., Ltd.
19 Guangzhou Kaichuang Automotive Products Co., Ltd.
20 Guangzhou Chuang Hua Hua Lin Automobile Accessory Co., Ltd.
21 Guangzhou Fengye Automotive Air Condition Accessories Company
22 Quan Sheng Automobile Air Condition Accessories Department
23 Guangdong Huan Qiu Car Accessory Co., Ltd. Source: CCM
Brand
In addition to listing the products sold by the interviewees, CCM also presented them with a previously prepared set of top brands in order to gauge brand awareness among sellers. CCM's list included JINCOOL, by Sinochem Modern Environmental Protection Chemicals (Xi'an) Co., Ltd. (a subsidiary of Sinochem Lantian Co., Ltd.), Juhua, by Zhejiang Quzhou Lianzhou Refrigerants Co., Ltd. (a subsidiary of Zhejiang Juhua Co., Ltd.), Sanmei, by Zhejiang Sanmei Chemical Industry Co., Ltd., Ice Loong by Zhejiang
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Yonghe Refrigerant Co., Ltd., CHIEF, by Shenzhen Chief Car Care Products Development Co., Ltd. and DCTR, by Shenzhen Pingchi Industry Co., Ltd. Foreign brands were also included, such as DuPont, Genetron (by Honeywell) and KLEA (by Switzerland- based INEOS).
The survey found that, even though Guangzhou's auto air-conditioning refrigerant market carries various brands, almost all agents had small brands from China, and especially from Zengcheng, as their leading brand, instead of one of the top Chinese or foreign brands. Interviewees stated that, faced with different options, the Guangdong market as a whole would give priority to Zengcheng products. During the visit, only one relatively famous domestic brand — Big Banyan, by Zengcheng Dushi Auto Air Conditioner Manufacturing Co., Ltd. was found to have many representatives with large quantities of available goods. On-site prices for 200g, 250g and 300g refrigerants were quoted at USD1.46/unit, USD1.79/unit and USD2.60/unit, respectively. Du Haowen, sales manager at Guangzhou Guangsheng Automotive Air Conditioning Parts Co., Ltd., a Big Banyan representative, told CCM that "brand isn't the most important factor in the market, but quality. Qualified 1,1,1,2-tetrafluoroethane [R134a, one of a few possible raw materials for the production of refrigerants] determines the quality of the product. Big Banyan uses the same R134a as JINCOOL, and presents no differences in performance from top foreign brand DuPont. As a local brand with high quality and relatively low price, Big Banyan enjoys a good reputation and strong sales in Guangdong."
Table 4: Brand awareness survey with 23 respondents
Brand Are acquainted with the brand Sell the brand JINCOOL 23 7 CHIEF 23 2 DCTR 23 1 DuPont 23 4 KLEA 23 2 Juhua 4 0 Genetron 1 0 Sanmei 0 0 Ice Loong 0 0 Source: CCM
Purchasing channels
Most of the enterprises visited are either the manufacturers' representatives, and have a regular supply, or purchasers that have an irregular supply from manufacturers. They seldom purchase from other distributors, except in the case of special orders they are unable to fill otherwise (for example, if a customer specifies a brand the distributor does not carry, and they cannot find official representatives for such brand, they would then turn to common distributors). An insider at Guangzhou Gu Cheng Auto Parts Co., Ltd. explains: "In the past, the auto air-conditioning refrigerant market in Guangdong has been full of counterfeits, especially of top brands. Because of this, we didn't dare to buy goods from other distributors. Currently, we prefer to purchase from the producers, or establish direct cooperation with them, for example by being an official representative. [This way we] avoid counterfeits, since we share a common interest".
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Figure 1: Purchasing channel survey with 23 respondents
Source: CCM
Price
Given the same specifications, CCM found widely different average quotations for common domestic brands and top domestic brands, and even bigger differences when comparing Chinese and foreign brands. For instance, the 300g packages of common domestic brands had an average quotation of USD2.56/unit, 18.36% less than top domestic brand JINCOOL (USD3.03/unit) and 103.13% less than top foreign brand DuPont (USD5.20/unit). Most interviewees agreed that this is the case not only in Guangzhou but everywhere in Guangdong.
One of the enterprises interviewed, Guangzhou Jing Sheng Automotive Air Conditioning Parts Dept., exemplifies the situation of most sellers: due to such big differences in price, they are reluctant to have top brands as leading products, and rather keep them on as secondary products, to meet a demand from part of their customers. For the bulk of their customers, they will recommend common domestic brands. Another advantage to this is that if customers require large amounts of product, distributors can put them in contact with manufacturers and even take them to visit the factories to encourage their trust, since production facilities are located nearby. They will also arrange for products to be sent directly to the customers. Even though this may cut into their profits, it is beneficial to the establishment of long-term cooperation.
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Table 5: Quotation survey with 23 respondents
Domestic ordinary brand
Specification Average quotation, USD/unit 300g 2.56 250g 1.98 200g 1.46
Domestic famous brand
Brand Average quotation, USD/unit JINCOOL 3.03 (300g) DCTR 2.60 (250g) CHIEF 2.56 (250g)
International brand
Brand Average quotation, USD/unit DuPont 5.20 (300g) DENSO 4.06 (300g) KLEA 3.98 (250g) Source: CCM
Quality
Interviewees believe that there are currently few counterfeits in Guangdong's auto air-conditioning refrigerant market, particularly in stores specializing in sales. Detailed manufacturer information on the packaging makes it very easy to track the source, so most distributors do not dare to sell fake products. However, some distributors believe that "counterfeits cannot be entirely eradicated, since they are produced to meet a demand". Incidentally, during its visit CCM found three auto accessories enterprises not specializing in the sales of auto air-conditioning refrigerants selling counterfeits filled with dichlorodifluoromethane (R12), alongside proper R134a refrigerants. The falsifications, sold in 200g and 250g packages and priced at USD0.89/unit, are produced by the distributors themselves, who can provide them based on customers' requirements.
Asked how to spot the difference between quality auto air-conditioning refrigerants and falsifications, an insider cited price as the main giveaway: "for instance, the wholesale quotation for falsifications filled with R12 is USD0.81–0.98/unit, while quality products filled with R134a are priced at USD1.63–1.95/unit on average, a big difference. Therefore, if one encounters low-priced products marked as R134a, they are likely to be fake". AlF3 in China witnesses increases in export year by year
Summary: In 2014, some regions in China achieved their first exports of AlF3, indicating that the year-by-year increasing export of
AlF3 in China will continue to rise this year.
On 14 Apr., 2014, Chenzhou Entry-Exit Inspection and Quarantine Bureau announced that the aluminum fluoride (AlF 3) with an amount of 120 tonnes from Yizhang Hongyuan Chemical Co., Ltd. (Yizhang Hongyuan) was exported to Russia, recording the first export of AlF3 in Chenzhou City, Hunan Province. By the way, Yizhang Hongyuan, a subsidiary of Sinochem Lantian Co., Ltd. takes full advantage of abundant fluorite resources in Chenzhou City to produce downstream fluorochemical products. Currently, it owns a www.cnchemicals.com 12/38 Copyright Guangzhou CCM Information Science & Technology Co., Ltd. E-mail: [email protected] CCM Newsletter China Fluoride Materials Monthly Report 1404 full advantage of abundant fluorite resources in Chenzhou City to produce downstream fluorochemical products. Currently, it owns a capacity of 75,000 t/a for AlF3 production.
On 31 Mar., 2014, a batch of AlF3 inspected by Sanmenxia Entry-Exit Inspection and Quarantine Bureau (SEEIQB) was exported to
Germany, achieving the first export of AlF 3 in Sanmenxia City, Henan Province. It is disclosed that special staff from SEEIQB was sent to relevant export enterprises for instruction. The staff specified relevant laws and regulations on inspection and quarantine, relevant standards about AlF3 and requirements on inspection and transportation of dangerous chemical products. Also, they identified the inspection terms according to the export contracts.
On 3 Mar., 2014, Ningxia Hui Autonomous Region also had its first export of AlF 3. According to Ningxia Entry-Exit Inspection and
Quarantine Bureau, the AlF3 with an amount of 600 tonnes produced by Ningxia King Chemical Co., Ltd. (Ningxia King) was exported to Russia. By the way, Ningxia King, a subsidiary of CNMC Ningxia Orient Group Co., Ltd. is equipped with key AlF 3 production technology. Currently, it owns a capacity of 110,000 t/a for AlF3 production.
In recent years, the export of AlF3 in China has witnessed continuous increases, becoming the largest AlF3 exporter in the world.
There are mainly two reasons for the export increases.
- Abundant fluorite resources in China. China with an exploitation quantity of 3 million tonnes, accounts for 60% of the total exploitation quantity of 5 million tonnes in the world. Besides, the annual output of AlF3 in China accounts for over 60% of the total in the world. Also, the annual output of aluminum in China accounts for 30% of the total worldwide.
- Sluggish AlF3 market in China. In Mar. 2014, the ex-works price of domestic AlF 3 was USD1,153/t, down by 27.35% compared with that of USD1,587/t in Jan. 2012. Therefore, many Chinese AlF3 enterprises has been devoting themselves to expand the overseas market in recent years, so as to ensure their profits.
In 2014, supported by the domestic AlF3 enterprises and relevant governmental departments, more and more regions join into the export of AlF3, indicating that China's export of AlF3 will continue to increase this year. In addition, CCM conducted research and found that Yizhang Hongyuan has been striving to expand the overseas market. At the end of 2013, Yizhang Hongyuan made some progress by signing supply contracts with enterprises in other countries. Early in 2014, it also signed a contract with Australia- based Rio Tinto. Therefore, Yizhang Hongyuan plans to export AlF 3 with a total amount of 25,000 tonnes to countries like Russia, Australia and Cameroon.
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Figure 2: Ex-works price of AlF3 in China, Jan. 2012–Mar. 2014
Source: CCM Figure 3: Export trend of AlF3 in China, 2011–2013
Source: China Customs & CCM Company Dynamics Do-Fluoride's three lithium batteries listed in Recommended Catalogue by MIIT
Summary: Recently, Do-Fluoride announced that its three self-developed lithium batteries were listed in the Recommended Catalogue by the MIIT, indicating that it has made headway in the R&D of lithium battery.
On 1 Mar., 2014, Do-Fluoride Chemicals Co., Ltd. (Do-Fluoride) announced that its three batteries, including lithium power battery, lithium-manganese power battery (PMP1665132-10AH, PMP12135185-20AH) and lithium iron phosphate power battery (PFP54240180-100AH) were listed in the Catalogue for Recommended High-tech and Products (Recommended Catalogue) by the Ministry of Industry and Information Technology of the People's Republic of China (MIIT).
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The Recommended Catalogue is targeted at the information expansion of military and civil technology. Its publication will help promote the application of advanced military technology in civil fields to enhance the development of national economy, and it will lead private enterprises to engage into the production of military products to quicken the extension of equipment development and supply chain.
Regarding Do-Fluoride, its being listed in the Recommended Catalogue indicates that the enterprise has made headway in the R&D of lithium battery, and will further develop along with the support from governmental policies.
In addition, the successful development and industrialization of these three lithium batteries will contribute to Do-Fluoride's operation and development, since lithium battery is of great importance to the optimization of current product structure, creation of new economic growth point and enhancement of key competitiveness.
On 27 Feb., 2014, Do-Fluoride disclosed that though its revenue increased by 7.97% in 2013 over 2012, its operating profit, total profit and net profit decreased by 36.95%, 64.89% and 61.10% respectively, compared with that in 2012. It is attributed to the weak demand of fluoride salt from downstream industries, which led to the unbalance between low price and high cost and furthered the decline in gross profit.
Therefore, Do-Fluoride devotes itself to the development of new energy industry to improve the performance, and these three lithium batteries are predicted to provide support for Do-Fluoride's development in new energy industry. They will be widely applied in electric vehicle, electric bicycle and energy storage. Also, it features with many advantages like high rate discharge performance and high safety. Kangfeng Chemicals invests in benzotrifluoride and its derivatives project
In Mar. 2014, Zhejiang Kangfeng Chemicals Co., Ltd. (Kangfeng Chemicals) announced that the company intended to invest USD130.07 million (RMB800 million) in a 2,000 t/a project concerning benzotrifluoride and its derivatives. The project is planned to be launched in H2 2014, and will be put into operation at the end of 2015. Benzotrifluoride and its derivatives are important organic chemical raw materials. Enriched by fluorine, they present many special properties with wide applications in the fields like pharmaceuticals and pesticides. Compared with conventional organic intermediates, the medicines or pesticides synthesized by benzotrifluoride and its derivatives present stronger metabolic capability.
Incidentally, Kangfeng Chemicals located in Dongyang City, Zhejiang Province, boasts its capability in the R&D and production of fluorine chemicals. The enterprise owns the capacities of benzotrifluoride (3,000 t/a), 4-chlorobenzotrifluoride (8,000 t/a), 4-chloro- 3,5-dinitrobenzotrifluoride (5,000 t/a) and inorganic fluorides (1,000 t/a). Its products with excellent quality are sold widely abroad.
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On 25 Mar., 2014, Longxing Chemical Stock Co., Ltd. (Longxing Chemical) released its 2013 financial report. It is disclosed in the report that Longxing Chemical will put its 2,000 t/a polyvinylidene fluoride (PVDF, first phase) project into trial operation in the second quarter of 2014.
On 25 Mar., 2013, the project was passed in the 1st meeting of the second board of directors. Longxing Chemical divides the project into two phases, with a total capacity of 4,000 t/a.
Incidentally, founded in Jan. 1994, Longxing Chemical is the second largest production base in China involved in the R&D, production and sales of carbon black. The PVDF project is targeted to expand its business to fluorocarbon coatings in combination with its advantage in carbon black. Hengtai Chemical completes first-phase electronic grade hydrofluoric acid plant
On 10 Mar., 2014, the Environmental Protection Bureau of Xuancheng City, Anhui Province announced that Xuancheng Hengtai Chemical Technology Co., Ltd. (Hengtai Chemical) completed its first-phase project of the 12,000 t/a plant for electronic grade hydrofluoric acid, and passed the inspections and detections concerning the environmental protection. Currently, it is put into operation.
By the way, Hengtai Chemical is a subsidiary of Yingpeng Chemicals Co., Ltd. (Yingpeng Chemicals). Based on industrial grade anhydrous hydrofluoric acid, Hengtai Chemical achieves the production of electronic grade hydrofluoric acid through processes like oxidation, distillation and isolation. It is worth noting that the plant is located in Xuancheng Hengyuan Chemical Technology Co., Ltd. (another subsidiary of Yingpeng Chemicals engaged in the production of industrial-grade anhydrous hydrofluoric acid). Therefore, Hengtai Chemical can use pipelines for the transportation of raw material from Hengyuan Chemical, which will largely reduce the transportation cost. Dexing Jiubang to expand fluoride salt plant
On 24 Mar., 2014, Dexing Jiubang Chemical Co., Ltd. (Dexing Jiubang) was announced to expand its fluoride salt plant by 40,000 t/a (comprehensive capacity). Regarding the expansion,Dexing Jiubang will launch two production lines (20,000 t/a each) of fluoride salt and other supporting equipment. The main products will include potassium fluotitanate, potassium fluoborate, sodium fluoride, potassium bifluoride and potassium fluozirconate.
By the way, Dexing Jiubang is a chemical enterprise involved in the production and sales of fluoride salt products. It is located in Xiangtun Industrial Park, Dexing City, Jiangxi Province, with a covering area of 5.33 ha (80 mu).
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Table 6: Dexing Jiubang's fluoride salt plant, 2014
Main product Capacity, t/a Potassium fluotitanate 15,000 Potassium fluoborate 10,000 Sodium fluoride 5,000 Potassium bifluoride 4,000 Potassium fluozirconate 2,000 Potassium fluosilicate 2,000 Barium fluoride 2,000 By-product Capacity, t/a Sodium fluorosilicate 1,200 Source: Dexing Jiubang Chemical Co., Ltd. CIMC granted by Multilateral Fund for new eco-friendly refrigerant
On 28 Mar., 2014, China International Marine Containers (Group) Ltd. (CIMC) announced in its 2013 financial report that it signed a contract with the Ministry of Environmental Protection of the People' s Republic of China in 2013, to quicken the elimination of hydrochloroflurocarbon (HCFC)-enriched refrigerants. Also, CIMC has been replacing conventional HCFCs like 1,1-dichloro-1- fluoroethane (R141b) and chlorodifluoroethane (R142b) with cyclopentane, a new eco-friendly refrigerant in the refrigerator production. Therefore, it has been granted about USD18.5 million by the Multilateral Fund for the Implementation of the Montreal Protocol (Multilateral Fund).
Incidentally, CIMC is able to produce 13 series of refrigerators, covering about 200 varieties. Moreover, it has established the only complete production line of special refrigerator in the world. Solvay Shanghai authorized to operate as Asia-Pacific Headquarters for Special Polymer Division
In Mar. 2014, a wholly-owned subsidiary of Solvay S.A., namely Solvay (Shanghai) Co., Ltd. (Solvay Shanghai) announced that it was authorized by the headquarters in Belgium to operate as Asia-Pacific Headquarters for Special Polymer Division. Fluoropolymer is a main business in the Special Polymer Division. Solvay Shanghai will play a managing role in the business in Asia & Pacific. Also, it will be responsible for product distribution, technical support, fund settlement, import & export and other supplementary services in China and Southeast Asia. Previously, Solvay Shanghai located in China (Shanghai) Pilot Free Trade Zone (CSPFTZ), was only involved in trading business. With the emerging reform measures in CSPFTZ, Solvay Shanghai will play more functional roles like maintenance, supply chain management, education & training and financing.
Incidentally, according to statistics from China Customs, the import & export value in CSPFTZ totaled USD9.68 billion (RMB59.56 billion) in Jan. 2014, with a MoM growth rate of 2.4%. Of this, the export value reached USD2.45 billion (RMB15.05 billion) with a MoM growth rate of 5.2%, while the import value amounted to USD7.24 billion (RMB44.51 billion), with a MoM growth rate of 1.5%. Meanwhile, compared with Oct. 2013 (establishing time of CSPFTZ), the import & export value, export value and import value witnessed an increase of 18%, 17.9% and 18.1% respectively. It is predicted that CSPFTZ will have a bright prospect.
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On 14 Mar., 2014, Shanghai 3F New Material Co., Ltd. (Shanghai 3F) announced that it held a conference concerning polytetrafluoroethylene (PTFE) quality improvement. At the conference, Shanghai 3F raised improvement measures for PTFE suspension products.
-Enhancement in fields like polymerization and drying process, and product detection indexes, proposed by Liu Yuepeng, vice chief engineer.
-Clear schedule for improvement, specific staff to follow quality detection and standardized equipment and detection methods, raised by Sun Zhehao, vice general manager.
-Cooperation with outer technical forces to improve production process and ensure customer-oriented product quality, put forward by Zhu Zhangjian, vice general manager. Political Factors China to reduce use of HFCs
Summary: For the sake of environmental protection, the US and the EU are taking actions to reduce the use of HFCs with high GWP, promoting the elimination of HFCs worldwide. Also, China reached a consensus with the EU to avoid or reduce the use of HFCs domestically.
In late Mar. 2014, the EU finally released the latest fluorinated gases (F-gas) regulations, indicating that it has scheduled the elimination of hydrofluorocarbons (HFCs). Meanwhile, on 3 Apr., 2014, California Air Resources Board (CARB) published a proposal for the taxation and charges on the sales and imports of HFCs. In addition, CARB announced to cooperate with the United States Environmental Protection Agency (USEPA) to jointly establish a national standard similar to the F-gas regulations in the EU.
On 31 Mar.-1 Apr., 2014, President Xi Jingping took a visit to the EU's headquarters in Brussels, Belgium. The two parties released a Joint Statement on Deepening the EU-China Comprehensive Strategic Partnership for Mutual Benefit, involving the cooperation to reduce the use of HFCs.
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Table 7: Political factors about elimination of HFCs in EU, US and China, 2014
Region Political factor Remark
The Released the latest F-gas regulations Effective from 2015. EU Start large reduction of HFCs in 2016.
Under announcement for advice collection, with an end on 28 Apr., 2014. The Published the proposal for the taxation and charges on the An Effective supplement to the current regulations on the substitutions for high GWP US sales and imports of HFCs products, since it takes the lead to include the relevant limitations on pre-filling equipment.
China Released a Joint Statement on Deepening the EU-China Cooperate with the EU to avoid or reduce the use of HFCs domestically, and further the Comprehensive Strategic Partnership for Mutual Benefit reduction of HFCs in the world.
Note: HFCs refer to hydrofluorocarbons; F-gas refers to fluorinated gases; GWP refers to global warming potential. Source: CCM
In line with the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol), China is quickening the pace to eliminate the production and consumption of hydrochlorofluorocarbons (HCFCs). Now it plans to eliminate HFCs. However, China will present a slow progress compared with the developed countries, due to the following two reasons.
For one thing, the relevant national standards concerning the mainstream substitutes for HFCs are in need of improvement. For instance, the national standards on propane (R290) and difluoromethane (R32), two main substitutes for HFCs, are undergoing formulations, according to the National Technical Committee on Refrigeration Air-Conditioning Equipment of Standardization Administration of China. Therefore, R290 and R32 cannot be widely applied in China currently.
For another, regarding the elimination of fluorine-enriched refrigerants, China still focuses on the elimination of HCFCs. Compared with HFCs characterized by high global warming potential (GWP), HCFCs not only feature with high GWP, but also with relatively high ozone depletion potential (ODP), causing more serious environmental problems. In addition, China has started the elimination of HCFCs since 2013, with an expected reduction of 10% in 2015. Thus, it is predicted that China will still concentrate on the elimination of HCFCs. What's more, Chinese enterprises are replacing HCFCs with HFCs currently. Such a case in the air- conditioning industry: the domestic air-conditioner manufacturers such as Haier Group, Midea Group and Gree Electric Appliances, Inc of Zhuhai launch their new eco-friendly products using HFCs refrigerants like R140a (a 1:1 mixture of pentafluoroethane - R125 and R32). Fujian Province to promote application of natural refrigerants
Summary: Environmental problems caused by fluorine-enriched refrigerants are capturing more and more attention in the world. China also issues relevant policies to eliminate fluorine-enriched refrigerants. Specially, Fujian Province takes the lead to replace them with natural refrigerants, and plans to establish two no-fluorine demonstration zones. It is targeted to promote the application of natural refrigerants throughout the province.
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On 31 Mar., 2014, Jiangsu Freezenow Environmental Material Co., Ltd. (Jiangsu Freezenow) announced that its new-type natural refrigerant promotion project with a total investment of USD81.30 million (RMB500 million), was successfully promoted in over 50 institutions like the government building of Nanping City, Fujian Province and Ming Chi University of Technology. It is expected to be promoted throughout the province step by step.
Early on 26 Mar., 2014, the Ministry of Environmental Protection (MEP) held an initial & training meeting in Beijing, for the second- phase project concerning the construction of local capability to eliminate ozone depleting substances (ODS). The Department of Pollution Prevention and Control of MEP, the Foreign Economic Cooperation Office of MEP and relevant departments from 30 provinces, autonomous regions and municipalities and 5 cities specially designated in China (Dalian, Qingdao, Ningbo, Xiamen and Shenzhen cities) attended the meeting. In the meeting, the MEP stressed to enhance the construction of long-term mechanism for fulfillment management, in order to lay a solid foundation for the ODS elimination. Therefore, Jiangsu Freezenow's new-type natural refrigerant promotion project is in line with the governmental policy to enhance local capability to eliminate ODS and will be provided with full support from the government.
CCM conducted research and found that Jiangsu Freezenow would implement mainly four measures to achieve the substitution for fluorine-enriched refrigerants in Fujian Province.
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Table 8: Main measures implemented by Jiangsu Freezenow in natural refrigerant promotion project, 2014
No. Measure Remark
With Fuzhou University to set up a no-fluorine research institute involved in the innovation and application of Freezenow’s natural refrigerants, 1 Cooperation and a special group engaged in the research to reduce the costs dealing with the recycling and utilization of fluorine-enriched refrigerant in R&D residue
Cooperation 2 in With Formosa Plastic Group to establish two no-fluorine demonstration zones in Nanping City and Pingtan County promotion
Cooperation With State Grid Longyan Electric Power Supply Company to reconstruct the air-conditioning system using fluorine-enriched refrigerants to 3 in energy save energy in the electric power building; with State Grid Energy Saving Service Co., Ltd. to promote large substitution projects in energy saving management contracting (EMC) pattern.
Cooperation To promote substitution application for fluorine-enriched refrigerants in room air-conditioning system in China Telecom, China Unicom and 4 in China Mobile in Fujian Province, and in automotive air-conditioning system in transportation operators like Xiamen Jinlong Automobile Group application Limited and Southeast Motor.
Source: Jiangsu Freezenow Environmental Material Co., Ltd.
By the way, the natural refrigerants used in the project, hydrocarbon refrigerants (a mixture of propane - R290 and isobutene - R600a) with excellent eco-friendly properties (ozone depletion potential - ODP = 0, global warming potential - GWP< 3) are all developed and produced by Jiangsu Freezenow. Currently, Jiangsu Freezenow has developed two types of natural refrigerants, ER-445A, an alternative to 1,1,1,2-tetrafluoroethane (R134a) used in automotive air-conditioning system, and ER-445B, an alternative to difluorochloromethane (R22) used in room air-conditioning system. ER-445A and ER-445B present the following advantages.
-High efficiency and energy saving. The efficiency can be improved by 5%-8%; the power saving rate can reach 15%-35%.
-Low filling volume to reduce costs. Each reduces the filling volume in air-conditioning system by 62% compared with R134a and R22.
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Table 9: Major performance comparison between ER-445A and R134a, ER-445B and R22
Item ER-445A R134a ER-445B R22
Critical pressure, MPa 4.19 4.06 4.26 4.99
Critical temperature, ℃ 112.9 101.1 98.81 96.15
Critical specific volume, m3⁄kg 0.0046 0.002 0.0046 0.0019
Latent heat of vaporization at temperature of 0℃, kJ⁄kg 370.8 198.6 374.88 205.5
Ozone depletion potential 0 0 0 0.045
Global warming potential ﹤3 1300 ﹤3 1700
Safety degree A3 A1 A3 A1 Source: Jiangsu Freezenow Environmental Material Co., Ltd. Fuxin City makes headway in project introduction to fluorochemical industry
On 8-10 Apr., 2014, Yang Zhonglin, mayor of Fuxin City, Liaoning Province, with a municipal trade delegation took a visit to Taiwan for project introduction. During the visit, Mayor Yang visited some business associations and relevant enterprises in Taiwan. With emphasis on fine chemicals, services and leather processing, the delegation attracted 11 project investments, including fluorochemical projects, such as the 100,000 t/a fluorine-enriched lubricating oil project from Hongyu Group, and the fluorite powder purification project and fluorite pellet production project from Yingpeng Chemicals Co., Ltd.
In addition, on 10-12 Apr., 2014, Mayor Yang also took a visit to Hong Kong with a delegation, to promote projects covering fluorine-enriched refrigerants and fluorine-enriched materials, which indicates that Fuxin City has made headway in the project introduction to fluorochemical industry.
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On 18 Mar., 2014, the National Development and Reform Commission announced that the State Council has approved the revitalization and development in Jiangxi, Fujian and Guangdong provinces (Original Central Soviet Area in 1927-1937). The Revitalization and Development Plan for Jiangxi, Fujian and Guangdong Provinces (the Plan) has been officially approved for implementation.
The Plan stresses the importance to facilitate the industry shift from coastal area and promote the optimization and upgrading of industrial structure. Also, major industries and top projects are planned to be distributed in the original Central Soviet Area, covering southern Jiangxi, western Fujian and part of Guangdong (three provinces are located in southern China). Meanwhile, the Chinese government will provide full policy support for the long-term development in this area.
Specially, fluoride salt chemical and rare earth industry will become the dominant industry in the area. Meanwhile, the Chinese government will offer support for the development of fluoride salt chemical and rare earth industry in varied aspects like policy implementation, project construction, fund input and institutional innovation. It is predicted that fluoride salt chemical and rare earth industry will enter its new development period in southern China. Amendment to Stockholm Convention on POPs comes into force in China
On 26 Mar., 2014, the Ministry of Environmental Protection of the People's Republic of China (MEP) held an initial meeting in Beijing, concerning the updates of the National Implementation Plan for the Stockholm Convention on Persistent Organic Pollutants (POPs). In the meeting, the MEP announced that the Amendment to the Stockholm Convention on POPs (the Amendment) officially came into force in China. Meanwhile, the updates on the National Implementation Plan for the Stockholm Convention on POPs would be initiated.
Zhai Qing, vice minister at the MEP stressed in the meeting that during the fulfillment of the treaty obligations, China should make efforts to prevent & treat POPs and reduce & control POPs, and further to promote the establishment and improvement of the production and risk management of highly dangerous chemicals.
By the way, the Amendment has another ten controlled substances included, two of which are fluorine-enriched substances namely perfluorooctane sulfonates (PFOS) and perfluoro-1-octanesulfonyl fluoride (POSF). PFOS, a fluorine-enriched surfactant, is widely applied in the production of textile and leather. Besides, it is used in painting additives, adhesives, pharmaceutical products and fire retardants. POSF, an important intermediate for the preparation of fluorine-enriched surfactants, is used to synthesize a series of fluorocarbon surfactants. Technology NIMTE develops antibacterial bilayer PVDF hollow fiber membrane
Summary: Recently, NIMTE has successfully developed an antibacterial bilayer PVDF hollow fiber membrane, to promote the product optimization and upgrading in ultrafiltration membrane industry, and enhance the product competitiveness.
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On 27 Mar., 2014, Ningbo Institute of Materials Technology & Engineering, Chinese Academy of Sciences (NIMTE) announced that its professional team for R&D in functional membrane from Polymer Division successfully developed a bilayer polyvinylidene fluoride (PVDF) hollow fiber membrane enriched by antibacterial sliver ions, by adopting double-layer coextrusion technology.
In order to decline the usage of Ag-carrying antibacterial agent and improve the antibacterial effect of PVDF hollow fiber membrane, the R&D team adopted the double-layer coextrusion technology to gather the Ag-carrying antibacterial agent in the outer layer, and further applied dry-jet wet spinning method to prepare highly antibacterial bilayer PVDF hollow fiber membrane.
The content of antibacterial agent in this bilayer membrane is only 54% of the single layer one. However, it presents the same and even better performance to resist bacteria and bacterial adhesion. Meanwhile, other performance indicators like water flux maintain excellent status.
This R&D achievement has obtained a national invention patent (Patent No. 201210042292.6), and fund support from the National Natural Science Foundation of China and the 863 Program (National High Technology Research and Development Program of China).
PVDF hollow fiber membrane is a kind of ultrafiltration membrane with a filtration accuracy of 0.1-0.001 micrometer. Without any chemical substances, it depends on the microholes densely distributed on the membrane surface to filter water from impurities like rust, particle and some organism. Having ensured the unchanged pH, it can help keep the trace minerals and trace dissolved oxygen needed by human being. Therefore, PVDF hollow fiber membrane is widely applied in fields llike household water purification system, waste water treatment and seawater desalination. Currently, it is put into mass production.
Microorganism is the main pollution source for PVDF hollow fiber membrane, except for organics and inorganics. Therefore, the production technology of PVDF hollow fiber membrane with high antibacterial performance will contribute to the optimization and upgrading of ultrafiltration membrane industry and further its long-term development.
It is proved by CCM in research that domestic leading enterprises involved in the application of PVDF hollow fiber membrane agreed to the significance of mentioned technology. For instance, an insider from Beijing Origin Water Technology Co., Ltd. (Beijing Origin Water) revealed that the current PVDF hollow fiber membrane produced and used by themselves features with a bacterial interception efficiency of nearly 100% (some bacteria may adhere to the membrane), but with no ability to resist or kill bacteria. If this new technology is adopted to equip PVDF hollow fiber membrane with high performance to resist and kill bacteria, the company will achieve product upgrading and strengthen product competitiveness. Beijing Origin Water will pay close attention to the technology. Market Data Analysis Ex-works price of R22 in China witnesses sharp MoM increase of 13.77% in Mar. 2014
Summary: In Mar. 2014, with the increasing production cost and market demand, the ex-works price of R22 in China began to rebound with a sharp MoM increase of 13.77%. Furthermore, it is predicted to rise continuously to a small extent in Q2 2014.
The ex-works price of difluorochloromethane (R22) in Jan. and Feb. 2014 saw some decreases with the weakening downstream
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There are mainly two reasons for such a sharp increase.
-Large increases in costs. As the main raw materials for R22, anhydrous hydrogen fluoride and chloroform have great impact on production costs. The price of anhydrous hydrogen fluoride maintained stable in Mar., while that of chloroform witnessed an obvious increase of 8.82% compared with Feb. In order to ensure the profit, R22 manufacturers began to raise the R22 ex-works prices.
-Strengthening downstream demand. Generally speaking, domestic refrigerant industry enters a peak period in the second quarter of a year. Meanwhile, according to China Customs, R22 have also seen large exports in Q2 in recent two years. Therefore, the downstream air conditioner producers, distributers and traders started their stocking in Mar. and Apr., driving up the demand for R22 and its price increase.
Figure 4: Ex-works price of difluorochloromethane in China, Jan. 2013–Mar. 2014
Source: CCM
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Figure 5: Ex-works price of chloroform in China, June 2013–Mar. 2014
Source: CCM
It is predicted that R22 price will continue to rise to a relatively small extent in Q2 2014.
Regarding the price increase, it is mainly attributed to the peak season in downstream refrigerant industry. Besides, since domestic R22 manufacturers have obtained the production quota, they make rational production plans in 2014 to avoid suspension which happened in 2013. Therefore, the domestic R22 manufacturers will not raise operating rate excessively, contributing to the balance between supply and demand.
Regarding small increasing extent, it is caused by weakening prices of raw materials. In detail, the sharp increase in chloroform price in Mar., is ascribed to two aspects. One is the price increase in its raw material, liquid chlorine, the other (dominant reason) is the limited supply caused by equipment maintenance in some leading enterprises like Zhejiang Juhua Co., Ltd., Shandong Jinling Group Co., Ltd. and Luxi Chemical Group Co., Ltd. However in Q2 2014, these enterprises may restart the production and fulfill the supply. Therefore, the price increase of chloroform will be weakened, leading to the small price increase in R22. Ex-works price of AlF3 in China witnesses MoM decrease of 6.79% in Mar. 2014
Summary: In Mar. 2014, the ex-works price of AlF 3 in China declined sharply by 6.79% month on month, due to the weakening demand and lowering costs. It is predicted that the price of AlF3 will stay low in Q2 2014.
Since Q4 2013, the ex-works price of aluminum fluoride (AlF3) in China had been increasing stably. However, it decreased by 6.79% month on month, from USD1,237/t in Feb. 2014 to USD1,153/t in Mar. 2014, due to the following reasons.
-Weakening demand from downstream industries. The governmental departments implement policies for production reduction and elimination of electrolytic aluminum. For instance, the National Development and Reform Commission and the Ministry of Industry and Information Technology released the Notice for the Implementation of Multistep Electricity Price Policy to Electrolytic Aluminum Enterprises, disclosing that the policy implemented from 1 Jan., 2014 would punish enterprises for their excess www.cnchemicals.com 26/38 Copyright Guangzhou CCM Information Science & Technology Co., Ltd. E-mail: [email protected] CCM Newsletter China Fluoride Materials Monthly Report 1404 electricity volume by raising the prices. Therefore, Chinese electrolytic aluminum enterprises raised their operating rates to accumulate inventories after the 2014 Spring Festival. Currently, they are undergoing the destocking period. Some electrolytic aluminum enterprises lowered their operating rates or even suspended the production in Mar., which weakened the demand for
AlF3 and further induced the AlF3 enterprises to lower prices and relieve stocking pressure.
-Lowering costs. In Mar. 2014, the main raw material of AlF 3, fluorite (CaF2>97%)'s ex-works price in China also saw a relatively sharp decrease of 6.52% month on month. Due to the climate warming, fluorite enterprises in North China began their production, ensuring the sufficient supply of fluorite (CaF2>97%) in China. However, the downstream demand still stayed weak, leading to a glut in the market. Therefore, the domestic fluorite enterprises also lowered prices to guarantee the out-going volumes.
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Figure 7: Ex-works price of fluorite (CaF2>97%) in China, Jan. 2013–Mar. 2014
Source: CCM
It is predicted that AlF3's price will maintain a low position in Q2 2014, mainly owing to two reasons.
For one thing, the Chinese government will continue to implement the policies concerning the production reduction and elimination of electrolytic aluminum. Moreover, aluminum's price still decreases. For example, the price of aluminum decreased by 10.67% in Mar. 2014 over Jan. 2014. Therefore, with sufficient inventories, electrolytic aluminum enterprises will maintain low operating rates or suspension, presenting the weak demand for AlF3.
For another, the fluorite enterprises like Jiangxi Yingpeng Chemicals Co., Ltd., Hunan Wang Hua Fluorite Mining Co., Ltd. and Guangxi Hong Teng Mining Co., Ltd. announced to put back on production in early Apr. 2014. Therefore, the oversupply of fluorite will be strengthened in Q2 2014, causing enterprises to lower prices and guarantee out-going volumes, to further ensure their profits. Import & Export Import and export analysis of fluoride chemicals in China in Feb. 2014
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Table 10: Export volume of major fluoride chemicals in China, Feb. 2014, tonne
Products Feb-14 Jan-14 Feb-13 Month-on-month change Year-on-year change
Fluorite (CaF2>97%) 13,185 22,752 15,679 -42.05% -15.91%
Fluorite (CaF2≤97%) 6,789 13,192 9,579 -48.54% -29.13%
HF 11,946 22,817 11,022 -47.64% 8.38%
AlF3 8,080 14,685 15,916 -44.98% -49.23%
R22 7,388 4,797 6,195 54.01% 19.26%
PTFE 1,428 1,717 952 -16.83% 50.00% Source: China Customs & CCM Table 11: Average export price (FOB) of major fluoride chemicals in China, Feb. 2014, USD/t
Products Feb-14 Jan-14 Feb-13 Month-on-month change Year-on-year change
Fluorite (CaF2>97%) 306 321 324 -4.67% -5.56%
Fluorite (CaF2≤97%) 239 291 255 -17.87% -6.27%
HF 1,188 1,214 1,365 -2.14% -12.97%
AlF3 1,204 1,169 1,237 2.99% -2.67%
R22 1,757 1,781 1,541 -1.35% 14.02%
PTFE 8,524 8,289 9,612 2.84% -11.32%
Note: FOB price = port price + handling and THC + exporter's profit - VAT rebate Source: China Customs & CCM
Fluorite
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Figure 8: Export trend of fluorite (CaF2>97%) in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 9: Major export destinations of China's fluorite (CaF2>97%) by volume, Feb. 2014
Source: China Customs & CCM
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Figure 10: Export trend of fluorite (CaF2≤97%) in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 11: Major export destinations of China's fluorite (CaF2≤97%) by volume, Feb. 2014
Source: China Customs & CCM
HF & AlF3
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Figure 12: Export trend of HF in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 13: Major export destinations of China's HF by volume, Feb. 2014
Source: China Customs & CCM
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Figure 14: Export trend of AlF3 in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 15: Major export destinations of China's AlF3 by volume, Feb. 2014
Source: China Customs & CCM
R22
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Figure 16: Export trend of R22 in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 17: Major export destinations of China's R22 by volume, Feb. 2014
Source: China Customs & CCM
PTFE
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Figure 18: Export trend of PTFE in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 19: Major export destinations of China's PTFE by volume, Feb. 2014
Source: China Customs & CCM
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Figure 20: Import trend of PTFE in China, Oct. 2013–Feb. 2014
Source: China Customs & CCM Figure 21: Major import origins of China's PTFE by volume, Feb. 2014
Source: China Customs & CCM Price Update Ex-works prices of most fluoride materials in China in Mar. 2014
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Table 12: Ex-works prices of most fluoride materials in China, Jan.–Mar. 2014
Ex-works price in Ex-works price in Ex-works price in Ex-works price in Product Feb. 2014 Mar. 2014 (USD) Ex-works price Jan. 2014 Feb. 2014 (USD) Ex-works price fluctuation fluctuation USD/t RMB/t USD/t RMB/t USD/t RMB/t USD/t RMB/t
Fluorite (97% Wet 276 1,689 258 1,587 -6.52% 277 1,689 276 1,689 -0.36% powder)
AHF 1,173 7,178 1,173 7,214 0.00% 1,173 7,154 1,173 7,178 0.00%
R134a 3,172 19,409 3,277 20,155 3.31% 3,182 19,407 3,172 19,409 -0.31%
R22 1,518 9,289 1,727 10,622 13.77% 1,524 9,295 1,518 9,289 -0.39%
R32 1,959 11,987 2,016 12,399 2.91% 1,936 11,808 1,959 11,987 1.19%
R125 3,599 22,022 3,599 22,135 0.00% 3,610 22,017 3,599 22,022 -0.30%
R410a 2,777 16,992 2,783 17,116 0.22% 2,783 16,974 2,777 16,992 -0.22%
AlF3 1,237 7,569 1,153 7,091 -6.79% 1,237 7,544 1,237 7,569 0.00%
Cryolite 983 6,015 971 5,972 -1.22% 951 5,800 983 6,015 3.36%
PTFE dispersion resin 8,450 51,706 8,476 52,130 0.31% 8,468 51,646 8,450 51,706 -0.21%
PTFE medium size 7,530 46,076 7,623 46,884 1.24% 7,516 45,840 7,530 46,076 0.19% particle resin Note: Ex-works price including VAT. CCM is expanding channels to acquire more statistics to ensure the accuracy. From this issue, ex-works prices from more manufacturers will be taken into account to obtain average prices. PTFE with two specifications will take the lead to upgrade. To present a clear price trend, ex-works prices of PTFE with two specifications will be upgraded from Jan. 2014. Source: CCM
www.cnchemicals.com 37/38 Copyright Guangzhou CCM Information Science & Technology Co., Ltd. E-mail: [email protected] Journalist: Stanley Wang Editor: Jenny Xing Chief Editor: Alan Lu Publisher: Guangzhou CCM Information Science & Technology Co.,Ltd
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