With the Weakened Downstream Demand, China PTFE Price Stopped Rising and Turned into Declining In June 2015

Date: 2015-08-11

“In July 2015, CCM discussed with industry insiders, about the First Catalogue of Recommended Substitutes for HCFCs (Exposure draft) released by the FECO in June, and concluded that natural refrigerant promoted by the government is a development direction for the industry in the future, however now posing no threat to the leading HCFCs and HFCs.

In July 2015, Zhejiang Yongtai announced to continue suspending the trading of shares because of the private placement. Based on the status quo of Zhejiang Yongtai, involving the high productivity maintenance, construction of new projects, extension of industry chain and the cross-industy development, CCM expects its business performance to keep high-speed growth during 2015-2016.

In late July 2015, Do-Fluoride announced that it had signed the Equity Transfer and Capital Increase Contract with Longgang Investment, Hebei Hongxing and the People’s Government of Xingtai County (Hebei Province) to officially put up a capital of USD26.17 million (RMB160 million) to control Hebei Hongxing, so as to push forward its complete layout from Li-ion battery to alternative energy vehicle.

In July 2015, Chemours announced that it would expand the HFO-1234yf production line in Changshu City, Jiangsu Province, by doubling the production capacity so as to satisfy the increasing demand from the global vehicle industry.

In mid-July 2015, qualified products were successfully produced through the R22 production facility of Haohua Honghe. This was the first time that the production facility had resumed production in recent 2 years. 

In mid-July 2015, Shanghai 3F announced the completion of the private placement, through which it raised a huge fund of about USD241.64 million (RMB1.48 billion), to be used for the financed project and as working capital.

In July 2015, Zhejiang Juhua announced to join hands with Netsun to establish a JV to introduce Internet Plus concept. Specifically, it is to develop e-commerce business, build up an Internet-based supply chain management platform and construct a Internet finance service.

In mid-July 2015, the USDC announced that it would initiate an anti-dumping investigation on HFCs imported from China. This indicated that the Chinese HFC industry would again be challenged, after the anti-dumping and anti-subsidy investigation on HFC-134a in 2014.

In June 2015, with the weakened downstream demand, the domestic PTFE price stopped rising and turned into declining.

During January-May 2015, the total R22 exports declined by 12.25% YoY. However, under the circumstances that both the production quota and the export quota were decreased, CCM believes that it was still a passable record, when compared to the domestic market.

In early July 2015, CCM, jointly with the domestic refrigeration and air-conditioning industry insiders, probed into the First Catalogue of Recommended Substitutes for HCFCs (Exposure draft) which was released by the FECO in June. In the catalogue, only 1 fluorine-enriched refrigerant is listed amongst all substitutes, namely HFC-32, whilst the others are natural refrigerants, such as R290.

However, the interviewees clearly specified that the natural refrigerant cannot significantly pose threat to the mainstream HCFCs and HFCs, in the next 1-2 years.

– The downstream air conditioner manufacturers only applied a small amount of NRs or just held a wait-and-see attitude
– The fluorine-enriched refrigerant producers are commonly confident in the HFCs

In mid-July, the USDC again initiated an anti-dumping investigation on the HFCs from China. This indicates that China’s HFC industry is again challenged, after the anti-dumping and anti-subsidy investigation made on the HFC-134a in 2014.

CCM believes that this anti-dumping investigation will further exert pressure on China’s HFC export, in addition to the restriction brought by the quota regime implemented by the EU.

As China’s HFC industry has already been trapped in overcapacity, the enterprises are expected to proactively join hands and strive for the success in this case with the help of the government, so as to safeguard a favourable export market.”

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