Fluorspar end market focus: Q3 2014

By Andrew Miller
Published: Friday, 18 July 2014

Downloadable: IM Data analyses the recent developments in the fluorocarbon market

As slowing economic growth rates, particularly in emerging countries, restricted refrigerant demand in 2013, fluorocarbon producers have been sceptical about an upturn in the market this year. Entering H2 2014, however, positive end-market sentiment suggests we may have already seen the bottom of the market.

The push towards HFOs
The phase-out of hydrofluorocarbons (HFCs) ramped up in H1 2014 as the European Council announced plans for 2015, which are scheduled to reduce emissions from the region by 66% by 2030.

Furthermore, China announced ambitious plans in May to cut HFC emmissions by 280m tonnes of CO2 equivalent over the next two years.

Cooperation from China – the second largest emitter of greenhouse gases – would represent a major step in the transition from HFCs to hydrofluoroolefins (HFOs).

With leading chemical companies stepping up the production and development of HFO alternatives, utilisation rates are set to increase considerably over the coming 18 months.

Cars driving demand

As fluorspar demand from the fluorochemical sector continues to be stifled by slow economic growth rates, the automotive market is providing some reasons for optimism, particularly in Europe.

The European Automobile Manufacturers Association have reported that in the five months to May 2014, car registrations increased by 6.9%, while IHS Automotive have forecast growth in global automotive production of 3.7% in 2014.
Although consumption rates in emerging markets have slowed over H1 2014, an upturn in production is expected over H2 2014, particularly in China where the government is aiming to drastically increase its output of electric vehicles.

Consumption of refrigerant chemicals from the automotive air conditioning sector, subsequently looks set to increase.

Refrigeration hots up in China

The development of emerging economies has, and will continue to, drive fluorocarbon production.

Rapid urbanisation will be the driving force behind this demand despite slowing economic growth levels in recent years.

According to McKinsey Global Institute estimates, China’s upper middle class is expected to increase from 14% of the population to 54% between 2012 and 2022.

This development will fuel a rise in consumption of household goods, such as refrigerators. By 2035, Rio Tinto expect there to be 0.7 refrigerators per person in China, up from close to 0.5 today, illustrating the growth potential for fluorocarbons in developing countries.

To download IM Data’s Quarterly outlook for the fluorspar market, please click here.


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