IM’s Fluorspar conference in
London in October 2013, Sarah Kienzle, managing director at
consulting firm Linden Tree Partners, told attendees that, in
light of the new European regulations on refrigerants, the
fluorspar market could move towards a "winter solstice" or
enter a "bubbly world" in the near future.
The "winter solstice" would be
beneficial for fluorspar demand, with new fluorine-based
environmentally friendly products entering the global
refrigerants market and reviving a currently depressed
fluorspar industry, Kienzle said.
On the contrary, a "bubbly world",
which envisages the use of fluorine-free new refrigerants
worldwide, would be a big blow
to the fluorspar market, further
impacting demand in one of its main end-markets, she added.
The trends in the refrigerant
market in the last year saw many companies develop new
products, which, despite slow initial demand, could potentially
lead fluorspar consumption towards Kienzle’s
However, several air conditioning
companies in Europe have been considering the possibility of
using fluorine-free refrigerants based on carbon dioxide
(CO2) and ammonia (NH3).
Although refrigerants will remain a
big part of the fluorspar market, other applications and
sectors could help revive the market in the near and long term,
as they continue to grow at a fast pace, especially in emerging
Fluorspar, also called fluorite
(CaF2), was deemed by the British Geological Survey
(BGS) as an "at risk" mineral in 2012 because it is
indispensable for the production of a wide range of chemicals,
including refrigerants, polymers, lubricants and
Two fluorspar grades are important
in terms of traded volumes. Acid-grade fluorspar (acidspar)
which has a minimum content of 97% CaF2, is
fundamental for the production of hydrofluoric acid.
Metallurgical-grade fluorspar (metspar) meanwhile, which has a
content of 70-80% CaF2, is used as a flux in steel
making as well as in the glass and cement industries.
Despite its importance, fluorspar
demand has been sluggish in the last two years, with a market
characterised by oversupply and low prices.
Figures from IM
Data show that global fluorspar production reached
6.5m tonnes in 2013, while global consumption was about 6.2m
tonnes in 2012, according to market research firm, Huxtable
Associates. According to a report published in March by
Trasparency Market Research, annual fluorspar
consumption in 2013 was about 5.6m tpa.
This has created a supply/demand
imbalance in the last two years, which has generated oversupply
worldwide, with consequent downward pressure on prices.
Other industry figures show that
consumption was about 6.2m tonnes in 2012, down 3% compared
with 2011, with consumption rising only in China and India.
Although a report published in May
by market research firm ResearchInChina forecast
fluorspar output from China will slip to 2.85m tonnes in 2016,
consumption in the country expanded by 2.2% year-on-year
(y-o-y) in 2013, reaching 4m tonnes.
On the other hand, fluorspar
consumption has been increasing in China to 3.4m tonnes
in 2012, up 3% y-o-y, with steady
growth from 1.4m tonnes consumed in 2003. China
is also the world’s
largest producer of fluorspar, with a production capacity of
3.7m tonnes in 2013.
China is reported to have
stockpiled up to 160,000 tonnes fluorspar as the country
produced 1.9m tonnes fluorspar in H1 2014, unchanged from the
same period in 2013, according to China’s Ministry
of Land and Resources.
Total consumption in the US, a
country that entirely relies on fluorspar imports, increased by
6% y-o-y in 2013, but volumes are still below the values
recorded in 2011, according to the US Geological Survey
Meanwhile, producers in other
countries have expanded their production capacities in the last
few years, with the world’s leading producer
Mexichem SA having an established capacity of 890,000 tpa,
followed by Mongolia-based Mongolrostvetmet LLC, Grupo Minersa,
Fluormin, Solvay and Kenya Fluorspar, which has a capacity of
about 100,000-120,000 tonnes.
Other producers account for a total
capacity of 510,000 tpa.
In the UK, British Fluorspar Ltd
(BFL) started mining fluorspar at Cavendish Mill, Derbyshire,
in 2013, with a production capacity of 65,000 tpa acidspar.
"We have reached a steady
production [at Cavendish Mill] in 2014, with the majority of
the sales being to the hydrofluoridric (HF) acid and dried
fluorspar markets," Lorenzo Di Donato, BFL’s
managing director, told IM.
In addition, mining companies are
expanding production. Hector Valle, Mexichem
Fluor’s CEO, said at the Fluorspar 2013 conference
that the company was expanding its production capacity in
Elsewhere, in the US, fluorspar
production started at the Klondike II mine in Kentucky in 2013
and additional fluorspar was sold from stockpiles as a
by-product of limestone quarrying, according to the USGS.
Other producers are developing
projects worldwide, which could enter production in the next
three years (see table).
However, weak market demand for
acidspar in the last 18 months has affected fluorspar
production from producers outside China. According to
IM Data, fluorspar production is set to fall
by 1.7%, in 2014, to 6m tonnes, with smaller producing regions
lowering output, while China and Mexico are expected to keep
production levels flat.
IM Data reported
stable acidspar production in China and Mexico in Q2 2014,
which is likely to "push the market further into excess".
As a consequence of this persistent
oversupply, several new projects worldwide are on hold, with
Masan Resources continuing testwork at Nui Phao. Meanwhile,
Canadian junior Prima Fluorspar Corp., which is still
developing its Liard fluorspar project in Canada, announced a
name change in July to Prima Diamonds Corp., following the
breakdown of an agreement for the acquisition of the
Delgerkhaan fluorspar project in Mongolia.
India is one of the few markets
that has recorded high fluorspar demand with a consumption
growth in Q2 2014, on the back of a rebound in its economy.
The developments outlined in the
table will see a ramp up in fluorspar production in
the next three years, which could further widen the gap between
the global production capacity and demand, eventually adding
pressure to the present supply/demand imbalance.
The current oversupply in the
fluorspar markets is, unsurprisingly, affecting prices.
According to IM Data, average acidspar prices
fell by 13% and 17% in June in Europe and the US, respectively
(see Prices Box).
Competition between South African
and Chinese producers to supply the Indian market has also
contributed to further lower acidspar prices, IM
This impacted fluorspar demand in
the first six months of this year. "Demand in the first half of
2014 was weaker than 2013; [demand in] 2012 was better than
2013. Market conditions have been progressively getting
tougher," Pablo Dyre, head of sales and marketing at Kenya
Fluorspar, told IM.
Recent trends in the fluorochemical market
Acidspar has the largest share of
the fluorspar market, representing about 60% of annual
consumption, as it is used for the production of HF acid, with
a ratio of 1.9-2.2 tonnes acidspar/tonne of HF acid.
As a chemical product, HF acid is
used in the semiconductor industries for its etching
HF acid is also an important
intermediate for the production of a wide range of
fluorochemicals, such as hydrochlorofluorocarbons (HCFC),
perfluorocarbons (PFC), hydrofluorocarbons (HFC),
hydrofluoroolefins (HFO), fluoropolymers and important
inorganic fluorides such as aluminium fluoride
(AlF3) and LiPF6.
Metspar is supplied to the
steelmaking, iron and steel casting industry, where it is used
as a flux to lower the melting temperature in kilns.
In the last two years, a depressed
fluorochemical market in Europe and the US has negatively
affected acidspar demand, due to low sales volumes and prices
among the major fluorochemical producers, particularly in the
World-leading vertically integrated
fluorspar and fluorochemical producer, Mexichem Fluor, saw its
sales reduce by 9% y-o-y in the first half of 2014, with sale
volumes down 14% compared with the same period in 2014, in both
cases due to low demand for fluorspar and low refrigerants
However, the company said that it
has been restructuring its fluorine business and negotiating
higher fluorspar contracts with its customers in the first half
of 2014, two measures that will offset softer volumes during
the remaining part of the year.
"It is in the fluorine chain - the
business unit providing the highest margin of return to the
company - where we see an industry in which consolidation seems
inevitable," Mexichem said in a statement.
"These changes in the industry are
not immediate; they will take more than a couple of years to
become a reality," it added.
The company said it expects
fluorspar prices to improve during the second half of 2014,
compensating for the lower sale volumes and the low prices of
US-based fluorochemical producer
Honeywell also saw its sales shrink by 3% y-o-y in 2013 in its
HF acid, refrigerants, insulating foams, fluoropolymers,
fluoroaromatics and fluorine-based fine chemicals products, all
part of its advanced materials business unit.
The company said that sales in 2013
were impacted by pricing volatility and low supply of raw
materials including fluorspar and R-240, a key component in
insulating foams, global warming refrigerants and blowing
The fluorine chemicals business of
world-leading chemical company DuPont’ was also
affected by low prices. In 2013, the firm posted 6% and 7%
contractions in sales from its electronics and communications,
and performance chemicals business units, respectively.
The company said that its negative
performance was caused by 8% and 12% slumps in prices from its
electronics and communications, and performance chemicals
sectors, which more than offset a corresponding 2% and 5%
growth in volumes.
DuPont added that higher volumes,
in particular in photovoltaic, packaging and automotive
markets, were offset by low prices in refrigerants and
fluoropolymers, which account for 33% of the
Belgium world-leading chemical
company Solvay SA also saw its fluorochemical business impacted
by low prices, with sales in its advanced formulations,
advanced materials, performance chemicals and functional
polymer sectors falling by 5%, 7%, 1% and 7%, respectively. All
sectors posted a 20-60% contraction in sales volumes and a
31-98% fall in prices, except for performance chemicals, which
saw a 43% increase in volumes, offset by a 25% fall in
French fluorochemical manufacturer
Arkema recorded a contraction of its fluorochemical business
during 2013, with a 4.6% decrease in sales, due to a 2% fall in
prices of fluorogases, which more than offset a 1.4% growth in
Arkema also posted lower sales in
polyvinylidene difluoride (PVDF) due to a 4.1% fall in prices,
which offset moderate increases in volume.
In Asia, fluorochemical producers
posted positive results in 2013, with Chinese vertically
integrated fluorochemical producer, Sinochem Lantian, recording
a 1.5% sales growth y-o-y.
The company said that it was able
to maintain business growth by expanding its fluorine product
Japanese fluorochemical producer
Daikin Industries, also posted higher sales in its chemicals
business unit in 2013, with a 13% increase compared with
Daikin said that sales promotion in
the automotive and semiconductor sectors, as well as efforts to
develop its business in China, led to positive sales growth
despite the bearish market conditions.
"Demand in Japan for fluoropolymers
was sluggish, but results exceeded the previous year from
improvement in infrastructure investment in China," the company
said in its annual report, adding that an increase in revenues
for fluoroelastomers was driven by greater automotive demand in
Daikin said that sales of
fluorocarbon gases increased in Asia, despite strong
competition from Chinese producers. The company posted a 3%
increase y-o-y in its fluorocarbon gas business in 2013, with
its fluoropolymer and fine chemical businesses up by 17% and 9%
However, Daikin saw sales in its
refrigerant business decrease by 12% y-o-y in Q1 2014, due to a
"curtail in sales accompanying lower selling prices in
AGC Chemicals, a subsidiary of the
second leading Japanese chemicals producer, Asahi Glass, posted
a 13% increase y-o-y in sales in its chemicals business during
2013. The company said that shipments of fluorinated resins and
pharmaceutical/agrochemical intermediates remained buoyant.
The company said it expects
shipments of fluorochemicals to remain strong in 2014.
AGC Chemicals announced the opening
of a technical centre in Shanghai, in March, to develop
fluorinated functional chemicals and meet increasing demand for
fluorinated coatings and architectural films in the Chinese
automotive, electronics and construction markets.
The Indian fluorochemical market
showed oscillating demand in 2013 with sluggish demand for
refrigerants and high consumption of fluoropolymers and
Navin Fluorine Ltd posted an 11.6%
contraction in its net sales in the full year ending March
2014, compared with the same period in 2013.
The company saw its refrigerant
sales decrease by 12.5% decrease y-o-y in financial year 2014,
with average production of R-22 refrigerant restricted at
Navin Fluorine also saw sales of
its fluorine-based products for agricultural and pharmaceutical
applications decrease by 12.3% y-o-y to Indian rupee (INR) 156m
However, the company recorded a
14.1% increase in sales in its inorganic fluoride business
unit, with solid demand in the domestic glass, metals, agro and
In July, the company said it was
planning to expand its inorganic fluoride portfolio and to
build a facility for value-added fluoro-organics products.
It also said it aims to diversify
fluorspar sourcing from China to other geographies and it
formed a joint venture (JV) with Gujarat mineral Development
Corp. (GMDC) and Gujarat Fluorochemicals Ltd (GFL) in 2011, for
the beneficiation of fluorspar ore from reserves located in
Gujarat, India-based, GFL saw sales
in its fluorochemical and chemical business unit increase by
6.7% in the full year ending in March 2014, compared with the
same period in 2013.
In particular, its sales of PTFE
grew by 11.9% y-o-y in the financial year ending in March
GFL said that PTFE accounted for
about 38% of the company’s sales in 2013-2014, of
which 24% were in the domestic market and 76% in exports.
However, the Indian supplier said that its PTFE export value
fell by 21% in 2013-2014.
The global refrigerant market is
highly diversified, with different products sold to different
regions, but it was overall impacted by low prices from Chinese
According to a report published by
market consulting service Ceresana in June, demand for
refrigerants is increasing in Asia-Pacific owing to a rising
middle class and a higher meat consumption, which requires
higher volumes of refrigerators.
A report from market research
company MicroMarket Monitor published in July suggests
that Asia-Pacific region accounted for 85% of global
consumption in the HFC refrigerant market in 2012 and it
expects the region to reach a volume of 758,000 tonnes by
China dominates the HFC refrigerant market, with a production
capacity of 689,000 tonnes, followed by the US, Japan, Germany,
India and the Netherlands, according to market analysis from
international trade exhibition and market information service,
The main end-markets are
commercial, room and mobile air conditioning (MAC) and the main
commercialised products are HCFC-based R-22, HFC-based R-32,
R-125, R-134a and R-143a products.
R-22 is the most widely-used
refrigerant in the world, but in Europe it has been banned
following the Montreal Protocol’s policies for the
phase out of HCFCs due to their high ozone depletion potential
(ODP). Although existing systems can continue to operate, a
strict refilling ban comes into force for R-22 in January
According to a report published by
the international business research company Freedonia Group
Inc., HCFC demand will steadily decline globally, with
progressive HFC-based substitutive products absorbing part of
the demand. The report said that demand for HFCs grew
considerably from 2001 to 2011.
China, the largest consumer of R-22
refrigerant, committed to eliminate HCFCs by 2030, in favour of
new types of products.
In December 2012, prices for R-22
product reached $1,400/tonne, down from $2,400/tonne in the
beginning of the year, due to reduced demand from downstream
industries and a reduction in production costs, according to
In addition, Chinese domestic
producers have planned to build HFC-based R-32 and R-410a
production lines due to an optimistic forecast in growing
demand for zero-ODP products.
Several fluorochemical producers,
including Shangdong Dongyue Group, Jiangsu Meilan Chemical Co.,
Jiangsu Blue Green technology Co. and Zigong Honghe Chemical
Co. have started building plants for R-32 production, with
capacities varying between 10,000-50,000 tpa, for a total
capacity of 228,500 tpa, CCM said.
Chinese world-leading chemical
producer, Sinochem, expanded its fluorine portfolio with
fluorine-based special chemicals, inorganic fluoride salts and
two automobile refrigerants, HFC-134a and R-4 which are also
used in commercial air-conditioning.
The company, which owns more than
30m tonnes of fluorite resources in several provinces,
including Jiangxi, Hunan and Fujian, and produces 80,000 tpa
anhydrous hydrogen fluoride (AHF), said it has developed 40 new
HFC-based refrigerants with a low global warming potential
(GWP), and a production capacity of 160,000 tpa fluorocarbons,
accounting for 30% of the existing Chinese domestic refrigerant
The GWP is calculated as 100-year
climatic warming potential of 1kg of greenhouse gas compared
with that of 1kg of CO2.
R-32 is the HFC of choice in China,
as it has the advantage of being a zero-ODP product with a GWP
of 675, compared with R-410a, which has a strong greenhouse
effect with a GWP of 2,100.
According to CCM, the
world’s largest air-conditioner compressor
manufacturer GMCC Co. developed an air-conditioner system that
will boost R-32 consumption in the domestic market.
The Freedonia Group
forecast that HCFC-based R-22 demand in China will start to
decline throughout 2016, with an accelerated fall through 2021,
in favour of a growing demand in HFCs.
R-22 is also the major product used
in the Indian refrigerant market, with domestic consumption
amounting to 9,000 tonnes and exports up to 16,000 tonnes in
2012-2013, according to Navin Fluorine.
The company estimates a total
production capacity of 45,000 tpa R-22 in India. Navin Fluorine
also said that there is a possibility that HFC-based products -
especially R-410a and R-32 - will substitute R-22 in the
short-term, following the phase out schedules from the Montreal
Protocol, which sets a 67.5% reduction in R-22 usage by 2025 in
Ceresana forecast refrigerant
demand in India to grow at a rate over 5%. Navin Fluorine said
in July that it expects a 10% cut in R-22 consumption in 2015
and a complete phase out by 2030. According to the chemical
producer, more than 90% of the room air conditioner market uses
Refrigerant demand in the Middle
East was about 114,700 tonnes in 2012, and it is expected to
grow steadily, reaching 154,400 tonnes by 2018, according to
However, the region is planning to
phase out HCFCs, with a consequent shift of demand to
alternative products, including HFOs and natural
The refrigerant market has been
traditionally strong in North America, with demand for
large-scale air conditioning systems remaining flat, according
Sources told IM
that demand for refrigerants in the US has been steady over the
last two years, while demand from original equipment
manufacturers and the automotive industry has increased in
Mexico, owing to new installations in supermarket
Demand has been impacted by low
prices, with some small companies importing low quantities of
cheaper products from China, according to IM
"Chinese products are affecting the
refrigerants market," an industry insider told
IM, adding that low prices affected also
demand for alternative natural refrigerants in commercial
Mexichem submitted a case against
Chinese imports of refrigerant gases R-134a in October 2013.
The International Trade Commission confirmed in December last
year that the fluorochemical industry had been supported by
low-priced refrigerants imported from China.
A preliminary countervailing and
anti-dumping resolution released by the US Department of
Commerce (DoC) in May this year ruled for countervailing and
antidumping compensation duties of 16% and 187%, respectively,
to imports. The final resolution is expected to be released by
the end of 2014.
Mexichem believes that a favourable
ruling from the DoC against Chinese refrigerant gases
manufacturers will help recovery in the market.
"We have already seen some price
increases in June, as there was no import of Chinese products
in the US since the ruling, so the market has shut down for
China," Antonio Carrillo Rule, Mexichem’s general
director, said to investors in July.
Carrillo said he expects a strong
rebound in refrigerant sale volumes to start in early 2015,
with a full recovery in early 2016.
An increase in fluorogas prices
would positively affect refrigerant demand and ultimately in
Industry players told
IM that higher refrigerant demand in the last
two years was reported in Latin America, in particular in
"In all Latin America, the foam
sector is growing," said one source.
Slow economic recovery in Europe
has affected refrigerant demand, which remains sluggish, with
high fluctuations in raw material prices, rising manufacturing
costs and tight competition from Asia-Pacific producers,
according to MicroMarket Monitor.
In Europe and the US, new
regulations on HFCs are already affecting demand for HFC
refrigerants and are likely to have a deeper impact on the
market in the near future.
Following the Kyoto Protocol
on greenhouse gases, which was adopted in 1997 and came into
force in 2005, the EU set new regulations on fluoro gas
emissions, which will come into force in 2015.
The MAC directive prohibits the use
of refrigerants with GWP greater than 150 in new types of
vehicles introduced in the market from 2011, and from all new
cars and vans from 2017.
The fluoro gas regulation, which
will become effective from 1 January 2015, will prohibit
domestic refrigerators and freezers containing HFCs with a GWP
higher than 150, and a ban on commercial refrigerators adopting
HFC with GWP higher than 2,500 protracted to 2020.
The ban will gradually apply to
other systems with single split air conditioning systems
containing less than 3kg of fluorogases and GWP of 759 or more
to be the last banned in 2025.
The new regulations also prohibit
the use of sulphur hexafluoride (SF6) in vehicle
tyres and in magnesium die-casting.
By 31 October, the European
Commission will also assign quotas to each HFC producer and
importer, according to annual average quantities of HFC-based
products placed in the market by the producer between
The new regulations also called air
conditioner manufacturer to use more environmentally friendly
products, which have been in development over the last two
years by several producers, including alternatives like
HFO-based products, hydrocarbons (HCs), NH3, and
HFOs vs natural
DuPont has been producing several
HFO-based refrigerant products with zero-ODP and GWP of less
than 1. In particular, HFO-1234yf has been demonstrated to have
a 99.7% better GWP score than currently used HFC-based
refrigerants, according to DuPont.
The company has introduced a number
of HFO-based product such as its Opteon XP40 refrigerant, which
has GWP of 1397, 65% lower than a R-404a/R-507a mixture, which
it can immediately replace in commercial and industrial medium
and low temperature refrigeration systems.
Honeywell has also developed a low
GWP HFO-based refrigerant Solstice line for automobile air
conditioning, a propellant for aerosol application, liquid and
gas blowing agents and industrial solvents.
The company said its Solstice refrigerant has already been
distributed to 1m vehicles and it expects the number of sales
will double by the end of 2014.
Honeywell announced in September
that it would invest $550m to market new HFO-based refrigerants
and blowing agents, complying with the new regulations to phase
out high-GWP HFCs.
The US-based producer said it would
reduce its annual production of high-GWP HFCs by 50% by 2020, a
measure which corresponds to eliminating more than 350m tonnes
in CO2 equivalents by 2025.
According to DuPont, HFOs are the
best alternative to current HFC-based refrigerants as
fluorine-free alternative refrigerants such as CO2
have high operating pressures and overall unsustainability.
"As an automotive refrigerants,
HFO-1234yf has very distinct benefits with regard to fuel
efficiency and overall sustainability," DuPont said.
"CO2 would require a
much larger, heavier air conditioning system than what is used
in most cars today, which is contrary to the trend towards
smaller, more fuel-efficient, sustainable cars," the company
explained, saying that lifecycle climate performance
evaluations have also concluded that CO2 is not as
efficient as HFOs in warmer climates.
Additionally, HFO-1234yf, which has
a 100-year GWP of four, could be used as a "near-drop
replacement" for R-134a, without substantial modifications in
assembly lines or vehicle systems designs to accommodate the
product, DuPont said.
One of the issues presented by HFO
products is their mild flammability, which means they require
specialised equipment to perform the installation.
"Although the product is classified
as slightly flammable by the American Society of Heating,
Refrigerating and Air Conditioning Engineers (ASHRAE), several
years of testing by the Society of Automotive Engineers (SAE)
proved that the product could not be ignited under conditions
normally experienced by a vehicle," DuPont said.
Following the European
Commission’s approval of HFOs, a dozen vehicle
manufacturers in Europe, Japan and North America started
producing vehicles with low-GWP HFO-1234yf.
Meanwhile, several German car
manufacturers announced in March 2013 they are developing
CO2 as a low-GWP alternative for vehicle air
conditioning and approximately 16% of new refrigerated truck
and trailer systems adopted fluorine-free refrigeration systems
Daikin has been focusing on the
production of R-32 as a more environmentally friendly
refrigerant to replace R-22 and high GWP HFC-based products.
The Japanese producer said R-32, which has a GWP of 675, has
been already used in HVAC equipment to replace 50% of R-410a,
which has a GWP of 2,088.
Daikin said that, despite having a
GWP of one, CO2 would require high operating
pressures and temperatures and it could still present issues of
losses and leakage when air conditioners are switched off.
However, a report published in May
by the Institute for Governance and Sustainable Development
(IGSD) shows that up to 65% of new installations are using
fluorine-free refrigerants such as NH3,
CO2 and HCs are used in the global commercial
refrigeration market and HC-based systems are expected to reach
about 75% of global production by 2020.
Drink manufacturer, PepsiCo has
already established 240,000 HFC-free units, with Coca-Cola Co.
having already set up 1m HFC-free units as of January 2014 and
is aiming to have 100% HFC-free new cold drink equipment by
2015, according to IGSD.
Meanwhile, home appliances
manufacturer Whirlpool Corp. will apply HFC-1233zd refrigerant
in all US refrigerator and freezer manufacturing facilities by
the end of 2014, the IGSD said.
A study from the London South Bank
University (LSBU) published in April showed that there is a
strong inclination in Europe towards the use of alternative
fluorine free refrigerants.
A large take up of HCs in smaller
systems is present in the UK and Germany, with retailers and
other market leaders experimenting the use of CO2,
in particular in supermarket and industrial refrigeration,
according to LSBU.
However, the new European
regulations will drive the use of HCs and HFOs as alternative
refrigerants for small commercial systems in Germany and the
UK, with HFOs, HCs and CO2 being used in
supermarkets and in air conditioning, and NH3 and
CO2 in industrial sectors, the report said.
Major supermarket chains have
chosen refrigerants such as NH3 and CO2
in many new installations in Belgium, according to LSBU, while
in Italy 15% of refrigeration units already used HCs in 2013.
Poland has shown a strong attention towards the use of
NH3 and CO2 as alternative refrigerants,
According to MicroMarket
Monitor, global consumption of NH3 and
CO2 refrigerants was 109,000 tonnes in 2012 and it
is estimated to grow at a 7.5% compound annual growth rate
(CAGR) from 2013 to 2018. The two products accounted for 8-10%
of the global refrigerant market in 2014.
estimates a 13.5% CAGR in the use of NH3 and
CO2 refrigerant in the Middle East and South Africa
and a 6% CAGR in the US, in the next five years.
Vivek Jain, GFL’s
managing director, explained during the company’s
conference call in April that, at the moment, there are a
number of options for refrigerant products, with a lot of
fragmentation in the market.
Jain said he does not believe there
will be a universally acceptable refrigerant as different
countries and companies are following diverse approaches, but
following the EU’s acceptance of HFO-1234yf
product, this may become the universally recognised new product
The transition from HFC-based to
new low-GWP refrigerants will have a positive impact on the
fluorspar market. IM sources said that a
transition to HFOs would mean more demand for HF as its
required amount for the manufacture new HFO-based refrigerants
is higher than that for the present products.
However, a transition to
fluorine-free NH3 and CO2 systems will
negatively reduce HF consumption and will impact the fluorspar
The fluoropolymer market has
supported demand for HF acid in the last two years.
Fluoropolymers find a wide range of
applications including organic electronics and architectural
coatings (PTFE); LAN cable insulation (FEP and ECTFE) and for
photovoltaic cells (PVF); aerospace and aircraft industries
(polyvinylidene fluoride: PVDF); fuel cells, metal-ion recovery
and surface treatment; semiconductor industry, ultrathin films
in integrated circuits; and core and cladding in optical fibers
(Teflon and THV).
The fluoropolymer market is
steadily growing in China, according to CCM.
Shanghai 3F New Materials Co.
acquired Inner Mongolia Wanhao Fluorochemical Co. in 2011,
focusing on the production of VDF and PVDF and it expanded its
production capacity to 14,000 tpa VDF and 10,000 tpa PDVF.
Daikin started production of ZEFFLE fluoropolymer coatings at a
new facility in Changshu, through its subsidiary Daikin
Fluorochemicals (China) Co., in June 2013, following the launch
of its DAI-EL fluoroelastomer production line also in Changshu
in January of the same year.
The Japanese company aims to raise
its market share to about 30-40% of Chinese fluoroelastomer
consumption by 2015, which is expected to expand from $102.6m
in 2010 to $166.6m in 2015.
Another Japanese chemical producer,
Kureha Corp., is completing the construction of a PVDF plant in
Changshu, with a capacity of 5,000 tpa PVDF. The company
forecast a 300% increase in PVDF sales by 2015 compared with
sales in 2010, for a total of $204.7m.
Fengzhen city has recently invested
$400m in expanding its fluorine chemical industry capacity of
500,000 tpa. Its fluorochemical industry consists of six main
companies, including Inner Mongolia 3F Fluorine Chemical Co.,
and Inner Mongolia 3F Wanhao Fluorine Chemical Co., which
reached a capacity of 100,000 tpa in 2012 with a 12.5% increase
compared with 2011.
Each company produces different
fluoropolymer compounds, with a total projected capacity of
Fengzhen has been expanding its
fluorine chemical industry in order to achieve the goal of
"cyclic economy", with companies supplying raw materials such
as hydrochloric acid and F142b for the production of PVDF and
CaF2. This strategy will allow the fluorochemical
industry in the region to cut shipment costs and increase
The fluorocarbon resins market in
China has so far been controlled by Japan, according to
CCM. However, in 2013, Shaanxi Baotashan Paint Co. and
Shaanxi Yanchang Petroleum Group Fluorosilicone Chemical Co.
moved to produce innovative fluorocarbon resins and coating
technology in the Shaanxi Province.
Yanchang Fluorosilicone became a
vertically integrated producer, extending its industry chain
from fluorite and silica production to value-added products,
with a capacity of 500 tpa fluorocarbon resins and 1,000 tpa
According to CCM, 70% of
PTFE produced in China is exported each year and its demand has
declined in the last two years, as the Chinese
government’s macro-control over real estate.
However, Daikin said that despite
decelerating demand for FEP/PTFE resins in the Chinese market
for communications terminal electrical cables, it was able to
keep high sales of PTFE resins in volume-market zone segments
The Japanese company anticipated a
rebound in PTFE, fluororubbers and weather-resistant coatings
in China during 2014, owing to an expanding automotive-related
market and a resurgence of infrastructure investments.
Meanwhile, Solvay SA signed a JV
with Shanghai 3F in July, which will enable the Belgian
chemical producer’s fluorine-based products to
permeate more deeply into the Chinese market.
fluoropolymer business posted a 10% growth y-o-y in H1 2014,
driving Solvay’s overall growth in the financial
period. Growth in fluoropolymers was particularly strong in
Asia, a market that the company said it is targeting to supply
its Halar ECTFE and Solef PVDF fluoropolymers to the booming PV
According to a report from
Grand View Research, gradual recovery of the
automotive industry, especially in Asia, and the increasing
application of PTFE in chemical processing, construction,
electronics, cookware and medical sector is expected to drive
fluorochemical global demand over the next six years.
Fluoropolymers have an estimated
growth rate of over 10% from 2014 to 2020, with a market
revenue of about $9.1bn by 2020, Grand View Research
The fluoropolymer market is also
slowly increasing in India.
One of the major PTFE producers in
India, GFL, saw its PTFE sales grow by 34%, from 6,000 tonnes
in 2012-2013 to 8,000 tonnes in 2013-2014, with full year
production operating at about 50% of existing capacity.
GFL said that the global PTFE
market is around 150,000 tpa and it has grown at a 3-4% CAGR in
the last seven years.
However, the company said that the
market had witnessed significant upheaval during the last
three-to-four years, with a period of surplus and falling
prices following a period of shortage and rising prices.
According to GFL, the Indian PTFE
market is around 3,000-3,500 tpa and it is growing at a 7-8%
CAGR. The company, which has about 70% of the market share,
said it expects demand to grow in the future on the back of an
increasing usage in architectural and household
"There is an immense latent
potential for higher PTFE demand and the company is working
with Indian PTFE processors to develop new products and
applications to spur higher growth," GFL said, adding that
major opportunities are also available in the US, Latin America
and South East Asia.
"There also exists the potential to
work with reputed global players of PTFE based components to
expand the PTFE market in India," the company added.
The company said it is looking in
particular at the rebound in the US economy to boost the
In July 2011, India extended its
anti-dumping measure on China’s PTFE for another
five years; the Indian Ministry of Commerce and Industry
started an anti-dumping sunset review investigation in 2010,
with a levy a $3.87/kg anti-dumping duty on PTFE produced and
exported by Chinese manufacturers.
The measure was adopted to
counteract low PTFE prices from China, which showed a downtrend
from $22,275/tonne in January 2012 to $12,718/tonne in December
2012, due to a reduction in demand and production costs,
according to CCM.
Demand for fluoropolymers in Europe
was sluggish as well as in the US, due to the impact of a
depressed automotive sector, according to Daikin. However,
French producer Arkema recorded a 0.9% growth y-o-y in sales
volumes in its high performance materials business in 2013,
with increased demand for PVDF in batteries and
(AlF3), which is used for the production of
aluminium, is another important market influencing the demand
of HF acid and acidspar, accounting for 27% of global acidspar
consumption, a proportion that is expected to rise in the near
In China, the AlF3
operating rate was kept quite low in 2013, especially in Q3
2013 when AlF3 production decreased to about 27%,
China saw an oversupply of
AlF3 in 2012 with a production of 621,500 tonnes
largely exceeding a domestic demand of 500,000 tonnes. This
continued in the first part of 2013, although total output of
AlF3 in H1 2013 still exceeded 292,000 tonnes.
In addition, market demand for
AlF3 from its downstream industries, such as
electrolytic aluminium, were stable, with operating rates of
some domestic electrolytic aluminium enterprises being lower
However, demand for AlF3
will continue to rise in China, as the country is expanding its
aluminium industry. According to IM Data,
China’s AlF3 production capacity was
about 1.17m tonnes in 2013, just below the total global
consumption of 1.23m tonnes in 2013.
According to Hunan Nonferrous
Fluorine Chemical Group, aluminium production in China
increased steadily from 17.45m tonnes in 2011 to 21.9m tonnes
in 2013 and it is expected to reach 24m tonnes by end 2014. The
group expects the AlF3 production capacity in China
to reach 1.3m tpa by the end of 2014.
In 2013, Sinochem put its 20,000
tpa HFC-125 production line in operation, started manufacturing
AlF3 and expanded its TFA production capacity. The
company also produces fluoropolymer and fluorine-based fine
chemical products with a capacity of 12,000 tpa.
Aohan Yinyi Mining Co. also started
production of AlF3 at its plant in Aohan County,
with a capacity of 30,000 tpa AlF3.
The plant will also produce AHF
acid with a capacity of 30,000 tpa.
Guizhou Wengfu Lantian Chemfluos, a
JV between Guizhou Wengfu Group and Zhejiang Lantian
Environmental Protection Technology Co. is expanding its
production capacity to 80,000 tpa AHF acid.
Growing export demand has pushed
Chinese producers to ramp up output in Q1 2014, with regional
governments pushing producers to expand HF and AlF3
capacities. This is expected to give a comparative advantage to
suppliers strategically located close to major areas of
production, according to IM
Russia has been one of the major
importers of Chinese AlF3, with imports from China
increasing by 335% y-o-y in 2013, to about 47,000 tonnes, as
aluminium producers turned to lower cost sources, IM
Data said. World-leading aluminium producer UC Rusal
started importing AlF3 from China in 2014.
Demand for inorganic fluorides is
also growing in India, where Navin Fluorine posted a 44% growth
in sales of inorganic fluorides, mainly the HF and ammonium
bifluoride for applications in glass, metals, agrochemicals and
pharmaceutical domestic industries, which account for 88% of
The Middle East experienced a
continuous growth in AlF3 production during 2013,
according to Roskill Information Service, on the back
of a growing aluminium industry.
The world’s third
largest aluminium producer, Aluminium Bahrain (ALBA), is
increasing its smelting capacity from 830,000 tpa to 1.2m tpa
aluminium, while state-owned Dubai Aluminium and Mubadala
Development of Dubai have recently announced plans to construct
a $8bn smelter with a capacity of 1.2m tpa aluminium.
In September, Gulf Fluor
commissioned its Industrial City of Abu Dhabi (ICAD) plant in
the United Arab Emirates (UAE) with a production capacity of
60,000 tpa AlF3 and 10,000 tpa HF.
A Gulf Fluor’s
spokesperson told IM that the company would
ramp up production in 2014, moving from the current 60% to full
capacity in 2015.
"Gulf Fluor’s plant is
a switch plant where we can reduce AlF3 production
and increase HF production if there is a market demand. Our HF
capacity [at the plant] is 52,000 tpa," Gulf Fluor said.
The plant will use about 120,000
tpa acidspar for the production of AlF3 and HF,
which will be supplied mainly from Africa and Asia, although
there are no restrictions on supply, Gulf Fluor said.
The company told
IM that AlF3 consumption in the
region is increasing and that it expects it to reach 120,000
tpa by the end of 2017, including high and low bulk
Italy-based Fluorsid SpA, a
world-leading producer of AlF3 and synthetic
cryolite, told IMÊthat since 2013 it has
not seen on global basis a demand increase for
"The aluminium production worldwide
has been in fact slightly growing mainly because of new
capacities in Asia - especially in China - which are more than
compensating the negative trend in the rest of the world,"
The company added that it has
strengthened its AlF3 production owing to a larger
vertical integration achieved by doubling the production
capacity of sulphuric acid at its plant in Sardinia, Italy.
Towards a "winter
Despite a slow introduction of HFOs
as alternative products in the refrigerant market, the near
term future may be a bit rosier in terms of fluorspar demand,
with a possible increase in consumption of acidspar coming from
the growing markets of fluoropolymers and inorganic
Pablo Dyre, head of sales and
marketing at Kenya Fluorspar, told IM that
fluoropolymers is a growth sector and many companies have
invested in capacity increases, especially since 2012.
"Within this sector
LiPF6 for lithium battery manufacture is
experiencing high growth/high profit," Dyre said.
It is true that a big share of the
global future fluorspar demand will ultimately depend on the
adoption of HFO-based products or alternative fluorine-free
products in the refrigerant market.
However, the market will probably
not enter into a "bubbly world".
"HFCs will continue to have good
demand until such time that their phase-out begins to approach
the elimination of production," Dyre said.
"Replacement products such as HFOs
will initially have slow, but steadily increasing, growth as
they are, conversely, being phased in," he added.
Fluorspar demand has been growing
in India and China, and it is expected to grow in the Middle
East. Huxtable Associates forecasted world consumption of
fluorspar to reach 7.3m tonnes in 2020, of which 4.4m tonnes
acidspar and 2.9m tonnes metspar.
Although a strong rebound in
fluorspar demand might be hampered by the use of fluorine-free
refrigerants, new economies and new markets - in particular the
automotive market - could drive fluorspar demand beyond
expected volumes, and lead it into a "winter solstice".
The lithium battery market represents another big opportunity
for future growth in fluorspar demand in the near future.
China produced over 1bn sets of
mobile phones in 2010, accounting for 65% of global production.
The Chinese mobile phone industry consumed about 5,900 tonnes
of cell liquor of LiPF6, according to China
Chemicals Market International (CCM), which said that
production of mobile phones will increase fast and drive demand
for LiPF6 production.
According to the market research company, the automotive
industry will also increase the use of LiPF6, with a
global consumption of 45,000 tonnes by 2015.
Global consumption of cell liquor
of LiPF6 reached 35,000 tonnes in 2010 and is
expected to double in 2014. This corresponds to a growth in
LiPF6 demand from 4,500 in 2010 to 9,000 tonnes in
2014, mainly concentrated in China, according to
In 2011, Japan was the main
producer of LiPF6 followed by China and South Korea;
however, several Chinese producers are planning to expand to
add 5,000 tonnes to their production capacity in the near
future, CCM said.
The consulting company forecast
LiPF6 production capacity in China to reach 15,000 tpa in 2015,
being able to satisfy the entire domestic demand.
leading provider of bulk commodities, said that Chinese LiPF6
production increased by 120% to 3,300 tonnes in 2012 and that
the country will be 90% self-sufficient by 2015 (see Figure
Since 2011, several companies included Do-Fluoride Chemicals
Co. and Jiangsu Jiujiujiu Technology Co. have expanded their
LiPF6 output by 900 tonnes, with new production lines under
construction. Sichuan Huangming Lithium Energy New Materials
Co. is building a LiPF6 production line with a
capacity of 3,000 tpa which will be completed before
In August, the FOB price of
Mexican acidspar (97% CaF2, <5ppm) stood at
$370-420/tonne, while price of Mexican acidspar 97%
CaF2, >5ppm, is $290-$330/tonne, according to IM
DAP price of metspar, 75%
CaF2, from Mongolia, amounted to $160/tonne, while
the FOB price of Chinese metspar (min 80% CaF2) was
at an average of $210/tonne, as of August 2014.
According to Chinese data provider
SunSirs, the average price of HF acid was Rmb
6,630.7/tonne ($1,609/tonne) in 2014, while the average price
for PTFE as of September was Rmb 53,593/tonne ($8,575/tonne) as
director, Vivek Jain, said that PTFE weighted average price in
India was about $9,000/tonne as of May 2014, but it expects it
to increase to $11,000/tonne in the next three years, as sales
of higher value grades pick up and the company starts running
at full production capacity.
Jain also believes that a stronger
demand for HFO-1234yf refrigerant will have a beneficial impact
on PTFE prices, as the manufacture of this product will require
more demand for HFP and TFE fluorochemicals in the next five
years, reducing the oversupply currently generated by Chinese
According to imports data from
Zauba, the anhydrous HF (AHF) price imported from
China amounted to INR 84,900/tonne ($1,358/tonne) and price of
AHF imported from Japan was INR 94,200/tonne ($1,507/tonne).
Prices were estimated from the total values and total volumes
of import data.
According to recent figures from
aluminium consulting agency, AZ China, AlF3 prices
in China were about Rmb 6,500/tonne ($1,040/tonne) as of June
2014, with prices rising to Rmb 50/tonne ($8/tonne)
week-on-week due to low inventory levels.
LiPF6 at $30/kg, 15% lower than the material
imported from Japanese producers. According to CCM,
LiPF6 domestic prices fell from 4,125/kg in 2006 to
$35/kg in 2012 and are continuing to decrease.
Full information on all IM’s
prices can be found on the IM Prices Database.
For fluorspar prices, please visit the IM Data
mineral tracker pages.
*Conversions made October 2014