Fluorspar hopes pinned on a fluorochemical winter solstice

By Antonio Torrisi
Published: Wednesday, 29 October 2014

Fluorspar has experienced a depressed market, characterised by sluggish demand and low prices in the last two years. Now, the industry is facing a crucial moment with new regulations on refrigerants that could irreversibly affect future consumption. Antonio Torrisi, Reporter, explores the possible consequences for the fluorspar market and the new markets that could help sustain its future demand.

During 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 "winter solstice".

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 markets.

Fluorspar demand

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 pharmaceuticals.

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 (USGS).

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 Mexico.

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).


Global oversupply

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 Data said.

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 properties.

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 refrigerant sector.


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 prices.

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 refrigerant gases.


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 agents.


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 company’s business.


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 prices.


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 sales volumes.

Arkema also posted lower sales in polyvinylidene difluoride (PVDF) due to a 4.1% fall in prices, which offset moderate increases in volume.

Sinochem Lantian

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 portfolio.

Daikin Industries

Japanese fluorochemical producer Daikin Industries, also posted higher sales in its chemicals business unit in 2013, with a 13% increase compared with 2012.

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 China.

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% y-o-y, respectively.

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 China".

AGC Chemicals

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.

Navin Fluorine

The Indian fluorochemical market showed oscillating demand in 2013 with sluggish demand for refrigerants and high consumption of fluoropolymers and inorganic fluorides.

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 2009-2010 levels.

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 ($25m*).

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 pharma industries.

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.


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 2014.

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 producers.

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 2018.

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, Chillventa.

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 2015.

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 CCM.

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 market.

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 India.

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 R-22 refrigerant.

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 MicroMarket Monitor.

However, the region is planning to phase out HCFCs, with a consequent shift of demand to alternative products, including HFOs and natural refrigerants.

The refrigerant market has been traditionally strong in North America, with demand for large-scale air conditioning systems remaining flat, according to Daikin.

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 buildings.


Demand has been impacted by low prices, with some small companies importing low quantities of cheaper products from China, according to IM sources.

"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 refrigeration.

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 fluorspar demand.

Industry players told IM that higher refrigerant demand in the last two years was reported in Latin America, in particular in Brazil.

"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 2009-2012.

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 CO2.

HFOs vs natural refrigerants

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 in Norway.

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, LSBU said.

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.

MicroMarket Monitor 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 for MAC.

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 market.


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 170,000 tpa.

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 efficiency.

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 fluorocarbon coatings.

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 in 2013.

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.

The company’s 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 solar industry.

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 forecast.

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 applications

"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 fluoropolymer sector.

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 photovoltaic.

Inorganic Fluorides

Aluminium fluoride (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 future.

In China, the AlF3 operating rate was kept quite low in 2013, especially in Q3 2013 when AlF3 production decreased to about 27%, CCM said.

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 than 70%.

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 Data.

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 its sales.

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 density.

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 AlF3.

"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," Fluorsid said.

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 solstice"

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 fluorides.

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".

LiPF6 market

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 CCM.

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.

SunSirs, China’s 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 2).

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 2015.


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 Data.

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 of September.

GFL’s managing 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 producers.

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.

Do-Fluoride marketed 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