IOL Fluorochemical Weekly Report: Strong Production and Sales of Refrigerants, Weak Quantity and Price of Fluorinated Polymers

One week market
Refrigerant: Early involution during baseline year, current market is stable and upward
This week, the refrigerant market continued its strong production and sales trend, with product prices rising more and falling less. Market characteristics during the week: The price of R22 for refrigerant use has been raised to 40000 yuan/ton, accelerating the digestion of market inventory. With the industry's crackdown on illegal production increasing, the high price of R22 for ODS use is expected to continue in the second half of the year. The price of fire extinguishing agent product R227EA has recently accelerated to a new high, and the market demand has grown significantly under the stimulation of price increases. On the demand side, as we enter July, the production scale of the air conditioning industry has decreased by more than 20% compared to the previous month, resulting in a decrease in pre-sales demand for refrigerants R32 and R410A; The automotive industry continues to experience strong structural growth and steady overall growth, with a steady increase in demand for R134A. In summary, due to the intense competition in the refrigerant industry during the extreme years (2020-2022), the current supply-demand balance and orderly competition in the benign market continue to show a steady upward trend.

Fluorinated Polymers: Cost Support and Supply Demand Pressure Coexist, Product Price Bottom Standstill
This week, the fluoropolymer market showed the characteristics of "basic cost bottoming out, strengthened resistance to decline, weak supply and weak demand, difficult to change in the short term", and weak quantity and price in all links of the entire industry chain. Market characteristics of the week: On the supply side, overcapacity has led to a decline in factory operating rates, with most factories reducing production and controlling inventory to maintain prices, resulting in a significant extension of inventory turnover days. On the cost side, the prices of basic raw materials have hit bottom, and downstream production and sales have suffered setbacks, further increasing the supply and demand pressure of upstream basic raw materials. Prices of fluorite, hydrogen fluoride, chloroform, and other materials have fallen to near cost levels. Demand side: Traditional industries have weak growth, and emerging fields are difficult to fill the gap. Specifically in the application industry, traditional application industries such as engineering and construction, machinery manufacturing, and coatings have experienced slow growth, and even negative growth; In emerging application fields such as new energy, semiconductors, and high-end manufacturing, although demand has increased, the growth rate is far behind the supply growth rate, making it difficult to reverse the market supply-demand imbalance. Overall, in the short term, the upward support and downward pressure of fluorinated polymer products are basically balanced, and the mainstream product prices are mainly stuck at the bottom.

This Week

01Sanmei Corporation: Net profit for the first half of the year is expected to increase by 147% to 172% year-on-year
On July 11th, Sanmei Corporation announced that it expects to achieve a net profit attributable to shareholders of the listed company of 947.619 million yuan to 1042.381 million yuan in the first half of 2025, an increase of 563.9224 million yuan to 658.6844 million yuan compared to the same period last year, a year-on-year increase of 146.97% to 171.67%. The announcement shows that the growth in performance of Sanmei Corporation is mainly due to the significant year-on-year increase in the average price of fluorine refrigerant products in the first half of 2025, the steady improvement of profitability, and the impact of Sanmei Corporation's non operating profit and loss.

02Hubei Province has discovered medium to large scale fluorite mines, with estimated fluorite resources exceeding one million tons
On July 14th, it was learned that the Second Geological Brigade of Hubei Provincial Geological Bureau discovered fluorite mines in the dense forest of Laifeng, and is expected to submit them to the production area of medium and large-scale fluorite barite mines. The preliminary estimate of fluorite resources is over one million tons. Previously, Laifeng had repeatedly discovered small-scale fluorite mines, which are one of the important mineral resources supporting the development of the local new building materials industry.

03Announcement of Fluorinated Electronic Special Gas Optimization and Transformation Project of Dongyue Subsidiary
On July 14th, the Huantai Branch of Zibo Ecological Environment Bureau accepted and publicly announced the fluorinated electronic special gas optimization and renovation project of Shandong Dongyue Green Cold Technology Co., Ltd. The project is located within the existing southern factory area of the company, with a planned investment of 5 million yuan to construct a 40 ton/year electronic specialty gas production line, including 20 tons/year of electronic grade trifluoromethane and 20 tons/year of electronic grade octafluorocyclobutane. Previously, Shandong Dongyue Green Cold Technology Co., Ltd. relied on its technological accumulation in the field of fluorine chemical industry to invest in the construction of a 40 ton per year fluorine containing electronic special gas material project in April 2023. The project has now been accepted.

04Tianci Material: Signed a 550000 ton electrolyte supply agreement with Chu Neng New Energy
On July 16th, Tianci Materials announced that its wholly-owned subsidiary Jiujiang Tianci High tech Materials Co., Ltd. had signed a "Production Material Procurement Cooperation Agreement" with Wuhan Chuneng New Energy Co., Ltd., Xiaogan Chuneng New Energy Innovation Technology Co., Ltd., and Yichang Chuneng New Energy Innovation Technology Co., Ltd. The agreement stipulates that during the validity period of this agreement (from the effective date of this agreement to December 31, 2030), Jiujiang Tianci is expected to supply a total of no less than 550000 tons of electrolyte series products to Chu Neng New Energy.