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Chinese Fluorochemicals Industry Still High Note of Global Fluorspar Market
China's escalating domestic consumption and increased exports of fluorochemicals continue to be the leading drivers of growth in the global fluorspar sector, despite concerns of a slowdown in the world's second-largest economy.
The latest industry data from Roskill shows that Chinese production and consumption of acid-grade fluorspar continued to ramp up in 2014, fuelling the country's hydrogen fluoride (HF) and aluminium fluoride (AlF3) production for domestic and export markets alike.
Fluorspar production from China rose by 100,000t in 2014, entirely accounted for by acid-grade material. Acidspar consumption rose by 150,000t, while metspar use was stable.
Chinese HF output is also feeding into greater domestic output of fluorocarbons, used in applications such as refrigerants and fluoropolymers, according to Roskill's new Fluorspar Industry Briefing. Aluminium fluoride use is being driven by China's massive primary aluminium sector.
For some newer fluorocarbons, however, China is still reliant on imports from Western Europe, North America and Japan- particularly for its white goods sector.
The fluorochemical export picture indicates that China is increasing its dominance in the downstream supply chain too. While Chinese acidspar exports fell slightly in 2014, shipments of HF rose to nearly 230,000t while AlF3 exports surged to 165,000t.
China's AlF3 output has risen steadily in recent years in tandem with its growing aluminium sector. However, the industry is currently in a state of acute overcapacity and with excess output, which has depressed prices significantly from US$1,421/t FOB China in 2012, to US$1,116/t FOB China in 2014.
Chinese economic uncertainty?
The country faces new economic challenges as tighter monetary policy and decreased access to credit have started to affect domestic companies.
In addition, the Chinese economy is transitioning from being investment-driven to consumer-driven, and the government is introducing increasingly stringent regulatory targets to address environmental issues.
Concerns remain that the Chinese economy may dip below 7% growth in 2015, but these worries may be partially alleviated by a US$1.1 trillion stimulus package aimed at supporting some 300 infrastructural problems.
Such measures are likely to aid the country's steel, aluminium and fluorocarbon sectors, all key consumers of fluorspar. It appears that for the short-term, China will continue to drive overall trends in the global fluorspar sector.
Roskill's new Fluorspar Industry Briefing is published biannually in March and August every year to capture market trends of the last six months, and includes the last three full years of historical data. . It is the ONLY source of global fluorspar information, updated to the latest six month period that includes fluorspar, HF and AlF3 supply, consumption, trade and prices.
The industry briefing also provides the latest news, market commentary, market outlook, industry interview, and a two-year price forecast for acidspar, HF and AlF3. Annual subscription price is £1,995, two issues per year.
Subscribe now to receive the March 2015 issue including historical data from H1 2012 to H2 2014, with demand forecasts to 2015 and price outlooks to 2016.