Recently, the chemical market has been on edge after a 11% surge in just seven days. According to reports from industry insiders, the upward trend in inorganic products has been gaining momentum since last week, with two key sectors standing out: the fluorine chemicals and salt-alkali industries.
The fluorine sector experienced a strong rebound, with key products like dry aluminum fluoride, hydrofluoric acid, and fluorspar rising by between 0.31% and 2%. The overall fluorine index climbed from a low of 630 to over 640, marking a 2% recovery in just one month. Industry analyst Zhang Ming explained that environmental policies have significantly impacted the fluorine industry. The Ministry of Environmental Protection and the World Bank recently announced a phase-out plan for China's HCFCs (hydrochlorofluorocarbons) production, aiming to protect the atmosphere by drastically limiting the production of fluorinated refrigerants. This shift is likely to benefit larger, more established companies.
According to the schedule set by the Ministry of Environmental Protection, China’s HCFCs production should be frozen at the average level of 2009–2010 by the end of this year. By 2015, it will be reduced by 10%, followed by cuts of 35% by 2020 and 67.5% by 2025. The goal is complete elimination by 2030. As these restrictions take effect, the market is expected to open up for HFCs (hydrofluorocarbons), which are considered cleaner alternatives. In 2012 alone, China produced over 450,000 tons of HCFCs, accounting for nearly 79% of global production. With the reduction plan in motion, new refrigerant markets are anticipated to grow significantly, with an estimated 30% expansion in the first phase.
Companies like Juhua Co., Ltd. and San Aifu are adapting by adopting a “two-leg†strategy—expanding into new refrigerants while also building a more environmentally friendly fluorine chemical supply chain.
Meanwhile, the salt-alkali industry has seen a sharp rise in prices across multiple products, including crude salt, caustic soda, soda ash, and hydrochloric acid. Hydrochloric acid led the charge with an 11% increase. Analyst Zhang Ming noted that the price climb was driven by two main factors: a drop in northern sea salt production due to colder temperatures, and strong demand from the caustic soda and soda industries. The imbalance between supply and demand has acted as a catalyst for the recent price surge.
Currently, there is limited stock available, and sales remain robust. For example, on October 21, Shanxi Lushe Chemical reported that its synthetic ** plant was operating normally, producing about 100 tons per day at a price range of RMB 200–300 per ton. The ** market in Shandong remains stable, with 31% synthetic acid priced around RMB 200 per ton and strong downstream demand.
Zhang Ming added that after a turbulent pullback last week, some of the speculative bubbles from the third quarter were gradually being squeezed out. This is a normal market adjustment, with inorganic products once again leading the way, largely due to supply-demand imbalances. Unlike previous price surges driven by policy changes, this time the movement is primarily driven by market fundamentals.
Organic chemical products are also seeing some activity. Major manufacturers have been undergoing maintenance, such as Gaoqiao Petrochemical’s 200,000-ton/year phenolic ketone plant and Yangzhou Jianye Group’s 320,000-ton/year facility, both of which were shut down for repairs. Meanwhile, increased demand from downstream pesticide plants has boosted the demand for **, making it one of the most stable products this quarter.
As more products see price increases, some previously declining items are beginning to show signs of recovery. However, the market still faces challenges, with shrinking downstream demand being a major factor. For instance, calcium carbide prices fell last week due to weaker demand from PVC and trichloroethylene producers. Crude benzene, which had been a top performer earlier in the year, saw a decline as many benzene processing plants in Shandong went offline. Similarly, glyphosate, which was closely watched by investors, also started to fall as international and domestic demand entered off-season.
Looking ahead, Zhang Ming believes that while the second and third quarters were dominated by oil price fluctuations, the fourth quarter will focus more on policy shifts, external factors, and short-term domestic supply and demand dynamics. Inorganic products are expected to attract more attention. Overall, the chemical market is likely to enter a weak consolidation phase, with lower trading activity before mid-November.High Mast Lighting Pole With Lifting System
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