[Yangtze River Chemicals] Fluorochemical Update Recommendation: Long-Term Trend for Refrigerants Upward, Fluoropolymer Materials Poised to Take Off, Highly Cost-Effective Allocation

English summary

In the first half of this year, refrigerants underwent a stress test on the demand side: 1) Poor performance in air conditioning and automotive end-markets; 2) Export declines due to the strait blockade; 3) Overseas destocking. Under these conditions, R22, R32, R134a, and R124 rose by 43.8%, 2.4%, 10.3%, and 14.6%, respectively, mainly due to normal annual growth in the maintenance market and high industry concentration. At the same time, companies significantly raised long-term contract prices for R32 in Q3, further demonstrating the industry's strong pricing power. Looking ahead, inventories are at low levels, and El Niño brings hot weather, so demand is expected to recover on the margin in the short term. In the long run, further reductions in refrigerant quotas in 2029 are expected to accelerate the upward price slope. Fluorochemical materials are used in semiconductor and AI applications. Earlier, due to the tech rally, some of these materials have fallen back to their starting levels, offering extremely high cost-effectiveness. These include PFA for conveying wet electronic chemicals in semiconductors, semiconductor cooling fluids (perfluoroamine/perfluoropolyether) that control temperature in processes such as etching, electronic-grade hydrofluoric acid, and polytetrafluoroethylene (PTFE) for M10 board testing. ...