Statement by CEO Volker Kappius
After Delacamp AG acquired the Convena Polymers business from Convena GmbH on 1 October 2016, I travelled extensively to better understand the market, our customers and suppliers. At the time of the acquisition, I could not have anticipated the market disruption in fluoropolymers that would occur around the Chinese New Year.
Severe air pollution prompted the Chinese central government to introduce far-reaching environmental and emissions-protection measures across the country’s manufacturing industry, including fluoropolymers and high-performance plastics. Many plants were inspected and some, including well-known manufacturers, were temporarily shut down. In some cases, environmental requirements extended to relocating plants to less densely populated areas. As an initial reaction, prices for polytetrafluoroethylene (PTFE), for example, increased by more than 25%.
Environmental and emissions audits at provincial-government level were under way to monitor compliance, ahead of further central-government audits. The number of supplier and fluoropolymer plants that can continue operating after these audits has a major influence on price developments from May and June onwards.
Capacity losses in China are an important driver of fluoropolymer price increases. The effect is reinforced by high demand for hexafluoropropylene (HFP), used to manufacture the automotive refrigerant tetrafluoropropene (HFO-1234YF, or R1234YF). Strong demand combined with lower capacity drives prices higher, and established fluoropolymer producers have also announced price adjustments. These increases therefore affect more than fluoropolymers from China.
Reliable statements on future fluoropolymer prices and availability can therefore only be made from May or June onwards. These developments principally concern virgin fluoropolymers. Fluoropolymer recyclates may be affected later, if at all, although early market tightening can already be observed. Virgin material remains scarce for the time being.
