In 2024, 3M will completely withdraw from the PFAS business, and the global fluorinated surfactant supply chain will be restructured

In June 2024, global chemical giant 3M officially announced that it would completely cease the production and sale of all PFAS (perfluorinated/polyfluoroalkyl substances) by the end of 2025, withdraw from the full range of PFAS businesses including fluorinated surfactants and fluorinated liquids, and will not provide similar alternative products to the market. After the news was released, the global fluorinated surfactant market was in turmoil. The core chain of the global supply chain, which had lasted for over 60 years, suddenly broke, triggering a deep reconstruction of the industry regarding supply security, price trends and industrial patterns.

3M, as the inventor and leading enterprise of fluorinated surfactants worldwide, holds over 40% of the high-end market share. Its products, with their ultimate performance, are widely used in ";bottleneck" fields such as semiconductor cleaning, electronic photoresist, high-end coatings, and fire-fighting foam. It is a core supplier for over 80% of the world's high-end manufacturing industries. This complete withdrawal is attributed to the increasingly strict global environmental regulations on PFAS and the huge pressure of litigation compensation. In 2024, 3M's cumulative settlement payments due to PFAS environmental pollution lawsuits exceeded 2.8 billion US dollars. Compliance costs and operational risks continued to rise, and it ultimately chose to completely divest its business.

3M's withdrawal directly led to an expansion of the global supply gap for high-end fluorinated surfactants. From 2024 to 2025, the global annual demand for high-end fluorinated surfactants will reach 52,000 tons, with 3M accounting for 38% of the supply. In the short term, no enterprise can fully fill the gap. As a result, the global price of high-end fluorinated surfactants is expected to rise by 35% to 60% in the second half of 2024. Downstream industries such as semiconductors and new energy are facing the risk of ";supply disruption";, accelerating the process of supply chain diversification and domestic substitution.

As the world's largest market for fluorinated surfactants, China is presented with a crucial opportunity in this transformation. For a long time, 90% of high-end fluorinated surfactants in China have relied on imports, with foreign enterprises such as 3M, Chemours and Asahi Glass monopolizing the market. After 3M's withdrawal, leading domestic enterprises responded promptly, intensifying technological research and development and capacity expansion, focusing on breakthroughs in high-end fluorinated surfactants for electronic and new energy grades. In 2024, several domestic enterprises completed mass production of electronic-grade fluorinated surface active materials with a purity of 99.99%, successfully passing certifications from manufacturers such as TSMC and SMIC, and entering the high-end semiconductor supply chain.

Meanwhile, the industry is accelerating technological iteration, and alternative technologies such as short-chain C6 fluorinated surfactants and environmentally friendly fluorinated polyether surfactants are maturing rapidly. In 2024, the domestic production capacity of short-chain fluorinated surfactants will increase by 42% year-on-year. The product performance will approach international standards, and the cost will be 25% to 30% lower than that of imported products, gradually replacing the mid-to-high-end market. In addition, the enterprise has accelerated its global layout, expanding into the markets of Europe, North America and Southeast Asia through overseas factory construction, mergers and acquisitions, and other means, filling the market gap left by 3M's withdrawal.

3M's withdrawal from the PFAS business is an epoch-making event in the global fluorine chemical industry, marking the end of the era of "foreign monopoly on the high-end market"; and the entry of the global fluorinated surfactant industry into a new stage of "multiple strong players standing side by side and domestic products rising";. For domestic enterprises, this is not only a golden window period to seize the high-end market, but also a comprehensive test of their technological and compliance capabilities. As an enterprise deeply engaged in the field of fluorinated surfactants, we have completed the full range layout of high-end products. Electronic-grade, new energy-grade and environmentally friendly fluorinated surfactants have achieved large-scale production. With stable supply, excellent performance and high cost performance, we have become the preferred partner of global customers and are contributing to the transformation of China's fluorine chemical industry from a "major country"; to a "powerful country".