In 2024, Solvay's fluorine chemical plant in France will be shut down, leading to a tight global supply of raw materials for fluorinated surfactants

On September 24, 2024, Solvay, a global fluorine chemical giant, issued an announcement: After consultation with the trade union, it has decided to cease the production of TFA (trifluoroacetic acid) and its fluorinated derivatives at its Salindres plant in France. The shutdown is expected to be completed by October 2025, with an estimated layoff of 68 employees. This move has triggered a global supply crisis of core raw materials for fluorinated surfactants, causing fluctuations in the upstream of the industry's industrial chain. Price hikes and tight supply have become the key words of the year.

The Salindres plant is a global core fluorinated fine chemical production base with a history of over 40 years. It produces more than 12,000 tons of products such as TFA and fluorinated surfactant intermediates annually, accounting for 22% of the global high-end fluorinated chemical intermediate market share. The perfluorohexyl ethyl sulfonic acid and perfluorooctanoic acid derivatives it produces are core raw materials for high-end fluorinated surfactants, widely supplied to global leading enterprises such as BASF, Clariant and Asahi Glass, and are also the main source of imported raw materials for high-end fluorinated surfactants in China.

The main reasons for the shutdown are long-term operating losses and environmental protection pressure. Due to the strict regulation of the EU's PFAS, intensified market competition and rising raw material costs, the Salindres plant has suffered losses for five consecutive years. In the third quarter of 2024, a provision of 50 million euros was made for shutdown. In addition, in 2023, Solvay USA paid $175 million in compensation for PFAS pollution. The continuous rise in environmental compliance costs has accelerated the decision to shut down factories.

The shutdown of the facility has directly impacted the global supply chain of fluorinated surfactants. In the fourth quarter of 2024, the prices of core raw materials such as TFA and perfluoroalkyl sulfonyl fluoride soared by 40% to 70%. Due to raw material shortages, many global fluorinated surfactant enterprises reduced production, and the delivery cycle of some high-end products was extended from two weeks to eight weeks. The downstream industries such as electronics, coatings and textiles have been affected by the chain reaction, restricting the production of high-end products and intensifying the imbalance between supply and demand in the market.

Facing the supply crisis, the global industry is accelerating its "self-rescue"; efforts. On the one hand, leading enterprises have initiated emergency plans to expand raw material production capacity in the United States and Asia. Basf, Chemours and others are accelerating the expansion of intermediate production capacity at their bases in the United States and China. By the end of 2024, the new capacity will reach 8,000 tons per year, alleviating some supply pressure. On the other hand, domestic enterprises have been accelerating the breakthrough of raw material autonomy. For a long time, 65% of high-end raw materials for fluorinated surfactants in China have relied on imports. The shutdown of Solvay has forced the industry to intensify upstream technological research and development. In 2024, several domestic enterprises will achieve independent mass production of perfluorohexyl ethyl sulfonic acid and short-chain fluorine intermediates, with a purity of 99.5%, filling the domestic gap and reducing costs by 30% compared to imports.

Meanwhile, the industry is accelerating the integration of its industrial chain, and the integration of "raw materials - intermediates - finished products" has become a trend. Leading domestic fluorinated surfactant enterprises have extended their industrial chains of fluorite, anhydrous hydrogen fluoride and fluorine fine intermediates upward through mergers and acquisitions, self-construction and other means, building a full-chain system of "resources - raw materials - products - applications";, and enhancing the stability and cost advantage of the supply chain. In 2024, domestic investment in integrated fluorine chemical projects will exceed 6 billion yuan, and multiple high-end fluorine intermediate projects with an annual production capacity of 10,000 tons will commence construction.

The shutdown of Solvay's plant in France is a microcosm of the global fluorine chemical industry's landscape adjustment, highlighting the importance of supply chain security. Against the backdrop of increasingly strict environmental protection regulations and market fluctuations, mastering upstream resources and achieving a full industrial chain layout have become the core competitiveness of enterprises. As a professional enterprise of fluorinated surfactants, we have established a complete upstream supply chain system. The self-sufficiency rate of core raw materials exceeds 85%. Through technological innovation and industrial chain integration, we ensure stable supply and support the steady development of downstream industries, enabling us to move forward steadily in the face of global industry changes.