Project Blue's Fluorspar Market Service explores a critical supply chain for energy transition

Project Blue's Fluorspar Market Service explores a critical supply chain for energy transition

Project Blue’s Fluorspar Market Service investigates the impact of climate change and energy transition on fluorochemicals, the major growth market for the industry.

Blue View

Fluorspar was one of the earliest minerals to feel the effects of legislation on climate change over 40 years ago, and fluorine markets have since been continually adapting to produce ever safer chemicals to use with respect to the destruction of the ozone layer and global climate safety. This has seen the fluorine chemicals industry transition from chlorofluorocarbons (CFCs), through hydrochlorofluorocarbons (HCFCs), to hydrofluorocarbons (HFCs), always pushing forward with alternative fluorochemicals to solve thermal management problems using fluorine.

The latest low GWP (global warming potential) fluorochemicals are based on hydrogenated fluorinated olefins (HFOs), which have a zero ODP (ozone depletion potential), and HFC’s are due to be phased out entirely by 2030. For the fluorspar market, the entire evolution has relied on fluorine as a key component and demand has been buoyed by replacement activity on top of baseline growth.

Electric vehicles (EVs) and the use of Li-ion batteries have created a new demand for hydrofluoric acid (HF), and subsequently fluorspar as a source of fluorine. HF is an essential feedstock for lithium hexafluorophosphate (LiPF6) and lithium bis(fluorosulfonyl)imide (LiFSl) electrolytes and polyvinylidene fluoride (PVDF) used as binders, all important components of Li-ion batteries. In addition, HF is used in natural flake graphite processing to produce a spherical graphite material, essential for manufacturing the current anode of lithium-ion batteries. Both applications have created a compounded new demand that has been steadily growing over the last five years and is set to grow more rapidly in future.

Supply chains of fluorspar can be split between metspar (metallurgical-grade) and acidspar (acid-grade), with independent demand drivers. The main market driver for metspar is the steel industry, and despite slowing growth from steel in China, the sector is set to face a tightening supply-demand balance.

Most of the growth in supply is expected for acidspar, which has gone through rigorous environmental inspections in China that tightened supply in 2017. China has increased its downstream market share for fluorochemicals, especially for HF where the country is estimated to hold over two-thirds of capacity. The medium-term outlook of acidspar market balance depends on new supply coming on stream in South Africa, China and the financial repositioning and restart of the Newfoundland operation in Canada. If any of these are not on stream as predicted the supply/demand balance could reach a tipping point.

  • 15 Nov 2022
  • Fluorine

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