Chemours Begins Producing 1234yf in Texas

It was announced today via press release from the Chemours company that their new plant located in Ingleside, Texas (Outside of Corpus Christi) is now manufacturing R-1234yf refrigerant. This factory is by far one of the largest and now that it is live the capacity of HFO-1234yf being produced in the world has tripled.

Today the overall demand for 1234yf is still quite low in the United States. In the European Union volume is beginning to pick up due to their mandatory phase out of R-134a. While there are automotive manufacturers here in the US that are switching their vehicles over to yf it is not yet mandatory. Because of this, we are seeing a slow transition cycle.

Along with the slow change over we also have to keep in mind that if a new vehicle with 1234yf rolls off the floor today that same vehicle may not need an air conditioning repair for another four years. The standard amount of time for a new vehicle to need air conditioning repair is between five to six years. So, even though we had a lot of manufacturers and models switch to yf in 2015 we are still a ways out before the demand of yf is heightened due to automotive repairs.

The good news here though is that with this new plant live and producing yf here in the United States we should begin to see the price dip. Yf still continues to be one of the most expensive modern day refrigerants on the market place. Today it ranges between sixty to seventy dollars a pound. (R-134a is about three dollars a pound.) With the increased supply coming into the market we may begin to see this price drop. Well, at least until the demand starts to climb, then we could see prices level back out.

While we mostly know R-1234yf as the new automotive refrigerant it is also important to note that it is used in other various HFO refrigerant blends such as R-455A and R-513A. As more HFOs are developed in the future we may begin to see the versatility of yf expand. If this happens then we could see another effect on the overall demand of the refrigerant. Regardless of the other application market, we can all be certain that the automotive demand is more then enough to satisfy the needs of this production plant.

In my opinion the launching of production of yf at this plant was a bit too early. Now, I didn’t find anything that specifically said that Chemours was going to be producing at maximum capacity or if they were going to slowly start production to meet market needs. I am assuming that they are going to start slow and adjust as the market requires. Either way though, I just don’t see the demand yet. Perhaps Chemours is preparing for the future but if you ask me I would say we are still a few years out before we really see the demand for 1234yf pick up.

Conclusion

In the short term, a savvy investor may have an opportunity if the prices of 1234yf begin to drop due to oversupply. One could wait for the price to bottom out, buy up a few pallets, and then sit on it and wait for the prices to climb.┬áRemember though folks, it’s always a gamble. If the prices do fall whose to say that they’ll go back up? We could be looking at a new normal price point wise on yf with this new plant.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Sources

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