February 2 News: On January 30, the first environmental impact assessment (EIA) public notice for the high-end fluoromaterial integrated project of Hubei Yihua Chemical Industry Group Co., Ltd. was released by the Yichang Municipal Ecology and Environment Bureau. The project involves the construction of production facilities with annual capacities of 75,000 tons of difluorochloromethane (R22), 40,000 tons of tetrafluoroethylene (TFE), 10,000 tons of polytetrafluoroethylene (PTFE), 2,000 tons of soluble polytetrafluoroethylene, 22,000 tons of hexafluoropropylene (HFP), 5,000 tons of fluorinated coolant, 10,000 tons of perfluorohexanone, 61,000 tons of tetrachloropropane, 72,000 tons of pentachloropropane, 55,000 tons of tetrachloropropene, 30,000 tons of tetrafluoropropene, 4,500 tons of trifluorotrichloroethane, 2,500 tons of chlorotrifluoroethylene, 500 tons of hexafluorobutadiene, 800 tons of difluorodiphenylmethanone, 1,000 tons of polyetheretherketone (PEEK), and 100,000 tons of calcium chloride dihydrate, along with supporting public and auxiliary facilities. The project is scheduled to commence construction in December 2026. **Chempricehub Analysis:** **Difluorochloromethane (R22):** Bull-Bear Score: -1.5 The project plans to construct a new 75,000-ton R22 production unit, significantly exceeding the current industry's average annual demand growth rate of 2%-3%. Long-term capacity expansion will exacerbate the oversupply situation in the refrigerant market, limiting the upside potential for spot prices. Considering the current high inventory levels in the industry, sustained price pressure on R22 spot prices is anticipated. **Polytetrafluoroethylene (PTFE):** Bull-Bear Score: -1 The commissioning of 10,000 tons of new PTFE capacity will alter the supply-demand balance. With the current PTFE industry operating rate below 70%, the additional supply may trigger price competition. Given the project's construction timeline extending beyond 2026, the short-term impact is limited. However, it is bearish for spot prices in the medium to long term, particularly suppressing premium pricing for high-end products. **Hexafluoropropylene (HFP):** Bull-Bear Score: -1 The planned 22,000-ton HFP unit capacity represents approximately 15% of China's current total capacity. As a key raw material for fluoropolymers, this capacity expansion could weaken bargaining power within the industrial chain. Coupled with the simultaneous increase in supporting tetrafluoroethylene (raw material) capacity, cost support is diminished. These dual factors are bearish for HFP spot prices. **Polyvinyl Chloride (PVC):** Bull-Bear Score: 0.5 The project's supporting 100,000-ton calcium chloride dihydrate unit will utilize by-product hydrochloric acid from chlor-alkali production, reducing solid waste disposal costs for PVC manufacturers. Combined with today's PVC main contract 2605 settlement price of 5,056 CNY/ton (+57 CNY) and the market activity reflected by an open interest of 1.02 million tons, the expectation of cost-side improvement provides slight support for futures prices.