Views: 0 Author: Site Editor Publish Time: 2026-10-23 Origin: Site
The price of refrigerant gases in China is primarily driven by a rigid supply constraint imposed by environmental quotas, rather than by raw material costs or free-market production capacity. This policy-driven scarcity interacts with steady and expanding downstream demand, creating a persistent supply-demand tight balance that keeps prices elevated.
The most decisive factor is China's implementation of the HFCs production quota system under the Kigali Amendment to the Montreal Protocol. This caps total output, preventing companies from expanding production even if they have the physical capacity.
Strict Total Cap: The 2026 national production quota for third-generation refrigerants (HFCs) is set at approximately 797,800 tons, a minimal increase from the previous year. This ceiling is rigid and designed to freeze production at baseline levels.
Extreme Market Concentration: The quota allocation is highly concentrated. The top six producers (CR6) hold about 90% of the total quota. Leaders like Juhua Group alone control nearly 38% of the national quota. This concentration gives major producers significant pricing power and the ability to stabilize or raise prices.
Phase-out of Older Gases: The ongoing reduction and phase-out of second-generation refrigerants (HCFCs), such as R22, further tightens the overall supply of available refrigerants, pushing demand toward the already constrained third-generation products.
While supply is capped, demand continues to rise from traditional and emerging sectors.
Traditional Cooling Demand: Air conditioning remains the largest consumer, particularly during the summer peak season. High temperatures directly drive up the need for refrigerants for both new units and maintenance.
New Energy Vehicles (NEVs): This is a significant new growth driver. NEVs, especially those with heat pump systems, use a substantially higher amount of refrigerant per vehicle compared to traditional fuel cars. The rapid growth of China's NEV market directly boosts demand for R134a and newer refrigerants.
Cold Chain Logistics: The expanding cold chain logistics sector for food and pharmaceuticals requires substantial refrigeration capacity, creating steady incremental demand for refrigerants.
Limited Cost Pass-Through: Interestingly, raw material costs (like fluorspar) have not been the main driver recently. Due to the quota system, refrigerant producers have strong pricing power and do not need to adjust prices in lockstep with raw material fluctuations, maintaining high profit margins.
Export Market Dynamics: China is a major global supplier. Demand and pricing in overseas markets, especially in regions facing their own quota constraints (like the Middle East), can influence domestic pricing strategies. Significant price differences between domestic and export markets can affect how producers allocate their quota between domestic sales and exports.
In summary, the price of refrigerant gases in China is fundamentally a policy-driven market. The government-mandated production ceiling creates an artificial scarcity, while genuine demand growth from air conditioning, electric vehicles, and cold chains ensures that this limited supply is eagerly consumed, keeping prices at a high level.
