Review of Refrigerant Price Trends over The Past Five Years

Refrigerants: Prices are rising and the industry is booming

In 2020, affected by the impact of COVID-19 and the quota competition caused by the Kigali Amendment, the third-generation refrigerant market continued the weak trend at the end of 2019, and the prices of various products declined. The raw material hydrofluoric acid continued to fall during the epidemic, reaching the lowest point of the year in May 2020 and then rebounded to stabilize. The overcapacity of R32 is still continuing, and the upward price is limited; the price of R134a has reached a new historical low in recent years. The production and sales of downstream air-conditioning and automobile industries both declined in 2020.

In the first half of 2021, except for R32, whose price is still hovering below the cost line, the prices of other refrigerants have rebounded. As of June 30, 2021, R22 increased by about 14.3% from the beginning of the year, R134a increased by about 13.9% from the beginning of the year, R125 increased by about 11.5% from the beginning of the year, R32 decreased by about 4.0% from the beginning of the year, and R410a increased by about 17.6% from the beginning of the year. In August 2021, with the continued rise in prices of raw materials such as hydrofluoric acid, methane chloride, and ethane chloride, and the insufficient operating rate of refrigerants due to dual control of energy consumption and power restrictions, and the background of refrigerants on the demand side entering the traditional stocking peak season, the prices of refrigerant products have rebounded significantly, and the price increase trend will continue until early November 2021. Subsequently, since November 2021, with the gradual release of supply on the raw material side, refrigerant prices have generally begun to fall back.

In 2022, refrigerant prices gradually entered a downward channel. In the first three quarters of 2023, the price changes of refrigerant products were differentiated: R125 prices continued to fall following the raw material perchloroethylene, R32 prices fluctuated at a medium-low level, and R134 prices first fell and then rose. In the fourth quarter of 2023, as the traditional peak season for refrigerant stocking, low inventory of enterprises and markets in the early stage, and the expected details of the quota plan were implemented, the overall refrigerant prices, led by R143a and its related mixed refrigerants, rebounded rapidly.

Entering 2024, with the implementation of the quota details plan, coupled with the beautiful performance of air-conditioning production data, some enterprises stopped production for maintenance, and refrigerants continued the upward trend of prosperity. In January and February, refrigerant prices rose steadily earlier/in advance than in previous years. The refrigerant varieties with the most obvious price increases in March were R32 and R410a, with monthly increases of 14% and 9% month-on-month. The refrigerant varieties with rising prices in April and May were mainly R22. From June to August, the prices of R22 and R32 products remained relatively stable. As the demand for air conditioners gradually entered the off-season, the demand for R410a gradually entered a low level, and the demand for R125 decreased, the price gradually decreased. Since September, some R32 units have entered the maintenance period, and product prices have continued to rise. The downstream demand for R134a has been stable. As the willingness of enterprises to maintain prices has gradually increased, some rigid orders in the trade market have been stimulated to replenish stocks at low prices, and prices have continued to rise. At the end of the year, the remaining quotas of enterprises are limited. The maintenance area of the industry has expanded in December, and the atmosphere of tight supply continues to spread. On the demand side, air conditioner production has maintained double-digit growth at the end of the year. Against the background of reduced supply and increased demand, the price of the refrigerant market has once again entered a growth stage.

According to Fluorine Service Online, as of December 30, the market price of R22 was 32,000-33,000 yuan/ton; the market price of R125 was 42,000-43,000 yuan/ton; the market price of R134a was around 41,000-43,500 yuan/ton; and the retail price of R32 was 41,000-42,000 yuan/ton. The execution of long orders in the refrigerant market has begun to be implemented recently. Quarterly orders are expected to rise to 41,000 yuan/ton and 42,000 yuan/ton for R32 and R410a, respectively. The leading companies have made a small profit of 200 yuan/ton. There has been no new changes in the retail order quotations. As the traditional Spring Festival approaches, market demand has weakened and the inquiry atmosphere has cooled down. At the end of the year, domestic refrigerant manufacturers were operating at a low level, and large-scale shutdowns and maintenance were common; the quota inventory of mainstream manufacturers was low, and the refrigerant market price was gradually consolidated under the boost of corporate voice. It will take time for the current market transactions to be further implemented in the short term, but the long-term upward trend remains unchanged. In terms of demand, the production schedule of air-conditioning companies continued to increase year-on-year in the first quarter, and domestic sales data tended to be stable, but exports continued to grow. The overseas bases of major home appliance companies are expected to gradually release production in 2025. It is expected that overseas demand will continue to rise by then, and the refrigerant export market will continue to improve.