Foreword: In the first half of 2026, the price trends for the domestic trade and foreign trade segments of the East China refrigerant market diverged significantly. The market rhythm was jointly driven by multiple factors, including the production scheduling pace of domestic downstream industries, quota supply constraints, geopolitical freight disruptions, and overseas orders. Price elasticity varied notably across different product types, and the price gap between domestic and international markets continued to narrow over the course of the quarter.
In the early months of January and February, the market operated steadily, but the foreign trade sector was first hit by geopolitical shocks. Domestic terminal sectors like home appliances and maintenance channels were in a low production scheduling period for the year. Market circulation focused primarily on signing annual long-term contracts concentrated before the Chinese New Year, with contract prices locked in advance. Combined with strict production volume control by industry enterprises, spot prices for mainstream refrigerants (R32, R125, R134a, R410A) in the East China domestic market fluctuated within a narrow range, maintaining overall stability without significant upward or downward swings. The foreign trade side was first to encounter adverse shocks. At the end of February, geopolitical conflicts in the Strait disrupted international shipping routes and freight timelines, prolonging customer pickups and order delivery cycles. Overseas purchasing sentiment turned cautious, leading to a periodic contraction in export orders and a passive weakening pattern in the foreign trade market. Among these, export quotes for blended refrigerants like R125 and R410A faced notable pressure, and the domestic-foreign trade price spread widened periodically.
In March and April, domestic contract prices saw slight increases, with R22 exhibiting an independent upward trend. Entering the traditional March-April refrigerant restocking season, downstream air conditioner manufacturers and cold chain enterprises gradually initiated stockpiling. Leading companies leveraged their quota oligopoly position to slightly raise long-term contract prices, causing a narrow, stepwise upward trajectory in East China domestic market prices. However, due to terminal equipment production falling short of expectations in the first half and high channel inventory levels, overall market transaction sentiment remained subdued. Price increases for R32, R125, R134a, and R410A were relatively limited. Among subcategories, the second-generation refrigerant R22 (ODS) showed a strong independent trend, becoming the best-performing product in the first half. At the start of the year, R22 had ample support at the bottom due to annual quota reductions and prolonged low-price pressure. As the peak season approached, driven by concentrated stockpiling from downstream cold storage and polyurethane rigid foam sectors, coupled with continuous contraction in existing supply, spot prices experienced sustained recovery and upward movement, with gains significantly exceeding those of mainstream third-generation HFCs. On the foreign trade front, freight disruptions had not fully dissipated, overseas purchasing activity remained weak, and the recovery in foreign trade prices lagged notably behind the domestic market.
In May and June, channel destocking pushed spot prices higher, while recovering overseas orders strengthened international prices. Domestic traders and maintenance shop channels initiated concentrated destocking operations. Downstream sectors purchased essential goods as needed on demand, tightening spot market circulation. Combined with leading companies implementing volume control and price support strategies, forward contract prices for the third quarter successively broke through new highs for the first half. Spot prices rose in tandem with contracts, the spread between spot and long-term contracts continued to narrow, and market price linkage significantly strengthened. On the overseas front, geopolitical freight disruptions gradually eased, and the international circulation environment stabilized. Simultaneously, European import stimulus policies for air conditioners, including an additional procurement demand of 30,000 units, triggered concentrated refrigerant replenishment orders from overseas manufacturers. Transaction activity in the foreign trade market rebounded sharply, leading to sustained stepwise increases in international prices. As evident from the trend charts, foreign trade quotes for R32, R134a, R410A, and R125 had been rising continuously since March, with the recovery magnitude far exceeding the earlier part of the first half. The rebound in overseas demand became the core driving force behind the surge in international prices.
The cost transmission logic within the fluorinated refrigerant industry weakened significantly. Fluctuations in upstream raw material prices could not be smoothly passed down to downstream refrigerant products, leading to severe profit divergence among raw material producers. Simultaneously, downstream home air conditioner production scheduling dropped sharply, suppressing demand. However, supported by rigid HFC quota supply constraints, the core product R32 developed an independent upward price trend, forming an inverse divergence pattern between supply-demand dynamics and costs.
Categories with positive profit growth: Only two raw materials, TCE and HF, achieved year-on-year profit increases. The TCE price rose 3%, with profit increasing by 760 RMB/ton year-on-year. HF saw a substantial price increase of 17% during the year, with profit expanding by 836 RMB/ton. Hydrofluoric acid formed strong cost support due to strategic mineral control of fluorspar and tight supply, becoming the core raw material with the largest profit gains upstream in the first half.
Categories with deep losses: TCM and PCE profits declined sharply. TCM prices fell 11% year-on-year, with profit decreasing by 402 RMB/ton. PCE dropped significantly by 23%, with profit shrinking by 1,186 RMB/ton. Weak market demand dragged raw material prices lower, widening production losses.
Special divergent category DCM: The DCM price rose slightly by 3%, but the raw material price increase was entirely insufficient to cover plant production and raw material procurement costs. Industry profit still fell by 222 RMB/ton year-on-year, presenting a unique scenario of "price up, profit down." Overall, most upstream basic chemical raw materials faced profit pressure. Refrigerant producers encountered rigidly rising raw material procurement costs, but downstream refrigerants, constrained by demand, could not simultaneously raise selling prices. The cost downstream transmission channel was blocked, compressing the overall processing profit of the refrigerant industry.
From January to June 2026, home air conditioner production scheduling data all showed year-on-year declines, directly dragging down refrigerant filling demand. The industry's demand fundamentals weakened: total home AC production in the first half reached 110.17 million units, a sharp year-on-year drop of 14.75%. Among this, domestic sales production was 60 million units, down 13.93% year-on-year, reflecting sluggish domestic terminal retail and home cooling demand. Export production reached 50.16 million units, a year-on-year decline of 10.28%, pressured by geopolitical factors and overseas competitor impact on foreign equipment orders. Breaking down the monthly rhythm, January-February was the traditional low season with low production base volumes. March-May entered the cooling peak season, with production scale temporarily surging, but the monthly increase in domestic sales production was limited. By June, the industry entered the off-season earlier, with equipment production declining notably. The contraction in equipment plant operations directly led to a continuous drop in R32 and R410A refrigerant filling volumes for new units, a core reason why the refrigerant quota consumption progress in the first half lagged behind the same period last year.
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