[Lead]: In the first half of 2026, the supply side of fluorinated refrigerants maintained a tight-balance pattern. However, affected by the blockade of the Strait of Hormuz at the end of February, export market shipments were constrained, leading to a continuous decline in capacity utilization and export volumes later in the period. End-user demand was front-loaded in the first half, and combined with heightened geopolitical tensions, market quotations remained firm. Once the traditional peak-season demand materialized, prices entered a sustained upward channel.
I. Spot price trends and spot-futures price spread for fluorinated refrigerants
From January to February, the fluorinated refrigerant market was relatively stable, influenced by low initial production schedules from downstream users and centralized contract procurement pricing around the holidays. At the end of February, international freight obstacles triggered by the Strait incident led to a prolonged passive export situation for the fluorinated refrigerant foreign trade market. From March to April, contract pricing in the East China market edged up within a narrow range, and the overall market behavior remained cautious. In comparison, R22 (ODS) performed notably well, primarily because its earlier prices were at a low level, leaving significant room for upward correction driven by concentrated pre-season stocking. During May and June, channel players generally actively sold off inventory. Third-quarter pricing broke through to new highs, narrowing the gap between spot and contract prices. Coupled with a stable international environment and the stimulus from European imports of 30,000 air conditioners, the foreign trade market began to trade, exerting some upward pull on export prices.
II. Changes in fluorinated refrigerant supply in the first half
From January to February, fluorinated refrigerant production followed the plan. Capacity utilization was slightly lower year-on-year, but output exceeded the same period in 2025. Starting in March, supply increased slightly with the onset of the traditional peak season. However, due to uncertainties surrounding the geopolitical situation, companies were limited in raising production loads. Horizontally, the peak operating rate for the fluorinated refrigerant industry in 2026 was 60% in March (down 1 percentage point year-on-year from 2025). After the first half ended, quota consumption in H1 2026 was down 1 percentage point year-on-year. Among products, the consumption progress of certain specifications (e.g., R32 and R125) was slightly below average, mainly because of a sharp decline in demand-side production schedules, with reduced blending of R410A further lowering new-unit charging at OEMs.
Driven by the rise in fluorinated refrigerant prices, costs became relatively decoupled. Observing the monthly profit and capacity utilization comparison chart for R32 in China from 2025 to 2026, profits for R32 remained high throughout H1 2026. In contrast, in 2025, R32 profits rose steadily, with a significant acceleration in March, as reflected by the steeper slope. This corroborates that R32 prices remained relatively "calm" in the early part of 2026. Looking at capacity utilization, it declined in both 2025 and H1 2026, but the decline was steeper in 2026. In 2025, supply tightening and the strategy of controlling volumes to support prices resulted in a steeper profit slope. The low operating rates in 2026 were more a reflection of a "price-support" strategy amid air conditioner production cuts.
The cost relationship weakened. From the chart, in H1 2026, only TCE and HF saw positive price-profit growth, while TCM and PCE experienced negative growth. More notably, DCM prices increased slightly, but the increase was insufficient to cover production costs, and industry profits continued to decline, down by 222 RMB/ton year-on-year.
III. Changes in fluorinated refrigerant consumption in the first half
In H1 2026 (up to May 2026), exports of fluorinated refrigerant R32 totaled 9,814.655 tons (down 52.26% year-on-year), with an average export price of 8,519.768 USD/ton (up 50.63% year-on-year). From January to May, exports of R32 (including blends and single-component refrigerants) accounted for 19% of the export quota (down 11% year-on-year). From January to June 2026, cumulative household air conditioner production schedules reached 94.94 million units, a 26.53% decline compared to the same period last year. Domestic sales schedules totaled 50.57 million units, down 27.47% year-on-year, while export schedules totaled 44.37 million units, down 21% year-on-year. As the year's quotas were consumed and time progressed, spot market prices for R32 gradually increased. Data show that as of June 30, 2026, the semi-annual average price of R32 was 62,988 RMB/ton (up 33.69% year-on-year).
Due to the continuous contraction in end-user industry production schedules, the supply-demand gap for R32 remained positive throughout H1 2026. The pace of channel procurement and shipment for R32 slowed down simultaneously, and overall industry profit growth space narrowed. Consequently, due to weakening profits, R32 production began to be curtailed from March 2026 onwards. The supply-demand gap gradually declined from 0.6 million tons at the beginning of the year to around 0.4 million tons, stabilizing in the low range of 0.2–0.3 million tons in the second quarter. With reduced supply during the traditional peak season and resource scarcity, both spot and contract prices moved up to a higher level. By H1 2026, long-term contract prices for Q3 2026 were finalized for R32 and R410A at reference prices of 65,100 RMB/ton and 60,000 RMB/ton (cash), representing a sequential increase of 4.66% and 5.82% respectively compared to Q2 2026, and year-on-year increases of 28.66% and 20.97% respectively compared to Q3 2025.
IV. Supply-demand gap and price forecast for fluorinated refrigerants in the second half
Based on supply-demand data, with declining capacity utilization and the recovery of export markets in the second half, July may be the month with the lowest supply-demand gap for R32 in H2 2026. From August to October, some previously idled production units may resume operation, and quotas need to be consumed, leading to more ample supply. A persistently positive supply-demand gap puts pressure on prices. The high price space created by the relatively ample supply in the first half and the traditional peak season will likely narrow. Spot market price fluctuations for actual transactions in the second half are expected to narrow, with the price expected to trade in the range of 64,000–66,000 RMB/ton.
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