Tight HFC Supply Drives Surge in Chinese Refrigerant Prices Amid Multi-Sector Demand Expansion

According to market platform Fluorine Service Online’s latest data published on 15 June, domestic prices for mainstream third-generation refrigerants in China have hit fresh record highs amid a sustained industry upturn. R32, the core feedstock for residential air conditioning units, carries an ex-factory tax-inclusive price of RMB 63,000 per tonne, while R134a, widely deployed within new energy passenger vehicles, trades at RMB 64,000 per tonne on spot markets.

Spot market supply gaps continue to widen as the annual cooling season gathers momentum. Production lines at a refrigerant manufacturing facility in Jinhua, Zhejiang Province, run at full capacity throughout summer demand cycles, with order backlogs creating consistent shortages of ready-to-deliver stock.

Parallel expansion across downstream industrial segments delivers steady incremental demand for fluorinated cooling agents. Cold chain logistics forms one robust source of sustained consumption growth. Figures released by the China Federation of Logistics & Purchasing record total national cold chain logistics volume reaching 381.4 million tonnes across 2025, marking a 4.5 per cent year-on-year rise, while aggregate cold storage capacity expanded 5.53 per cent to 267 million cubic metres. Upward momentum within cold chain infrastructure amplifies tight supply balances and exerts continuous upward pressure on refrigerant quotations.

Large-scale cold storage operators based in Baoding, Hebei Province confirmed warehouse utilisation rates stay above 90 per cent throughout peak logistics cycles, with simultaneous spikes in refrigerant top-ups and commissioning of brand-new temperature-controlled storage hardware, per interviews carried out by Securities Daily.

New energy vehicle production delivers an entirely new growth vector for the refrigerant sector. Conventional internal combustion cars utilise fewer than 100 grams of cooling medium per unit, whereas electric models fitted with heat pump air conditioning systems consume vastly higher refrigerant volumes. Year-on-year rises in electric vehicle output unlock substantial new market potential for R134a and fourth-generation low-global-warming-potential refrigerants, establishing these product lines as primary demand drivers.

Stringent environmental production quota regulations severely restrict capacity expansion on the supply side. Official statistics from the Ministry of Ecology and Environment set the 2026 national production cap for third-generation HFC refrigerants at 797,800 tonnes, with only an incremental 5,963 tonnes allocated versus the prior year’s allowance. The sector exhibits extreme production concentration, with the six largest manufacturers controlling a combined 90 per cent of total market output. Core production quotas and operational capacity remain concentrated among leading enterprises, limiting flexibility to ramp up supply volumes quickly.

Analysis published in Securities Daily outlines the structural market shift toward prolonged tight supply and demand equilibriums. Annual minor upward adjustments to HFC quotas fail to match simultaneous volume expansion across air conditioning, cold chain and electric automotive end markets, maintaining elevated price levels for refrigerant products.

Top fluorochemical manufacturers channel steady quota-derived revenue gains into high-end industrial chain development. Zhejiang Juhua Co., Ltd disclosed timelines for mid-handover completion on 30 June for its integrated high-performance fluorine and chlorine new materials complex in Gansu Province, which incorporates dedicated manufacturing lines for premium fluorochemicals, electronic-grade fluorides and fourth-generation low-carbon refrigerants.

Zhejiang Sanmei Chemical Co., Ltd shared operational updates via investor interaction channels noting elevated air conditioning demand driven by summer heatwaves. The firm maintains steady output of established refrigerant ranges while tracking emerging industrial application segments to capture fresh consumption opportunities.

Enterprises holding secured production quotas and fully integrated industrial layouts stand to capture consistent cyclical returns as rigid supply constraints coincide with persistent demand growth. Major fluorochemical operators will keep accelerating industrial upgrading to advance green, high-value fluorine material manufacturing frameworks across domestic production bases.

Market participants will maintain oversight of quarterly quota allocation adjustments, seasonal downstream consumption swings and new high-end fluorochemical project commissioning timelines, all of which shape medium-term pricing trajectories for the full refrigerant product portfolio.