Fluorochemical Refrigerant Industry: Prices Rose Across The Board

In 2021, the fluorine chemical refrigerant industry was affected by the obstruction of raw material imports and the policy of limiting electricity production, which led to the shortage of fluorspar supply and the shortage of enterprise starts, resulting in the price of fluorine chemical refrigerants, including R22, R134a, R32, R125 and R410A, rising across the board.

With the support of high prices, the profit growth of fluorochemical refrigerants was limited. In the face of difficulties, mainstream fluorochemical refrigerant enterprises ushered in high growth through effective initiatives such as playing to the strengths of the industrial chain and enhancing production efficiency to break away from the loss-making quagmire in 2020.
　　
　　

Tight supply of raw materials pushes up fluorochemical refrigerant prices
　　

In 2021, the prices of R22, R134a, R32, R125 and R410A, fluorochemical refrigerants related to home appliances, rose across the board.
　　

Business community monitoring data show that the average mainstream price of R22 at the beginning of the year was 14,333 CNY/tonne, the average mainstream price at the end of the year was 18,333 CNY/tonne, the overall increase of 27.91% during the year, the lowest price in January, the price of 14,000 CNY/tonne, the highest price in October, the price of 2,666.67 CNY/tonne.

The average mainstream price at the beginning of the year was RMB17,500/tonne and at the end of the year was RMB31,000/tonne, with an overall increase of 77.14%. The lowest price of the year was in January at RMB17,500/tonne and the highest price was in the second half of October and the first half of November at RMB50,666.67/tonne.
　

　R410A refrigerant is a refrigerant formulated in a 1:1 mixture of R32 and R125, and the price trend is closely related to that of R32 and R125. When collecting the 2021 R32 refrigerant and R125 refrigerant price data released by the Refrigeration Express, the reporter of The Appliance found that the mainstream manufacturers' R32 quotation rose from RMB13,500~15,000/tonne at the beginning of the year to RMB22,000~24,000/tonne in November; R125 price rose from RMB28,000~30,000/tonne at the beginning of the year to 50,000~60,000 CNY/tonne.
　　

In terms of application scenarios, R22 is currently mainly used for the repair of domestic air conditioners and part of the export market. According to preliminary statistics, R22 currently accounts for less than 5% of the usage in the domestic air-conditioning sector. r410a and r32 are both major refrigerants in the domestic air-conditioning industry, with a market share of about 35% and 60% respectively in domestic air-conditioning.
　　

Analyzing the reasons for the price increase of these fluorochemical refrigerants, the reporter of "Electrical Appliance" summarized two aspects.
　　

Firstly, the raw material of the refrigerant is fluorspar. In recent years, the amount of fluorspar mined in China has not even been able to meet the demand for self-use, and the amount of fluorspar imported has increased accordingly at a high rate. Hydrofluoric acid is generated by the reaction between fluorspar and sulphuric acid, which is the most important raw material for refrigerants.

The start-up rate of Chinese hydrofluoric acid enterprises further dropped to 55% in 2020, resulting in a tightening of the supply of raw materials upstream of the fluorine chemical refrigerant industry, which in turn led to a rise in the price of raw materials and an increase in the price of refrigerants.

Gong Wenjun, assistant general manager of Sinochem Blue Sky Market Development Centre, said, "There was a time in 2021 when fluorochemical refrigerant raw materials were priced one day at a time, doubling or tripling in a few days." Juhua's 2021 performance forecast shows that the average price of fluorine chemical refrigerant raw materials rose 80.91% year-on-year in 2021, and the average price of refrigerant rose 41.58% year-on-year.

Second, the country's examination of energy consumption "double control" has been relatively strict, and gradually upgraded. The reporter of "Electrical Appliance" learned that in 2021, many provinces including Jiangsu, Zhejiang, Shandong, Guangxi, Yunnan, etc. started to restrict electricity and stop production. Affected by the electricity and production restrictions, the start-up rate of the fluorine chemical refrigerant industry has dropped significantly.

At the same time, the power and production restrictions also restricted the production capacity of upstream raw material enterprises, resulting in a relatively tight supply of raw materials, further aggravating the trend of declining start-up rates in the fluorochemical refrigerant industry and highlighting the tight supply situation in the industry.

　　Taking R125 as an example, in 2021, R125 was delayed due to the arrival of imported tetrachloroethylene, an upstream raw material, coupled with the lack of domestic plant start-ups, resulting in an oversupply of R125 in the short term and a sharp rise in prices.