China’s refrigerants are booming in the first half of 2017 06-06-2017

China’s refrigerants are witnessing higher prices and huge demand, due to growing downstream markets and limited supply worldwide. However, China’s industry needs to switch to alternative refrigerants, looking at the Phase-out of HCFC and surging demand for natural refrigerants.


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After the spring festival in February, China’s sales of fluorochemicals was able to recover to some extent, but the production still remained low. Fluorite and refrigerants prices have been surging as the result of this low supply.  

According to market intelligence firm CCM, some of the major refrigerants in China even witnessed rises up by 50% in the beginning of 2017. Besides the low supply in domestic markets, also the worldwide HFC capacity is facing a reduced volume, which drives the price for refrigerants up. Furthermore, strengthened environmental protection measurements in China are causing huge pressure on manufacturers, leading to increasing costs and limited production.  

After all, the environmental pressure has forced production of Chinese HFC down by about 20% currently. As especially small and medium-sized manufacturers are not able to invest in cleaner production, larger manufacturers can use the reduced supply of refrigerants to quote higher prices for their products.  

China has become the largest producer of HFC, one of the major refrigerants used nowadays. Due to the low price, foreign enterprises can hardly compete with Chinese refrigerants on the world market. The USA, for example, is consuming almost all of the produced refrigerants by itself, while Other major markets like Europe and Japan can’t compete with the low production costs. Hence, as the demand for refrigerants is at an all-time high, China serves as the main supplying nation.  

Air conditioners application was the largest downstream market for refrigerants in 2016, according to Marketwatch. The same segment is expected to remain the largest market in the following period from 2017 to 2022. The largest growth region is hereby Asia-Pacific. Looking deeper at refrigerants, hydrocarbons are likely to be the fasts group of refrigerants growing in the market.  

Huge investments in infrastructure, domestic residential projects and growing urbanisation have led the Asia-Pacific region to the largest market for refrigerants in 2017, a trend this is likely to go on to the next decade.  

On the other side, demand for fluorocarbon may decline in the near future, due to the phase-out of HCFC and HFC by the middle of this century. This trend is leading manufacturers to turn their eyes on alternative refrigerants.  

One solution might be natural refrigerants like C02, hydrocarbons, and ammonia. However, the demand will be higher than the supply of those in the near future, according to markets experts’ opinion.  

China is also taking part in the new direction for refrigerants, as latest efforts and discussion, for example at the China Refrigeration 2017 in Shanghai show. Leading manufacturer executives have announced their efforts in investing in eco-friendly refrigeration technology.  

One of the projects, which are highly supported by the government as part of the HCFC Phase-out Management Plan, deals with transcritical CO2 systems in China. The biggest challenge for China might be to reach the countless small and medium-sized manufacturers in China, which play a huge role in China’s refrigeration production.  

What’s more, China is also the largest producer of fluorspar, a mineral which is used in the production of HFC. This mineral has reached the highest price in the last four years in China. This will inevitably put further pressure on domestic and global refrigerant gas prices.  As a fact, China is the supplier of more than half of the worldwide fluorspar trade, which makes price hikes in this country very meaningful to the world market. The increase in prices can be explained with the stricter environmental measurements in China, which put pressure on the production of HFC as well as the mining of fluorspar itself. 

Dealing with the low prices of Chinese refrigerants, earlier in 2017, the U.S. Department of Commerce had announced the final anti-dumping duties on Chinese refrigerants, claiming the price have been unfairly low. The final dumping margin was set to 167.02.  

Chinese refrigerants have been determined as dumping in the USA before. In June of 2016, Chinese importers of HFC blends and components were assigned dumping margins up to 216% at that time. The claims for the investigation came from American manufacturers, who complained about unfairly traded imports from China. In the beginning of the year 2016, anti-dumping duties of up to 210% have been announced for certain HFC refrigerants.  

About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.  

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