A continued surge in refrigerant prices in China in early 2018 is expected to increase pressure on hydrofluorocarbon (HFC) refrigerant prices worldwide.
Chinese prices for HFCs fluctuated wildly in 2017 with price decreases mid-year, after increases of up to 150% on certain refrigerants at the beginning of 2017 and then further leaps in price in the final quarter of the year.
According to Chinese sources, the price of fluorspar reached a six-year high in late 2017 with increases of nearly 80%.
The Chinese price for acidspar in the domestic fluorocarbons market is reported to have ended the year at RMB2,555/t (US$393/t), up from RMB1,433.75/t (US$220/t) at the beginning of 2017. China is the source of more than half of the world’s production of fluorspar.
Roskill view: The increases were due largely to a classic combination of demand increases and supply shortages in vital refrigerant raw materials. Stricter Chinese environmental protection measures, including a new environment protection tax law as well as increased transport costs, have affected prices.
China’s State Council has detailed rules for the enforcement of the new environment protection tax law, which took effect on 1 January 2018. The regulation specifies taxation targets, conditions for tax reduction and exemptions as well as tax collection management, according to a State Council decree signed by Premier Li Keqiang.
The increase in domestic fluorspar prices has had a knock-on effect on Chinese prices for fluorspar derivative hydrofluoric acid, which, in addition to HFC refrigerant production, is used in the pharmaceutical industry as well as for producing fluoropolymers like Goretex® and Teflon®. This led to the Chinese market price of hydrofluoric acid also reaching a six-year high in 2017, with increases of nearly 95%.
As a result, Chinese refrigerant prices have seen hefty increases this year. The price of R32 rose around 120%, while R125 experienced increases of over 85%. This has had a particularly severe impact on the air conditioning sector, where both are used extensively. Main AC refrigerant R410A, which consists of a 50/50 blend of R32 and R125, saw prices rise over 100% in 2017. Single component refrigerant R134a experienced increases of around 35%.
Roskill’s Fluorspar: Global Industry, Markets & Outlook report was published in October 2017. Click here to download the brochure or sample pages or access further information.