According to Mordor Intelligence, the global refrigerant market demand is expected to grow to 1.97 million tons in 2023 and 2.23 million tons by 2028, with a compound annual growth rate of 25%, The global refrigerant market space is expected to be $6.6 billion in 2023 and grow to $9 billion by 2028, with a compound annual growth rate of 64%。At present, the Asia-Pacific region dominates the global refrigerant market, and China is the world's largest HFC producer, consumer and exporter.
A year of ups and downs
In the first half of 2023, the refrigerant market has a weak start, the overall market first rises and then declines, and the market volatility is strong, with a high and low price difference of up to 5,000 yuan tons. The industry has expectations for this year, but in the first half of the year, the traditional peak season of gold three and silver four for the actual position to boost the limited expectations, not all meet the expectations of the industry, coupled with the downstream increase is limited, the traditional peak season effect ended earlier than in previous years, early into the off-season, the mainstream types of refrigerants have fallen significantly.
The data shows that in the first half of 2023, the R22 market will rise first and then decline, and the average ex-factory price of ODS use in the first half of the year will be 19,157 yuan ton, a year-on-year increase of **1343%；The overall gold, silver, and four markets have been boosted within a reasonable range, and there has been no sharp rise and fall. The market volatility of R32 is smaller than that of R22, and the average ex-factory price in the first half of the year was 14,105 yuan tons, which was 0 yuan last year24%；Although the market has changed the long-term profit inversion state in the early stage, the profit margins of manufacturers continue to be under pressure. The R125 market is significantly higher than that of the previous two years, with an average ex-factory price of 24,667 yuan in the first half of the year, compared with 31 yuan last year09%。The overall gold, silver, and four markets are not boosted enough, and the market has not been boosted in the traditional peak season since January this year, and the market is obvious after the peak season is over. R134A was relatively significantly boosted by the traditional peak season, with an average ex-factory price of 22,679 yuan in the first half of the year, compared with last year's **356%；The overall gold, silver, and four markets are still to be boosted, and the market is from February to April and May to July
In the third quarter, the R22 market was slightly smaller, and the market on October 11 was about 1,000 yuan tons compared with July 11, an increase of about 54%；As of October 11, the R134A market was about 16,500 yuan tons, up about 4,500 yuan tons from July 11, an increase of about 262%。R32: In the third quarter of 2023, the R32 market** has improved, and the market** was at 16,500 yuan on October 11, an increase of about 269%；R125: In the third quarter, the R125 market was on the upside, and the market on October 11 was about 3,500 yuan tons compared with July 11, an increase of about 159%。
Since the fourth quarter of 2023, the price increase of refrigerants has gradually spread. According to Baichuan Yingfu data, as of November 22, the average price of R32 was 16,649 yuan ton, an increase of 18% month-on-month and 14% year-on-year; The average price of R134A was 26,908 yuan tons, an increase of 20% month-on-month and 12% year-on-year; The average price of R125 was 25,974 yuan tons, an increase of 16% month-on-month and a year-on-year decrease of 24%.
The price increase is related to the imminent implementation of the quota system. Industry insiders said, "The price increase of refrigerant is expected, but the price increase time is a little earlier than imagined." ”
What is the performance of leading enterprises
For fluorine chemical companies, HFCS quota allocation is crucial. In order to compete for more quotas, domestic fluorine chemical companies will compete for production and sales almost regardless of cost in the baseline year (2020-2022). Therefore, "one ton of production loses one ton, and one loss is three years" has become a true portrayal of the industry, and the performance of enterprises has been greatly impacted.
On October 26, Juhua Co., Ltd. released the third quarter report of 2023. According to the report, the company achieved operating income of 160 in the first three quarters1.3 billion yuan, down 2 percent year-on-year22%；Net profit attributable to the parent company 74.7 billion yuan, down 56 percent year-on-year04%；Basic earnings per share was 0$277 shares. Among them, the operating income in the third quarter was 591.7 billion yuan, a year-on-year increase of **075%；Net profit attributable to the parent company 25.7 billion yuan, down 65 percent year-on-year54%；Basic earnings per share was 0095 yuan shares.
In the third quarter of 2023, Yonghe Co., Ltd. achieved an operating income of 114.9 billion yuan, a year-on-year increase of 2037%；Net profit attributable to shareholders of listed companies was 5202760,000 yuan, a year-on-year decrease of 4258%；net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 494240,000 yuan, a year-on-year decrease of 2864%；Basic earnings per share was 0$14.
Lianchuang Co., Ltd.'s report for the third quarter of 2023 shows that the company's operating income in the first three quarters was 72.5 billion yuan, a year-on-year decrease of 5909%。Net profit attributable to shareholders of the listed company was 3035970,000 yuan, a year-on-year decrease of 9664%。The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 2335650,000 yuan, a year-on-year decrease of 9713%。Basic earnings per share were 00266 yuan.
East Sunshine disclosed the third quarter report of 2023, with operating income of 89 in the first three quarters of the reporting period9 billion yuan, a year-on-year increase of 315%。Net loss attributable to shareholders of the listed company 22.2 billion yuan, net loss attributable to shareholders of listed companies after deducting non-recurring gains and losses29.2 billion yuan.
On October 30, Sanmei Co., Ltd. announced that in the third quarter of 2023, the company's operating income was 87.3 billion yuan, a year-on-year decrease of 2723%；Net profit attributable to shareholders of listed companies10.8 billion yuan, a year-on-year decrease of 797%；net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 44.4 million yuan, a year-on-year decrease of 6205%。
However, with the gradual implementation of the third-generation refrigerant quota management measures, the supply and demand pattern is expected to be optimized, which is conducive to the recovery of corporate profits and the healthy operation of the industry.
Will refrigerants be in high demand in the future?
From the perspective of the downstream consumption structure of refrigerant, it is mainly used in the fields of air conditioning, automobiles and refrigerators, of which the air conditioning field accounts for the main part of the refrigerant consumption structure. According to the data of the China Business Industry Research Institute, the consumption of air conditioning accounted for 78% of the entire refrigerant market, the refrigerator field accounted for 16%, and the automobile field accounted for 6%.
The growth of the downstream market is driving the growth of refrigerants. Judging from various statistics, the sales of air conditioners in the cold year of 2023 will increase significantly under the pull of the scorching heat in most regions of China, and the domestic sales market of air conditioners in China will usher in a long-lost "big year". According to the data of Aowei cloud network, in the whole cold year of 2023, the domestic retail sales of air conditioners in China will reach 61.29 million units, a year-on-year increase of 91%;Retail sales reached 212.7 billion yuan, a year-on-year increase of 97%。
In addition, the output of refrigerators is also gradually increasing, according to the National Bureau of Statistics, from January to September 2023, the national output of refrigerators is 718240,000 units, a year-on-year increase of 136%;
In addition to a small number of newly produced air conditioners that still use HCFC-22, the third-generation refrigerant R410A or HFC-32 is mainly used, and most of the refrigerants currently used in refrigerators have been switched to HFC-134A and hydrocarbon refrigerant R600A. Automotive air conditioners have achieved the elimination of HCFC-12 and switched to the use of the third-generation refrigerant HFC-134A, and some high-end models or new energy vehicles have begun to use HFO-1234YF, a refrigerant with a lower GWP value.
With the acceleration of China's urbanization process, the upgrading of residents' consumption, and the economy entering a new normal of development, the production and consumption of air conditioners, refrigerators, automobiles, etc. are more likely to maintain a stable growth trend.
In addition, with the rapid growth of the number of residents of the above-mentioned products, it is expected that the maintenance demand for existing equipment in the future and the expansion of demand for household air conditioners and refrigerators brought about by the acceleration of urbanization will become an important driving factor for the growth of the market demand for fluorine-containing refrigerants.
With the release of the "14th Five-Year Plan" for the development of cold chain logistics and the "14th Five-Year Plan for the Development of National Fisheries", the rapid development of cold chain logistics has created room for the growth of refrigeration equipment such as cold storage and refrigerated trucks used in transportation; The rapid development of fresh supermarkets and e-commerce has also driven the growth of the commercial freezer market, and the demand for refrigerants has further expanded.
Refrigerants ushered in the tide of development?
As we all know, although HFCS refrigerants do not destroy the ozone layer, they are only used as transitional products due to the obvious greenhouse effect. According to the Kigali Amendment to the Montreal Protocol, China should freeze the reduction of HFCS consumption and production in 2024, start cutting it in 2029, and reduce the use of HFCs to within 20% of its baseline value after 2045.
HFOS refrigerant with "zero ODP value, lower GWP value" environmental sustainable characteristics, has become an ideal alternative to mainstream HFCS refrigerants, such as R1234Ze, R1234YF, etc., among which the R1234YF (ODP of 0, GWP of 4) jointly developed by Honeywell and DuPont is known as the most promising refrigerant, which can be applied to automobiles, refrigerators and many large stationary and commercial refrigeration equipment.
At present, international chemical manufacturers have accelerated the pace of building factories in China. Juhua Group is responsible for Honeywell's domestic production of PTFE R1234YF, and Shanghai 3F manufactures PTFE R1234YF for Chemours. Yonghe shares, Sanmei shares, Lianchuang shares and other fluorine chemical leaders are also actively deploying first-class refrigerants, and the industrial chain is constantly emerging to the field of high-end fluorine-containing new materials.
As a leader in the fluorochemicals industry, Chemours also invests heavily in low-GWP refrigerant manufacturing operations and R&D. Currently, Chemours has production facilities in the United States, Japan, and China, and has developed the Orteon family of low-GWP refrigerants. In the case of Chemours OrteonTM, for example, the breakthrough of this family of products is that it is based on HFO technology, does not destroy the ozone layer, and has a low GWP. What's more, in their respective application fields, the OteonTM series products can help customers achieve convenient conversion, maintain the same or even improve energy efficiency, and at the same time have important characteristics such as low toxicity, non-flammability or weak flammability, achieving the best balance of product performance, safety, environmental benefits, overall cost performance and other aspects.
As the world's leading refrigerant manufacturer, Honeywell has developed the most environmentally friendly refrigerant as early as 15 years ago, replacing the third-generation refrigerant R410A134A404A507, which is currently widely used, leading the future refrigerant application direction. Like the R448A launched by Honeywell, it has a high level of safety and a rating of A1; The GWP value of R404A and R507A is as high as 4000, and the GWP value of R448A is only 1273, which is equivalent to reducing direct carbon emissions by 67%, and can also provide 5% to 16% energy saving in medium or low temperature operation. Many domestic cases have proved that the return on investment is less than 3 years, which is in line with the expectations of Chinese customers for environmentally friendly products.
Although the first refrigerant has the advantages of not destroying the ozone layer and low greenhouse effect, as a new product to replace the third and second generation refrigerants that have been maturely applied, it cannot occupy a complete advantage in terms of technology, performance, etc.
The R1234ZE and R1234YF products have been launched** and are currently only widely used in some developed countries; Some fluorine-free refrigerants such as R744 (carbon dioxide), R717 (ammonia) and R718 (water) are more environmentally friendly, but they have problems such as low energy efficiency or safety hazards, and cannot be promoted on a large scale. Moreover, due to the different exhaust pressure, exhaust temperature, and critical temperature of boiling point of different refrigerants, equipment factories, engineering companies, and maintenance workers all need to re-learn and train.
Generally speaking, the first refrigerant has a broad development prospect, but to usher in its first development time, it needs to wait for a long time.