The leading third-generation refrigerant manufacturer will usher in a significant recovery and recovery in business performance
At the beginning of 2024, refrigerant prices showed a clear upward trend.
After the Spring Festival, the price of third-generation refrigerants continued to rise. As of February 23, 2024, the average price in the market by category in the first quarter of 2024 increased sequentially compared to the fourth quarter of 2023. The prices for large varieties R32, R134a, and R125 were 2.35, 3.15, and 40,000 yuan/ton, respectively, with weekly increases of 14.63%, 1.61%, and 11.11%, respectively. Among small varieties, the price of R143a is 57,000 yuan/ton.
On January 11, 2024, the Ministry of Ecology and Environment announced the issuance of quotas for the production, use and import of hydrofluorocarbons for 2024. Under quota restrictions, the supply-side rigidity of third-generation refrigerants is expected to enter a stage of continuous price increase as downstream demand gradually grows.
According to market dynamic analysis, recent HFC quotas may be temporarily frozen due to factors such as unclear specific quota cuts and exhibitions. This phenomenon may have an impact on some demand and may spawn part of the demand to monetize profits.
At the same time, price expectations for major products on the market have generally risen, and manufacturers are generally only willing to set prices for April and are unwilling to reserve prices for May and June. There may be a trend where prices will continue to rise in subsequent months.
Huatai Securities Research Report said that since the beginning of 2024, with the official implementation of the domestic quota system, the prices of mainstream third-generation refrigerant products have continued to rise. We believe that on the demand side, downstream refrigerant air conditioners, automobiles, refrigerators, etc. are expected to continue to benefit from policies such as equipment renewal and trade-in, and the traditional peak refrigerant demand season in the second quarter/third quarter is approaching, while the supply side is accompanied by the implementation of quotas, industry supply is significantly orderly, and the boom is expected to continue to rise under the resonance of supply and demand.
In the long term, due to problems such as overseas patent protection restrictions and high costs for fourth-generation refrigerants, it will take time to develop and large-scale promotion of alternative products for third-generation refrigerants. Huatai Securities expects the HFCs boom cycle to be long.
Refrigerant-related concept companies:
Dongyue Group (00189): Dongyue Group is a leader in China's fluorosilicon industry. The two major industrial chains of fluorine chemicals and silicon chemicals have integrated advantages. Third-generation refrigerant quotas have been implemented, supply and demand patterns have improved, and peak season catalysis drive price increases; long-term space for fluorine-containing polymer materials can be expected.