Friday, June 28, 2013

New policies affect the market share of refrigerants

According to CCM’s China Fluoride Materials Monthly Report issued in June, the new policy in the air-conditioning industry may increase the market share of R410a. On June 1, 2013, the Chinese 85% after 5 years. For R410a producers, it is a good chance to generate more profit in the intense domestic market. The new air conditioner policy will promote the production of inverter air-conditioners, which will increase the market demand for R410a.

For R22 producers, however, there may be difficult times because of the new air-conditioner policy. In 2013, China's Ministry of Environmental Protection (MEP) will impose quota limits on refrigerant production in accordance with the Kyoto Protocol. Although the relevant documents have not been issued, it's estimated that the production quota of R22 is only about 300,000 tonnes in 2013. But, the current capacity for R22 in China is about 720,000t/a. Worse still, the new air-conditioner policy will reduce the market demand for R22. It is worth noting that the Chinese government has cancelled the energy saving subsidy policy since June 1, 2013. Consumers cannot obtain subsidy when they buy an energy-saving product, which means the consumers need to spend more than USD24.23 to USD40.39 to buy an air-conditioner.

According to the MEP, there is no new policy to encourage consumption. The cancellation of the subsidy policy may reduce the domestic consumption of air-conditioners, which will have a bad effect on air conditioner enterprises. Furthermore, it will reduce the market demand for refrigerants. Government issued a new standard for inverter air-conditioners, which will be formally implemented in Oct. 2013. The new standard will divide the energy level of the inverter air-conditioners into 3 from the original 5. According to the new standard, the inefficient inverter air-conditioners with an energy level of 4 and 5 will no longer be listed in sales from Oct. 2013.

The new policy will promote air conditioner enterprises to continuously upgrade their products, which may lead to a tilt of domestic air-conditioners from fixed-frequency to inverter, which means the domestic market share of difluorochloromethane (R22) will be replaced by R410a. In this way, the market demand for difluoromethane (R32) and pentafluoroethane (R125), the main raw materials of R410a, will increase. At present, the market share of inverter air-conditioners is about 46%. Furthermore, it's estimated that the proportion will rise too.

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Wengfu Lantian's AHF project achieves success
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Domestic market prices of most fluoride materials reduce sharply in May
New policies affect the market share of refrigerant
Domestic market price of R134a decreases continually in May 2013
Pengshui successfully signs a fluorine chemical project with Toff
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3F sets up a new subsidiary company in Changshu City
Juhua obtains financing of USD290.79 million to construct its fluorine chemical projects
Do-Fluoride vigorously develops its lithium battery industry chain
Import and export analysis of fluoride chemicals in China in April 2013

China Fluoride Materials Monthly Report, a monthly publication issued by CCM on 20th, covers the sectors on policy & legislation, company dynamic, supply & demand, price update, etc. of China’s fluoride material market. You can keep pace with the latest dynamics through its timely, complete and professional report.

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