1,1,1,2-Tetrafluoroethane

R134a Market Intelligence Report

I. Price Trends
- Recent Prices: As of July 6, 2026, the spot price of R134a stands at RMB 63,666.67 per metric ton, an increase of RMB 1,000 per ton (1.60%) from the previous day. Over the past week, the price has risen cumulatively by RMB 1,000 per ton (1.60%); over the past month, it has increased by RMB 1,333.34 per ton (2.14%).
- Historical Prices: By end-June 2026, the R134a market price had exceeded RMB 62,000 per ton. Over the past six months, prices have surged by more than RMB 7,000 per ton—representing a cumulative increase of over 14%. The average market price for R134a in the first half of 2026 was RMB 58,000 per ton—the highest level on record.

II. Supply and Demand Dynamics
- Supply Side:
- Quota Constraints: In 2026, the national total production quota for HFCs (third-generation refrigerants) is 797,800 metric tons, of which the R134a production quota is 211,500 metric tons—only a marginal increase of 3,242 tons over 2025, indicating limited supply growth. Market concentration is exceptionally high, with the top six producers collectively commanding over 90% of market share. Leading enterprises are actively implementing production controls to safeguard pricing power and maintaining low inventory levels.
- Policy Restrictions: Since 2024, China has formally implemented the HFCs quota management system under the Kigali Amendment to the Montreal Protocol, mandating a minimum 10% reduction in controlled-use HFCs consumption relative to the baseline level by January 1, 2029. Strict enforcement of this policy is accelerating the industry’s low-carbon transformation and eliminating non-compliant production capacity.
- Demand Side:
- Automotive Air Conditioning: Robust growth in new energy vehicle (NEV) production and sales is driving structural growth in R134a consumption. In May 2026, China’s NEV production and sales reached 1.554 million and 1.496 million units, respectively—up 22.4% and 14.4% year-on-year. NEVs accounted for 56.9% of total new vehicle sales. Each NEV air conditioning system consumes significantly more R134a than conventional internal combustion engine vehicles.
- Export Markets: Localization-based filling cooperation projects overseas have been successfully launched, enhancing export value-added. In 2025, China’s R134a exports totaled 58,000 metric tons, up 9.4% year-on-year, primarily destined for developing economies—including Southeast Asia, the Middle East, and South America—that have not yet fully implemented HFCs phase-down obligations. In 2026, both the U.S. Environmental Protection Agency (EPA) and the UK government announced delays to their HFCs phase-out timelines, extending the legal service life of third-generation refrigerants—including R134a—in developed markets and significantly improving the certainty of the export market’s favorable cycle.
- Commercial & Industrial Refrigeration: Expansion of cold-chain logistics is boosting demand for medium- and low-temperature commercial refrigeration equipment—including supermarket cold storage systems. In 2023, R134a consumption in the commercial & industrial refrigeration sector grew 6.2% year-on-year—the only application segment registering positive growth.

III. Cost Factors
- Raw Material Prices: Fluctuations in raw material prices—including hydrofluoric acid and trichloroethylene—directly impact production costs. In 2025, the average price of fluorspar powder rose 4.7% year-on-year; hydrofluoric acid prices remained elevated due to cost pressures, while coal and electricity prices stayed high—further compressing profit margins for refrigerant producers.

Analysis and Assessment

I. Reasons for Sustained High Prices
- Supply Side: Quota constraints and stringent regulatory policies limit supply expansion; high market concentration fosters strong collective discipline among producers to control output and support pricing.
- Demand Side: Sustained growth across automotive air conditioning, export markets, and commercial & industrial refrigeration has created a historically rare “demand resonance.”
- Cost Side: Elevated raw material and energy costs compel manufacturers to pass through higher input costs via increased ex-factory pricing.

II. Market Risks
- Policy Risk: Tightening environmental regulations could accelerate substitution with fourth-generation refrigerants, negatively impacting the third-generation refrigerant market.
- Demand Risk: Seasonal declines in air conditioner production may temporarily dampen demand and trigger short-term price corrections.
- Global Economic Risk: A global economic downturn could lead to a sharp decline in air conditioner exports, thereby reducing refrigerant demand.

Forecast

I. Short-Term Outlook
- Price Trend: In the near term, R134a prices will remain elevated and range-bound, with potential further upside during peak seasonal demand. Quarterly long-term contract (LTC) prices are expected to rise again in Q3 2026, with the magnitude of increase larger than those observed in Q1 and Q2.
- Supply-Demand Balance: On the supply side, production will continue to be tightly constrained by quotas and regulatory oversight, sustaining a tight equilibrium. On the demand side, automotive air conditioning and export markets will maintain growth momentum; however, accelerated substitution in the commercial & industrial refrigeration segment may widen the supply-demand gap.

II. Long-Term Outlook
- Price Trend: Over the longer term, R134a prices may face downward pressure as fourth-generation refrigerants gain adoption and environmental policies tighten. Nevertheless, robust export demand and rapidly expanding thermal management requirements in the NEV sector provide strong fundamental support—making a significant price collapse unlikely.
- Industry Trends: The industry’s transition toward “green and low-carbon” solutions is accelerating, with intensified R&D and deployment of environmentally friendly refrigerants. Concurrently, improvements in refrigerant recovery and recycling infrastructure will bolster sustainable development.