In 2026, the R22 (dichlorodifluoromethane) market is characterized by a rigid reduction in quotas, a continuing tightening of supply, strong cost support, and a sharp surge in prices from already high levels. As the mainstay of second-generation refrigerants, R22 is in the final stages of phase-out. Global supply is shrinking, domestic quotas are decreasing year on year, and exports are experiencing structural growth. Driven by supply-demand imbalances and peak-season demand, prices have surged strongly, leading to a phased recovery in the industry’s prosperity.

I. Export Data: First-Quarter Exports Surge Year-on-Year, Supported by Overseas Maintenance Demand

Customs data indicates that exports of R22-related products saw substantial year-on-year growth between January and March 2026. Cumulative exports of R22 reached 0.37 million tons, a 59% increase compared to the same period last year, marking a significant recovery in export volumes. Exports were primarily directed to regions such as Southeast Asia, the Middle East and Latin America, where stable demand for the maintenance of existing refrigeration equipment overseas provided robust support for the essential demand for R22. Exports of upstream raw materials such as fluorite and hydrofluoric acid saw a slight year-on-year decline, as domestic supply remained tight and priority was given to ensuring downstream refrigerant production. Downstream exports of third-generation refrigerants R32 and R134a diverged, with R32 falling by 48% year-on-year and R134a rising by 1%. The overall export structure continued to optimize, with R22 becoming the core driver of export growth across the industry chain.

II. Current Production Capacity: Quotas Continue to Shrink, Industry Utilization Rates Remain Low

In 2026, R22 production capacity is characterized by “controlled total volume, decreasing quotas, and underutilization”. According to the Ministry of Ecology and Environment’s quota plan, the 2026 R22 production quota has been reduced to 146,100 tons, with a domestic quota of 78,000 tons, representing decreases of 3,000 tons and 2,900 tons respectively compared to 2025. Subsequent quotas will decrease annually, falling to 2.5% of the baseline value by 2030. Although total domestic production capacity remains stable, quota restrictions have kept the industry’s operating rate at a low level of 60–65%, resulting in a continuous contraction of effective supply. Since April, some production facilities have been operating at reduced capacity due to raw material shortages and environmental compliance maintenance, further reducing spot market supply. Market supplies are tight, and traders are reluctant to sell. Overseas, R22 production capacity has been largely phased out in Europe and the US, with only a few Asian countries retaining small-scale facilities. The global supply gap continues to widen, whilst China’s export share is steadily increasing.

III. Price Trends: Benchmark Price Rises Steadily Following a Surge of Over 25% Since April

R22 prices have generally trended upwards with volatility throughout 2026. After minor fluctuations from the start of the year through March, prices entered a sharp upward trajectory in April, with a cumulative increase exceeding 25%. The monthly increase in April alone reached 14%–21%, and the strong momentum continued into May, with prices continuing to surge.

On 11 May, the SunSirs R22 benchmark price reached 20,500.00 RMB/ton, up 1.65% from the beginning of May, setting a recent high.

The core drivers of price fluctuations were supply contraction, the onset of peak-season demand and cost support. Quota reductions led to a shortage of spot supplies, whilst the approach of the peak refrigeration season spurred repair demand. High raw material prices pushed up costs, and the combination of these factors fully unleashed price elasticity.

IV. Upstream and Downstream Prices: High Raw Material Prices Support Costs; Stable Downstream Repair Demand

Upstream raw materials, such as fluorspar and anhydrous hydrofluoric acid, are trading at high levels. In early May, the benchmark price for anhydrous hydrofluoric acid reached 15,100 RMB/ton, a 16% year-on-year increase, accounting for over 70% of R22 production costs, providing strong cost-side support. Prices for auxiliary materials such as liquid chlorine and methanol remain stable, further solidifying the cost floor. In the downstream sector, R22 is primarily used for the maintenance of refrigeration equipment such as air conditioners and cold stores, whilst the market for new units has largely been replaced by third-generation refrigerants such as R32 and R410A. As temperatures rise, the refrigeration maintenance market enters its peak season, with robust demand for small-packaged R22. Prices have risen in tandem with bulk water prices, and this stable essential demand is underpinning the upward trend.

V. Future Outlook: Tight Supply-Demand Balance to Persist; Prices to Fluctuate at High Levels with Upward Pressure

Looking ahead, the tight supply-demand balance in the R22 market is unlikely to be disrupted in 2026, with prices expected to fluctuate at high levels whilst the central price point rises steadily. On the supply side, quotas continue to shrink and plant maintenance has become routine, leading to a contraction in effective supply; the trend of overseas capacity phase-out is clear, with import volumes approaching zero, resulting in an overall tight supply situation. On the demand side, the domestic peak season for refrigeration maintenance continues, with stable demand for servicing existing equipment; overseas export demand remains resilient, supporting price strength. On the cost side, with fluorspar and hydrofluoric acid prices remaining high, and energy cost fluctuations increasing cost uncertainty, coupled with the industry’s willingness to support prices, R22 prices are more likely to rise than fall. In the medium to long term, as quotas are reduced year on year, R22 will gradually phase out of the market. Prices may reach a temporary peak towards the end of the phase-out cycle, before gradually declining as demand shrinks, whilst the industry accelerates its transition to third- and fourth-generation refrigerants.

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