Fluorochemicals and refrigerants: Cycles

How a quota land grab crashed prices, then sent them soaring

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Refrigerant prices are set by regulation more than by demand. Ahead of each quota baseline, producers build capacity and dump volume to lock in a large allocation; prices collapse. Once quotas bind, prices jump and stay high, because no one can add supply. China did this in 2020-2023, and India's 2024-2026 baseline period is doing the same. Fluorospecialties follow agrochemical and battery cycles instead. The floor is HF plus chlorinated feedstock cost, about RMB 13,000-17,000/t for R32 (calculated, indicative). The ceiling is the cost of switching to other gases and illegal imports.

The spread to watch R32 price minus HF and methylene chloride cost

About 0.77 t HF at RMB 12,000-16,000/t plus 1.63 t methylene chloride at about RMB 2,500/t gives about RMB 13,000-17,000/t of raw material. At RMB 62,500/t (June 2026) the spread is about RMB 45,000-49,000/t (calculated, indicative).

Booms and busts

2017-2018
The EU F-gas quota cut of 2018 squeezed supply of high-GWP blends; prices for R404A and R134a in Europe rose several-fold before easing (indicative).
not published here; tracked by Oeko-Recherche price monitoring (indicative)
2020-2023
Chinese producers expanded HFC output to raise their 2020-2022 Kigali baseline. Oversupply crushed prices and margins.
China R32 bottomed at about RMB 13,000/t in 2023 (36Kr)
2024-2026
China's quotas took effect in 2024 and cut supply below demand; prices and profits rose across Chinese and Indian producers.
R32 RMB 62,500/t and R134a RMB 59,727/t on 12 June 2026, up 34% and 31% YoY (36Kr); Juhua 2025 net profit RMB 3.78 billion
FY2025-FY2027
Indian fluorochemical margins rose with Chinese refrigerant prices and new specialty and CDMO contracts.
Navin FY2026 EBITDA margin 32.6%, up about 990 bps (ICICI Direct); SRF chemicals EBIT margin 24.9% to 29.1% (FY2026); GFCL refrigerant revenue up 52% YoY (Q1 FY2027)
2022-2024
In fluorospecialties for batteries, LiPF6 boomed with EVs and then collapsed when Chinese capacity arrived.
LiPF6 about RMB 600,000/t (H1 2022) to about RMB 60,000/t (2024) (Faxian Gongchang 2026)

What drives the cycle

Quota rules. Kigali baselines and national allocations set supply; India's allocation method for 2028 is still open.
Air conditioner demand. Hot summers and rising incomes in China, India and Southeast Asia drive R32 demand.
Fluorspar and HF cost. China's mine curbs and the 2026 sulphur shock raise HF cost.
Illegal trade. Smuggled HFCs undercut quotas, especially in the EU.
PFAS rules. An EU decision covering HFOs or TFA would change the next-generation market.

Metrics to track

Metric	Why it matters	Where to track it
China R32, R134a and R125 ex-factory prices	global price setter	SunSirs, Baiinfo, 36Kr reports
Indian producers' refrigerant revenue and margins	Indian profit pool	SRF, Navin, GFCL quarterly results
National HFC quota announcements	supply cap	China MEE, India MoEFCC Ozone Cell, US EPA
Atmospheric HFC-23 and HFC concentrations	checks on reported emissions	AGAGE