Guosen: Refrigerant prices continued to rise in May, and PTFE is expected to be used in M10 materials.

Guosen released a research report stating that in 2026, the compliance reduction of the second-generation refrigerants will be implemented, while the quota system for the third-generation refrigerants will continue. The industry concentration of refrigerants such as R32, R134a, and R125 is high. The conversion ratio between different types of third-generation refrigerants is expected to increase, enhancing the flexibility of production allocation for enterprises. It is expected that the mainstream third-generation refrigerants will maintain a tight supply-demand balance in 2026. The tightening of refrigerant quotas is a long-term trend, under this background, Guosen is optimistic about the continued prosperity of mainstream refrigerants such as R32, R134a, and R125. The prices are expected to have significant upward potential in the long term. Leading refrigerant quota companies are expected to maintain high profitability levels in the long term. In addition, there is a positive outlook on the increasing demand for high-end fluoropolymers in the semiconductor industry. It is recommended to pay attention to fluorine-containing high molecular weight polymers such as electronic grade PTFE and ultra-pure PFA. It is suggested to focus on leading fluorine chemical companies with complete industrial chains, complete infrastructure, leading refrigerant quotas, and advanced process technologies. Guosen's main viewpoints are as follows: May Fluorine Chemical Industry Review As of the end of May (May 29), the Shanghai Composite Index reported 4068.57 points, down 1.06% from the end of April; the CSI 300 Index reported 4892.12 points, up 1.76% from the end of April; the SWS Chemical Industry Index reported 4544.02 points, down 8.93% from the end of April; the Fluorine Chemical Industry Index reported 1997.28 points, down 3.52% from the end of April. The Fluorine Chemical Industry Index outperformed the SWS Chemical Industry Index by 5.4 percentage points in May, underperforming the CSI 300 Index by 5.3 percentage points and underperforming the Shanghai Composite Index by 2.5 percentage points. According to the compiled Guosen Chemical Price Index, as of May 31, 2026, the Guosen Chemical Fluorine Chemical Price Index and Guosen Chemical Refrigerant Price Index reported 1416.61 and 2099.72 points, respectively, compared to the end of April, down by 0.79% and up by 0.71%. In May, with the price decline of anhydrous hydrofluoric acid background, some refrigerants and polymers such as tetrachloroethylene, R22, and R134a all saw varying degrees of price increases. R32, R125, R134a, R410a prices are rising According to Fluorine Online and Sublime China Information, as of May 29, 2026, R22 prices rose to 21,000-22,000 yuan/ton. R32 is priced at 62,700-64,000 yuan/ton. R125 prices remain at 55,000-60,000 yuan/ton; R410a/R404/R507 remain at 59,500/52,500/52,500 yuan. R134a prices remain at 61,000-62,000 yuan/ton. Adjustments in the UK and the US regarding the phase-out pace of third-generation refrigerants are positive for the increase in the export volume and price of refrigerants in China According to Fluorine Online, the UK has postponed its "stricter" HFCs phase-out plan, and the largest refrigerant wholesaler in the UK has raised prices for products such as R410a and R407c. On May 21, the US Environmental Protection Agency officially confirmed the revision of the "2023 Technology Transition Rule", extending the compliance period for hydrofluorocarbon refrigerants, relaxing related usage restrictions, allowing companies to choose more cost-effective refrigerant products. The recent adjustments in the phase-out pace of third-generation refrigerants in the UK and the US are not a denial of the "Kigali Amendment", but a correction of the overly aggressive domestic policies of the past few years. The core meaning is that although the direction of long-term constraints on third-generation refrigerants has not changed, the actual service life and maintenance replacement cycle of these refrigerants in developed countries have been extended, and the rate of decline in demand in the short to medium term has significantly slowed down. China, as a major supplier of refrigerants globally, has seen an increase in certainty in terms of exports, inventory replenishment, and pricing. End demand under pressure, June air conditioning production down year-on-year In the first two months of 2026, production was affected by the Chinese New Year holiday. In March and April, domestic production of household air conditioners showed strong resilience, driven by demand for installation associated with building delivery, providing support to the industry fundamentals. Despite the backdrop of high base numbers from the previous year and continuous increases in raw material costs, production only saw a slight year-on-year decline. In May, under various pressures such as costs and inventory, air conditioning production plans were reduced; in June, industry production was lower by over 2 million compared to the earlier period, with companies adopting a more cautious approach to production. In terms of exports, according to customs data, China's cumulative exports of air conditioners from January to April 2026 were 28 million units, down by 5.8% year-on-year. In January and February of 2026, there was differentiation due to the Chinese New Year holiday. As the impact of the Chinese New Year holiday faded in March, the decline in export production quickly narrowed. However, due to the high base numbers from overseas inventory replenishment in 2025, coupled with the impact of the Middle East war on transportation costs, exports from March to June are still expected to decline year-on-year. Regarding domestic production, according to industry sources, air conditioning production in June 2026 was 9.44 million units, down by 23.3% year-on-year; in terms of exports, air conditioning production in June 2026 was 5.79 million units, down by 20.8% year-on-year. Focus on the growth of high-end fluoropolymers in the semiconductor field In the high-end fluoropolymer sector, (1) PTFE: Nvidia has initiated tests on the Rubin Ultra's M10 CCL material. AI servers carry a large amount of computing power for high-speed signal transmission, so CCL materials must have extremely low dielectric loss factors to ensure the high-performance use of their chips. The M10 system upgrade imposes higher requirements on the material's dielectric constant and dielectric loss. PTFE, with a dielectric constant as low as 2.0-2.1 and dielectric loss as low as 10^-4 to 10^-5 levels, has significantly excellent dielectric performance advantages in high-frequency millimeter-wave scenarios, making it one of the resin alternatives for the M10 system. (2) PFA: High-purity PFA has long been monopolized overseas and is widely used in crucial processes such as semiconductor wafer cleaning, etching pipelines, and the delivery of high-purity reagents. In early May, Zhejiang Juhua's Zhejiang Jusheng Fluorine Chemical ultra-pure PFA successfully completed its first shipment of qualified products and was officially launched into the market. The project was completed and put into operation in June 2025. After testing and verification by downstream semiconductor customers, the product's metal ion index fully complies with the SEMIF57 international standard. This breakthrough directly fills the gap in advanced process materials, ensuring the autonomy and controllability of the industry chain. In addition, the Shao Wu Yonghe high-purity PFA project entered the trial production stage in October 2025, and related process verification and performance optimization work are progressing in an orderly manner. Fluorine Chemical Industry News of the Month Zhejiang Juhua achieves independent mass production of ultra-pure PFA; Changshu Sanaifu builds 1500 tons of high-end FEP pellets; Tight supply and price increases of fluorine-containing polymers in Europe; Shanghai Huayi Group Corporation partners with Zhongxin Huahong to layout the electronic materials track; Zhejiang Sanmei Chemical Industry lays out wet electronic chemicals. Risk warning: Fluorine chemical product demand falls short of expectations; policy risks (strict environmental protection policies for fluorine refrigerants, accelerated upgrading and replacement processes, changes in quota distribution policies, etc.); global trade frictions and export restrictions; low sentiment in the real estate cycle; delays in project commissioning progress for various companies; rising raw material prices; risks in chemical safety production, etc.