Will the soaring price of refrigerants cause price fluctuations in ice machines?

2021 is the most difficult year for the ice machine industry. This year, the price of copper, iron and aluminum has only stopped rising recently after a roller-coaster surge, and now comes the news of skyrocketing refrigerant prices. Let the ice machine industry boss call: this year the ice machine industry is not a loss is to make money.

What is the cause of this wave of refrigerant price rise, how long will it last, how much impact will it have on the ice machine industry, will it cause the price fluctuation of the ice machine?

In the last two weeks, all kinds of refrigerants have maintained a rapid rise, the price of domestic R125 rose from 33,000 yuan/ton to more than 50,000 yuan/ton, an increase of 51.5%; And R22, R134a and other refrigerant price increases are more than 30%. The price of R125 has skyrocketed. The price of R125 has risen by nearly 80% within a month and rebounded to 50,000 yuan/ton in mid-August, hitting a three-year high. R125 is one of the components of R410a. R410a consists of 50 percent R32 and 50 percent R125. Therefore, the price of R125 has skyrocketed, affecting air conditioners that use R410a as refrigerant.

Why the price of refrigerant will soar, the main reason is that the summer high temperature, refrigerant demand growth trend is obvious, the price of raw materials, new capacity is limited, the supply gap increases, the recent energy saving pressure, energy saving and electricity limited. The refrigerant market demand is mainly air conditioning (including automobile air conditioning), industrial and commercial ice-making refrigeration, accounting for more than 80%.

According to the Montreal Protocol and the Kigali Amendment, first-generation refrigerants have been completely eliminated, and second-generation refrigerants have been basically eliminated in developed countries.

According to the above agreement, our second generation refrigerant to implement quota system, and gradually reduce production by about 20%. For third-generation refrigerants, 2020 to 2022 will be used as the "baseline years", and production quotas will be set for 2024 to 2029, based on the average production of each manufacturer during the 2020-2022 period.

According to Guosheng Securities, by 2024, the total capacity of the second and third generation refrigerant under the agreement of the Kigali Amendment will be about 700,000 tons. At that time, the industry is expected to increase the demand to 750,000 tons, in the case of the popularity of the fourth generation refrigerant is still some time, the refrigerant industry may face a large supply gap.

It is because of the trend of less than demand in the refrigerant market, the rising price of raw materials and the US anti-dumping investigation against Chinese R125. On August 11, the US announced the preliminary determination that Chinese producers/exporters had a dumping rate of R125 of 280.37% to 28.48%. The final determination will be made on December 30. So the price of refrigerant rose in stages.

Some industry analysts believe that the current raw materials are still rising trend, the cost support continues to strengthen, refrigerant manufacturers start to decline, the supply of goods continues to be tight, the market price is not much, pushing up sentiment is still strong, it is expected that the refrigerant market will continue to run at a high level in the short term.

How much of an impact will that have on the ice machine industry? Refrigerant prices will remain high for a certain period of time, but its impact on the ice machine industry is very big, second only to the rising price of iron, copper and aluminum on ice machines.