由 caicai8478 With the arrival of the scorching summer heat, the surge in refrigerant prices in South Korea and its reliance on China are raising concerns.
An air conditioning refrigerant filling company in Anyang, Gyeonggi Province, raised its home air conditioning recharge fees this summer from the usual 60,000-70,000 won to 100,000-110,000 won. While summer recharges have traditionally been more expensive, the recent increase in refrigerant gas costs has forced the increase. “The retail price of a 20kg drum of refrigerant has increased approximately threefold compared to last year, to nearly 200,000 won,” said the company’s owner, Mr. A. “This reflects both raw material costs and labor costs.”
With Seoul issuing its first high temperature warning of the year and the arrival of scorching summer weather, the price of refrigerant for air conditioners, refrigerators, and other appliances has also risen sharply. This is primarily due to the continued rise in refrigerant prices in China, from which South Korea relies heavily on imports.
According to chemical product distribution industry data on the 7th, the price of R-134a, a refrigerant commonly used in automotive air conditioners, rose 9% in China from 44,438 yuan (approximately 8.48 million won) per ton in January to 48,438 yuan (approximately 9.24 million won) in May. In particular, the price of R-410a, a refrigerant commonly used in home air conditioners, rose 11.1% in China, from 43,875 yuan per ton in January to 48,750 yuan in May. An industry insider explained, “Refrigerants are almost entirely imported from China, and there is no unified international price standard. Therefore, any increase in domestic prices in China will also lead to an increase in import prices.”
The rise in refrigerant prices is due to a surge in domestic demand for refrigerants in China due to rising temperatures, coupled with rising raw material costs. A local Chinese industry consulting firm analyzed in a report last month that “China’s air conditioner production is expected to reach 20.53 million units in June, an increase of 11.6% year-on-year, with domestic sales alone projected to grow by 29.3%.” The growth in the production and sales of electric vehicles and other vehicles in China has further boosted demand for refrigerants. The report noted that “production plants for popular refrigerants such as R-134a are currently operating at full capacity,” but “due to insufficient supply, widespread market paralysis is occurring.”
South Korea also has companies capable of developing refrigerants, but due to the price competitiveness of Chinese companies, they currently focus on importing finished products. Environmentally friendly refrigerants introduced in recent years are also hindered by patent barriers held by global chemical companies. According to data from South Korea’s Ministry of Trade, Industry and Energy, 99% of domestic consumption of HFC-134a (the chemical name for the refrigerant R-134a) in South Korea last year relied on imports.
A representative from a South Korean refrigerant importer stated, “While rising refrigerant prices won’t be immediately reflected in air conditioner or refrigerator prices, the cost of refilling home and car air conditioners during the upcoming autumn moving season will be directly affected.” He explained, “South Korea’s demand for refrigerant is relatively stable, so we don’t stockpile excess inventory. Instead, we import by tanker truck and distribute directly to dehumidifier and air conditioner manufacturers.”
While there have been no supply disruptions for refrigerants, high dependence on China remains a significant concern. This exposes South Korea to direct price fluctuations in China. Furthermore, China’s use of export controls, similar to its actions with rare earth and critical minerals, as a means of influencing the global supply chain poses a risk. Kang Cheon-gu, a distinguished professor at the Graduate School of Manufacturing Innovation at Inha University, stated, “As with the urea incident, if import dependence on a single country exceeds 70-80%, any changes in that country’s situation will inevitably impact us directly.” “Therefore, it is necessary to diversify refrigerant import channels and expand to other Asian countries.”
A representative from South Korea’s Ministry of Strategy and Finance stated, “We will examine supply chain issues for products like refrigerants that are highly dependent on China.” For products like refrigerants that cannot be produced domestically, the government is implementing a policy of subsidizing the price difference with China or partially supporting stockpiling costs for companies that diversify their import lines through other countries.
-JoongAng Ilbo