Key Takeaways
Shares of Dongyue Group (00189.HK), a major Chinese producer of refrigerants, jumped 13.1 percent after reports surfaced that the U.S. intends to delay the phase-out of hydrofluorocarbons (HFCs), a move that could prolong the profitability of the company’s core products.
"A potential U.S. policy shift is a significant event for global refrigerant suppliers," said a chemicals analyst at First Shanghai, whose recent report noted the sector's strong pricing power. "This extends the runway for existing product lines and eases immediate pressure to switch to newer, more expensive alternatives."
The stock climbed to a more-than-two-month high of HKD13.48 in Hong Kong trading before closing at HKD13.38. The session saw a dramatic spike in trading volume, with turnover reaching HKD379 million. The reported delay in the U.S. Environmental Protection Agency's (EPA) refrigerant limits follows a push by the Trump administration to pause the transition, citing affordability concerns for consumers.
The policy news provides a significant tailwind for a sector already experiencing a favorable pricing environment. According to a recent research report from First Shanghai, prices for core third-generation refrigerant products had already surpassed RMB60,000 per tonne as of April 2026. The report also noted that prices for the older second-generation R22 refrigerant were showing an upward trend ahead of the traditional peak cooling season. The potential for extended use of HFCs in a major market like the U.S. suggests these pricing levels could be sustained, directly benefiting Dongyue Group's revenue and margins.
The global refrigerant industry is in the midst of a multi-year transition away from HFCs due to their high global warming potential. The U.S. regulations, part of a global agreement known as the Kigali Amendment, mandate a sharp reduction in the production and import of these chemicals. A delay, as reported by Chinese media, would grant companies like Dongyue a longer period to sell their existing HFC products, which are cheaper to produce than next-generation alternatives like hydrofluoroolefins (HFOs) and A2L refrigerants.
This development highlights the complex interplay between environmental policy, international trade, and market dynamics. While the industry has been preparing for the transition with webinars and training on new A2L standards, a delay could slow the adoption of these mildly flammable, lower-GWP alternatives. For investors, the news resets the timeline for capital expenditures and the expected return on investment for chemical producers in the sector.
This article is for informational purposes only and does not constitute investment advice.
