Dongyue Group (HKEX: 00189) has seen its shares surge over 7%. At the time of writing, the stock is up 7.1% to HK$17.5, with a trading volume of HK$1.355 billion.

The rally is attributed to recent announcements from the UK and US delaying their respective phasedown schedules for HFCs, a key class of third-generation refrigerants. The overall pace of HFC reduction and decarbonization has slowed, primarily due to rising costs across the refrigerant supply chain stemming from higher HFC prices.

Analysis suggests quota-driven supply for third-generation refrigerants remains tight, while demand from refrigeration equipment continues to grow. The relaxation of controls in the UK and US is expected to extend the demand cycle for these refrigerants, supporting a positive industry outlook. Companies with leading quota allocations are positioned to benefit.

Industry reports indicate strong price discipline among refrigerant manufacturers, with moderate factory inventory levels and no significant pressure for bulk sales. The policy shifts in the US and UK provide supportive fundamentals for the domestic market. With rising temperatures and the gradual release of restocking demand both domestically and internationally, the overall refrigerant market is expected to see a steady recovery.