HOME BLOG Vocation News Under the war situation in the Middle East, the triple pressure on China's household air-conditioning exports is highlighted
Under the war situation in the Middle East, the triple pressure on China's household air-conditioning exports is highlighted
chinaiol.com | 2026-03-11
The current war situation in the Middle East continues to ferment. As the core incremental market for China's home air conditioner exports, the turmoil in the Middle East is having a conductive impact on China's air conditioner export industry through the three links of logistics, cost and demand. Industry online data shows that since the war in the Middle East has continued to ferment, the export production schedule of household air conditioners has been significantly reduced compared with the previous plan. Overseas customers have canceled or postponed orders due to rising freight prices or increased war costs by shipping companies. In March, it is expected to be reduced by more than 500,000 units.
Impact of the war: short-term triple pressures are highlighted, and the industry is facing pain
The Middle East is an indispensable strategic market for China's home air conditioner exports. This market background determines the depth and breadth of the impact of the war. Industry Online data shows that in 2025, China's household air conditioners will export more than 17 million units to the Middle East, accounting for 20.8% of total exports. Among them, the export volume of air conditioners in core areas affected by the war is 8.36 million units, accounting for 10.2% of total exports, accounting for nearly half of the total exports to the Middle East.
Impact of the war: short-term triple pressures are highlighted, and the industry is facing pain
The Middle East is an indispensable strategic market for China's home air conditioner exports. This market background determines the depth and breadth of the impact of the war. Industry Online data shows that in 2025, China's household air conditioners will export more than 17 million units to the Middle East, accounting for 20.8% of total exports. Among them, the export volume of air conditioners in core areas affected by the war is 8.36 million units, accounting for 10.2% of total exports, accounting for nearly half of the total exports to the Middle East.
The ongoing war in the Middle East is bringing a short-term triple impact to the export of household air conditioners, and the industry is facing obvious pain.
Impact 1: The logistics chain is broken and logistics costs soar.
The Red Sea and the Strait of Hormuz are the core channels for Chinese home appliances to the Middle East. After the conflict broke out, ships were forced to detour around the Cape of Good Hope, increasing the voyage by 7-10 days and extending the transportation cycle from the original 35-40 days to 50-55 days. Logistics costs have soared. The freight rate on the Persian Gulf route has reached 1,327 US dollars/TEU, a month-on-month increase of 35.41%. The war insurance rate has increased from 0.35% to 0.85%, an increase of 143%. The war surcharge for a single container is as high as 2,000-4,000 US dollars. The comprehensive logistics cost for a single voyage has increased by 35%-40%.
In addition, some ports have suspended operations or restricted operations, resulting in shipping delays, cargo backlogs, order default risks and rising warehousing costs, further exacerbating corporate cash flow pressures.
Impact 2: Cost-side squeeze further compresses corporate profit margins.
Core raw materials such as copper, aluminum, and plastic account for more than 60% of the production cost of air conditioners. The war in the Middle East has caused energy price fluctuations and supply chain disorders, driving raw material prices to rise sharply. In February 2026, the spot copper price reached 102,000 yuan/ton, a year-on-year increase of 32.51%. Aluminum and plastics increased by between 10% and 25% due to oil prices, and refrigerant prices increased by more than 180%.
In addition, the Middle East itself is one of the regions with higher export unit prices, and this reduction will affect the entire export unit price. Although some companies have tried to increase product prices, they have been unable to fully cover the pressure of rising costs. The industry's export gross profit margin is expected to drop by 3-5 percentage points, and small and medium-sized enterprises are trapped in the dilemma of "difficulty increasing selling prices and soaring costs."
Impact three: The shrinking demand side intensifies short-term pressure.
The turbulent situation has led to a decline in consumer confidence in the Middle East. The willingness to purchase durable consumer goods has weakened. New orders for household air conditioners are generally postponed or cancelled. Orders from small and medium-sized manufacturers in the Middle East have fallen by 20%-40%. At the same time, financial sanctions have tightened, exchange rate fluctuations have intensified, the risk of redemption of forward credit orders has increased, and some companies have experienced problems such as customer loss and payment arrears, further restricting the implementation of orders.
However, this demand shrinkage shows structural characteristics. The situation in Saudi Arabia, the United Arab Emirates and other Gulf countries is relatively stable, and demand is less affected, while the core areas of conflict such as Iran and Lebanon are almost stagnant.
Cycle outlook and response strategies: short-term pressure, long-term disruption
From the perspective of the impact cycle, the impact of the war in the Middle East on the export of household air conditioners is not long-term.
In the short term, the next 1-2 quarters will still be a period of pain for the industry. According to the latest production scheduling data monitored by Industry Online, the export production of household air conditioners in March 2026 is 10.14 million units, with export performance declining by 12.4% year-on-year. After the spread of the situation in the Middle East, production schedules in March and the next two months have been reduced to varying degrees. Among them, small and medium-sized manufacturers and traders who rely on a single Middle East market have been hardest hit and face pressure to survive. However, leading companies rely on local stocking and diversified market layout to keep the impact relatively controllable.
Impact 1: The logistics chain is broken and logistics costs soar.
The Red Sea and the Strait of Hormuz are the core channels for Chinese home appliances to the Middle East. After the conflict broke out, ships were forced to detour around the Cape of Good Hope, increasing the voyage by 7-10 days and extending the transportation cycle from the original 35-40 days to 50-55 days. Logistics costs have soared. The freight rate on the Persian Gulf route has reached 1,327 US dollars/TEU, a month-on-month increase of 35.41%. The war insurance rate has increased from 0.35% to 0.85%, an increase of 143%. The war surcharge for a single container is as high as 2,000-4,000 US dollars. The comprehensive logistics cost for a single voyage has increased by 35%-40%.
In addition, some ports have suspended operations or restricted operations, resulting in shipping delays, cargo backlogs, order default risks and rising warehousing costs, further exacerbating corporate cash flow pressures.
Impact 2: Cost-side squeeze further compresses corporate profit margins.
Core raw materials such as copper, aluminum, and plastic account for more than 60% of the production cost of air conditioners. The war in the Middle East has caused energy price fluctuations and supply chain disorders, driving raw material prices to rise sharply. In February 2026, the spot copper price reached 102,000 yuan/ton, a year-on-year increase of 32.51%. Aluminum and plastics increased by between 10% and 25% due to oil prices, and refrigerant prices increased by more than 180%.
In addition, the Middle East itself is one of the regions with higher export unit prices, and this reduction will affect the entire export unit price. Although some companies have tried to increase product prices, they have been unable to fully cover the pressure of rising costs. The industry's export gross profit margin is expected to drop by 3-5 percentage points, and small and medium-sized enterprises are trapped in the dilemma of "difficulty increasing selling prices and soaring costs."
Impact three: The shrinking demand side intensifies short-term pressure.
The turbulent situation has led to a decline in consumer confidence in the Middle East. The willingness to purchase durable consumer goods has weakened. New orders for household air conditioners are generally postponed or cancelled. Orders from small and medium-sized manufacturers in the Middle East have fallen by 20%-40%. At the same time, financial sanctions have tightened, exchange rate fluctuations have intensified, the risk of redemption of forward credit orders has increased, and some companies have experienced problems such as customer loss and payment arrears, further restricting the implementation of orders.
However, this demand shrinkage shows structural characteristics. The situation in Saudi Arabia, the United Arab Emirates and other Gulf countries is relatively stable, and demand is less affected, while the core areas of conflict such as Iran and Lebanon are almost stagnant.
Cycle outlook and response strategies: short-term pressure, long-term disruption
From the perspective of the impact cycle, the impact of the war in the Middle East on the export of household air conditioners is not long-term.
In the short term, the next 1-2 quarters will still be a period of pain for the industry. According to the latest production scheduling data monitored by Industry Online, the export production of household air conditioners in March 2026 is 10.14 million units, with export performance declining by 12.4% year-on-year. After the spread of the situation in the Middle East, production schedules in March and the next two months have been reduced to varying degrees. Among them, small and medium-sized manufacturers and traders who rely on a single Middle East market have been hardest hit and face pressure to survive. However, leading companies rely on local stocking and diversified market layout to keep the impact relatively controllable.
In the medium term, as conflicts ease, the industry will enter a period of repair. The high-temperature demand in the Middle East is irreplaceable. The backlog of consumer demand during the conflict and post-war reconstruction demand will be released intensively. The industry predicts that the demand for air-conditioning supporting equipment in residential, power grid, infrastructure and other fields will rebound by 15%-30%. At the same time, European and American brands may shrink their presence in the Middle East market due to the epidemic. Chinese air-conditioning companies are expected to further seize market share and strengthen their dominant position in the Middle East market with their advantages of high cost performance, fast delivery capabilities and extreme environment adaptability.
In the long term, the industry will enter a period of transformation and differentiation, and the war situation will accelerate the upgrading of Chinese air-conditioning companies from product exports to localized operations. Leading companies will increase their localized production layout in the Middle East. For example, Haier has set up a factory in Egypt to radiate into the Middle East and North Africa markets. Through local production, it can avoid shipping risks, reduce logistics costs, and be closer to market demand. At the same time, we will accelerate the development of emerging markets such as ASEAN, Africa, and Latin America, and reduce our reliance on a single regional market. Small and medium-sized enterprises that lack core technologies, have no local presence, and have weak risk resistance will be eliminated. Industry concentration continues to increase, and the pattern of the strong always becoming stronger becomes more obvious.
Facing the opportunities and challenges brought by the war in the Middle East, Chinese household air-conditioning companies are taking active actions and seeking to take multiple measures to deal with risks and seize opportunities. The general paths are as follows:
•In terms of logistics optimization, switch to land transport or multimodal transport, such as using the China-Pakistan Economic Corridor to avoid risks on the Red Sea route, and at the same time sign long-term agreements with shipping companies to lock in freight rates and shipping spaces to reduce the impact of logistics fluctuations.
•In terms of cost control, we signed long-term supply agreements with upstream suppliers to lock in raw material prices. At the same time, we improved product energy efficiency through technology upgrades and reduced unit production costs.
•In terms of market and product layout, we will deeply explore stable markets such as Saudi Arabia and the United Arab Emirates, increase investment in research and development of energy-saving, intelligent high-end models, and adapt to the energy efficiency standards and extreme environmental needs of the Middle East. At the same time, we will actively expand alternative markets such as Africa and Central Asia to diversify regional risks.
•In terms of risk management and control, we actively purchased export credit insurance to avoid political and exchange risks, and adopted more robust settlement methods such as letters of credit to shorten the account period and reduce the risk of payment collection.
To sum up, the impact of the war in the Middle East on the export of household air conditioners is both short-term impact and long-term opportunity. Short-term logistics, cost and demand pressures are pains that the industry must experience, but mid-term demand recovery and long-term industry reshuffle will promote Chinese air-conditioning companies to optimize supply chain layout, enhance core competitiveness, and accelerate global transformation. For China's household air-conditioning industry, only by proactively responding to risks and deeply exploring products and markets can we gain a firm foothold in the fluctuations of the Middle East market and achieve sustained and healthy development.
In the long term, the industry will enter a period of transformation and differentiation, and the war situation will accelerate the upgrading of Chinese air-conditioning companies from product exports to localized operations. Leading companies will increase their localized production layout in the Middle East. For example, Haier has set up a factory in Egypt to radiate into the Middle East and North Africa markets. Through local production, it can avoid shipping risks, reduce logistics costs, and be closer to market demand. At the same time, we will accelerate the development of emerging markets such as ASEAN, Africa, and Latin America, and reduce our reliance on a single regional market. Small and medium-sized enterprises that lack core technologies, have no local presence, and have weak risk resistance will be eliminated. Industry concentration continues to increase, and the pattern of the strong always becoming stronger becomes more obvious.
Facing the opportunities and challenges brought by the war in the Middle East, Chinese household air-conditioning companies are taking active actions and seeking to take multiple measures to deal with risks and seize opportunities. The general paths are as follows:
•In terms of logistics optimization, switch to land transport or multimodal transport, such as using the China-Pakistan Economic Corridor to avoid risks on the Red Sea route, and at the same time sign long-term agreements with shipping companies to lock in freight rates and shipping spaces to reduce the impact of logistics fluctuations.
•In terms of cost control, we signed long-term supply agreements with upstream suppliers to lock in raw material prices. At the same time, we improved product energy efficiency through technology upgrades and reduced unit production costs.
•In terms of market and product layout, we will deeply explore stable markets such as Saudi Arabia and the United Arab Emirates, increase investment in research and development of energy-saving, intelligent high-end models, and adapt to the energy efficiency standards and extreme environmental needs of the Middle East. At the same time, we will actively expand alternative markets such as Africa and Central Asia to diversify regional risks.
•In terms of risk management and control, we actively purchased export credit insurance to avoid political and exchange risks, and adopted more robust settlement methods such as letters of credit to shorten the account period and reduce the risk of payment collection.
To sum up, the impact of the war in the Middle East on the export of household air conditioners is both short-term impact and long-term opportunity. Short-term logistics, cost and demand pressures are pains that the industry must experience, but mid-term demand recovery and long-term industry reshuffle will promote Chinese air-conditioning companies to optimize supply chain layout, enhance core competitiveness, and accelerate global transformation. For China's household air-conditioning industry, only by proactively responding to risks and deeply exploring products and markets can we gain a firm foothold in the fluctuations of the Middle East market and achieve sustained and healthy development.
China's industrial added value above designated size actually increased by 6.3% year-on-year from January to February
Analysis of the economic operation of China's shipbuilding industry in 2025
Related blog
