GUANGZHOU — Midea Group, China’s largest home appliance maker, has raised air conditioner prices by over 6% in early 2026, responding to a 33% year-on-year surge in copper costs that has squeezed profit margins across the industry. The move is expected to trigger a wave of similar adjustments from competitors, reshaping pricing dynamics in the world’s biggest AC market.
Midea’s price hike was implemented in two phases: a 2% increase on Jan 3, followed by an additional 4% on Jan 5. Copper, which accounts for 25-29% of the cost of a typical AC unit, hit 98 yuan per kilogram in early 2026, forcing manufacturers to pass on rising raw material expenses to consumers. A standard 1.5-horsepower AC uses 6-7 kilograms of copper, mainly in heat exchanger pipes and other critical components.
Industry analysts note that Midea’s move sets a benchmark for the sector, with rivals like Gree Electric and Haier likely to follow suit in the coming weeks. While the price increases may dampen short-term demand, the impact could be mitigated by China’s 2026 home appliance trade-in policy, which offers subsidies for energy-efficient models. The policy, which focuses on six key categories including air conditioners, provides a 15% subsidy on the sale price of first-class energy-efficient products, with a maximum subsidy of 1,500 yuan per unit.
Midea has also emphasized its commitment to offsetting higher costs through technological innovation. The company has increased investment in variable-frequency compressors and AI-driven energy-saving features, aiming to maintain its competitive edge in a market increasingly focused on sustainability and smart functionality. With copper prices expected to remain elevated throughout 2026, the industry is likely to see a greater shift toward high-efficiency, premium products, as manufacturers seek to balance cost pressures with consumer demand for value and performance.
