2018 Refrigerant Pricing Predictions

It’s that time of year again folks. The Christmas trees are out and I’ve got all of my shopping done but what am I thinking about while the ground is frozen? Refrigerant. Yup, you got it. Refrigerant. It’s always on my mind. What will the prices do next year? Will it be as crazy as 2017 was? What can we expect?

I have taken the time to write a short piece on each of the popular refrigerants and what we can expect for 2018. Let’s dive in.

R-410A Pricing

R-410A. It’s the refrigerant that everyone loves and adores, right? Well, maybe not this year. Upon researching for this article I saw so many articles, posts, and gripes about the price of R-410A over the spring and summer of 2017. In some cases depending on where and when you bought you could have seen the price double from one month to the other.

This right here is why I take the time to write these articles each and every year. It’s a lot of fun to dig into the information and figure out why. Why did this price increase happen? What can we do to avoid this? Will it happen again in 2018? Well ladies and gentlemen let’s dive in and take a look at the facts:

Considerations

Like with any good analysis we have to look at the considerations and outside factors that will affect the price on R-410A in 2018 before we can make an attempt at an accurate price prediction for next summer. Let’s take a look:

  • There was a worldwide shortage of R-125 during the summer of 2017. For those of you who do not know R-410A is a blended refrigerant comprising of R-32 and R-125. The majority of R-125 is sourced from China and something happened over the spring and summer of 2017 that caused the shortage that we all felt in our pocket books. I spent some time researching why this happened. The most common explanation that I found is that the chemical Flurospar experienced a forty percent price increase towards the beginning of 2017. (Flurospar is a main ingredient in the R-125 refrigerant.) This price increase caused a direct effect on the price of R-125 raising it by one-hundred and thirty percent. The price increase on Flurospar was blamed on China’s strengthening of environmental laws that directly affect the mining industry. So, because China wanted to become more environmentally conscious we all paid the price.
  • A lot of people already know about the tariffs on R-134a Chinese imports. This was put in place by the International Trade Commission in the spring of 2017. What a lot of people don’t know is that there are tariffs also on imported Chinese HFC refrigerant blends, such as R-410A. These tariffs can range from 101.82% to 216.37%. (These variances depend on cost of the product at the time of import.) These tariffs were put in place in the summer of 2016 so a lot of us have already seen the affect over 2017’s summer.
  • As I write this article there is not a defined or clear low Global Warming Potential alternative to R-410A. That doesn’t mean that companies and governments aren’t actively looking for an alternative but at this point in time there just isn’t a suitable fit. What that means folks is that R-410A is here to stay for the foreseeable future. That means market stability.
  • I said above that R-410A is here to stay but that doesn’t mean that it’s not in the cross-hairs. 410A has a high GWP and is so widely used that it is definitely having an pact on the environment. So, it won’t be in 2018 but give it time, maybe even just a few years, and we will begin to see the inevitable phase out of 410A to a new, most likely HFO, refrigerant. This leads me into my next point.
  • While the 410A residential application has been untouched by the EPA other applications haven’t. While we all know that the majority of 410A usage comes from residential the discontinuation of these other applications can and will have ramifications. Remember, this is the beginning of a phase out. The EPA’s SNAP Rule 20 source can be found by clicking here or you can read the below excerpt:
    • New vending machines as of Jan. 1, 2019;
    • New stand-alone medium-temperature units with a compressor capacity below 2,200 Btuh and not containing a flooded evaporator as of Jan. 1, 2019;
    • New stand-alone medium-temperature units with a compressor capacity equal to or greater than 2,200 Btuh and stand-alone medium-temperature units containing a flooded evaporator as of Jan. 1, 2020;
    • New stand-alone low-temperature units as of Jan. 1, 2020; and
    • New chiller applications as of Jan. 1, 2024.

Pricing Predictions

I’ve been doing these price prediction articles for a few years now and it has given me a unique opportunity to see the trend in pricing of R-410A over the years. Before I get into my prediction let’s take a quick look to see how the pricing has climbed over the years. Keep in mind that these prices are based off the standard 410A twenty-five pound cylinder and purchasing one at a time. The prices are obviously lower if you are purchasing a pallet or more.

Now, obviously we can see that the price has died back down from what it was this summer. That’s a good thing, but it’s also winter. Let’s take a look at the past few years. From 2015-2016 we saw a ten percent increase in price. Nothing too major. The big change occurred from 2016-2017. There is a fifty percent increase in price here. This increase is in direct correlation to the time when the tariffs on Chinese imported 410A refrigerant were put into place. Those numbers just go to show you how much of an impact cheap Chinese imports were having on the marketplace.

Alright, so the big question on everyone’s mind is what will the pricing of 410A do in 2018? Well folks, I hate to say it but I think we’re going to have a repeat of 2017. Right now the price has leveled out more or less at around $150.00. This is due to the winter months and low demand. But, as the demand begins to pick up I fear that we will begin to see a shortage again on R-125. (A key ingredient to R-410A.) Fifty percent of the world’s global demand of R-125 comes from China and earlier this year they strengthened their environmental regulations on Flurospar mining. These new regulations are here to stay. So, what that means is that we could very well see another spike in pricing once the demand of a hot summer hits the United States again.

Here is my prediction. R-410A will stay level just as it is now at around $150.00 a cylinder. (Depending on where you buy you can go up or down about ten or twenty dollars.) If we have another shortage, which I think we will, I believe we could easily hit over $200.00 a cylinder. I do not think it will be as bad as it was in 2017 mainly because I hope that companies can learn from their mistakes and help fill the gaps when the 2018 season hits.

The last point I’ll mention here is that this pricing that I am putting forth is based on a one cylinder purchases. If you were to purchase 3, 5, or more cylinders at a time you will see a lower price. Just remember that when the summer hits and the demand skyrockets your price can as well.

Conclusion

The question a lot of you may be asking is how can I avoid this price gouging situation during next year’s summer? Well folks, the answer is pretty simple and it’s exactly what I used to do when I purchased R-134a. Buy in bulk and buy in the dead of winter. Prices aren’t going to go any lower then they are in December and January. It’s a simple supply and demand concept. Barely any one is buying at this time and the demand is all but stopped unless your are in Phoenix.

Distributors still have numbers to meet. Sure they have their curved budgets for the summer months but they will gladly take a large sale and will be more than willing to cut you a deal so that they can get the business. Yes, you will have to sit on your inventory for a bit but think about how comfortable you will be in the summer, and if the pricing does sky rocket again you can sit back and make a ton of profit off each pound you sell while your competitors are paying sky-high prices.

R-22 Pricing

R-22 Refrigerant 30 pound jug.

Even today R-22 refrigerant is still one of the most demanded and used refrigerant on the market. Sure, over the years the HFC R-410A has slowly been eroding R-22’s market share but there are still thousands of old R-22 machines out there from 2010 or even earlier. These machines have already started breaking and with each passing season the chance of breakage cranks up higher and higher. As you all know when a leak occurs, especially a large one, the system will need more refrigerant. Customers have to weigh the cost to replace their R-22 or to get a brand a new R-410A unit. We all know the guy who will want to ‘save’ a thousand dollars today by patching their old R-22 unit and have it limp along for another year or two. Because there are those guys out there rather they be homeowners or small business owners the demand for R-22 will still be there even as we go into the year of 2018.

The question now though is what will the new 2018 year bring to the price of R-22? Will it remain flat? Will it go up? Or, will it crash? I highly doubt it will crash but let’s dive in and take a look at what’s going to happen to the R-22 market.

Considerations

Like with any good analysis we have to look at the considerations and outside factors that will affect the price on R-22 before we can make an attempt at an accurate price prediction for next summer. Let’s take a look:

  • The Phase Out – As all of you know R-22 was phased out in 2010 but what some of you may not know is that the scheduled phase out was set to be staggered occurring every five years until it’s completion in the year 2030. The initial 2010 phase out caused the price of R-22 to jump and jump. We went through another reduction in the year 2015. This caused the price of R-22 to climb even higher. As we approach 2018 we are now only two years away from the big change. In 2020 there will be NO importing or producing of R-22 allowed in the United States. The only source for R-22 refrigerant will be through reclamation. Think about that for a second. The only way you can get R-22 is by sourcing it from a reclaimer. Can you imagine what will happen to the cost of this stuff when the year 2020 comes?
  • Companies Consolidating – I’ll touch this further on a much larger article but for now what I will say is that there are two companies out there who saw this 2020 deadline for R-22 imports as a godsend. These two companies, Hudson Technologies and A-Gas Americas, have been buying up all of the refrigerant reclaimers in the States in an effort to monopolize the market and the price of R-22 so that when the 2020 deadline comes they will control nearly all of the market and sale of R-22. In other words, they can raise their prices to whatever they want as long as the other company agrees. There won’t be room for any other competing reclaimers if there are any left by the time we get to 2020.
  • On the flip side of the two points that I made it is worth noting that R-22 machines are dying. No new machines could be produced in 2010. So, that means that the youngest R-22 units out there are at least eight years old. (There are some companies who have been producing ‘dry’ R-22 units that ship to the contractor without any refrigerant to get around the clause, but these are the exceptions.) Customers and companies alike are debating back and forth on rather to repair their R-22 or to get a new R-410A machine. As the years pass the demand for R-22 will began to lessen as 410A gets a solid foothold on the market. The companies I mentioned above are gambling that the demand in 2020 for R-22 will still be high enough to to fill their reclamation supply. If it is not and 410A takes over the market then they may regret all of those reclaimer acquisitions they made.
  • The last point I’ll make here isn’t really a point at all. In fact it’s a table of the R-22 phase out schedule. This will give you an idea of what has happened to R-22 and what will happen in the future.
Year to Be Implemented Implementation of HCFC Phaseout through Clean Air Act Regulations Year to Be Implemented Percent Reduction in HCFC Consumption and Production from Baseline
2003 No production or import of HCFC-141b 2004 35.0%
2010 No production or import of HCFC-142b and HCFC-22, except for use in equipment manufactured before January 1, 2010 2010 75.0%
2015 No production or import of any other HCFCs, except as refrigerants in equipment manufactured before January 1, 2020 2015 90.0%
2020 No production or import of HCFC-142b and HCFC-22 2020 99.5%
2030 No production or import of any HCFCs 2030 100.0%

The Prediction

I’ve been doing this price prediction articles for a few years now and it has given me a unique opportunity to see the trend in pricing of R-22 over the years. Before I get into my prediction let’s take a quick look to see how the pricing has climbed over the years. Keep in mind that these prices are based off the standard R-22 thirty pound cylinder.

  • 2015 – $300.00
  • 2016 – $450.00
  • 2017 – $500.00

That is a fifty percent increase from the year 2015 to 2016. Then from 2016 to 2017 we have about a ten percent increase. As you can see we had a rather big jump in price the moment the tighter phase out restriction hit in 2015. I would say that we will experience the same effect if not more in 2020. It could go upwards to $800-$900 a cylinder when 2020 hits.

As for what will happen in 2018 for R-22 pricing I would say that we are going to experience a year very similar to 2017. The price will go up, albeit it slightly. If I was to put a number to it I would refer to this year and call it a ten percent increase. So, if we’re looking at a price of around $500 expect to see a price next year of around $550-$575 for a thirty pound cylinder. Keep in mind that this is for individual cylinders. If you were to purchase a few at a time or even a pallet at a time you’ll be able save some money and maybe even get into the $400 range for a cylinder.

Conclusion

So there you have it folks. Next year’s predicted price for a thirty pound cylinder of R-22 is set at $550-$575. If you are looking to buy some I would suggest to buy it now before the price climbs any higher. However, if you are on the other side of the coin and you have some inventory that you are sitting on I would hold onto it and watch the value climb and climb. I’ve even heard of some people buying whole pallets a few years back and storing it away in their warehouse for a few years. Imagine the profit if you bought forty cylinders at $300 and then turned around and sold them at $900 a few years later once the 2020 phase out laws have been put in place.

$500* 40 = $20,000 cost (40 cylinders is a pallet of refrigerant.)

$900 * 40 = $36,000 cost. (40 cylinders is a pallet of refrigerant.)

Profit of:      $16,000

Not too bad of a deal if you ask me! If you are interested in purchasing R-22 please visit our product page. Also, if you are interested in purchasing pallet quantities please visit our bulk purchasing page. Lastly, please be aware that you need to be certified with the EPA in order to purchase or handle R-22.

R-134a Pricing

R-134A 30 pound cylinder jug.
R-134A 30 pound cylinder jug.

There’s a soft place in my heart for R-134a refrigerant. Yes, I realize how strange that sounds but this is THE refrigerant that started it all for me. This was the refrigerant that introduced me to the industry. About eleven years ago I was in charge of purchasing R-134a refrigerant for a dealership group headquartered out of the Kansas City area. I would research the refrigerant, I would find the best price, I would negotiate between vendors, I would co-ordinate twenty pallet trailer loads. I could go on and on about it.

Most of you know that I came from the automotive side of the industry and on the auto side R-134a is king. A little over twenty years or so ago R-12 was the auto king but ever since then the reign of 134a has been pretty good. This may all be changing over the next few years though with the introduction of the HFO-1234yf and planned phase outs of HFC refrigerants like 134a.

The question on everybody’s mind though is what will the price of 134a do in 2018? How are the anti-dumping tariffs affecting it? Phase outs? YF? Will the price stay flat, jump, or sink dramatically? Let’s dive in and find out!

Considerations

Like with any good analysis we have to look at the considerations and outside factors that will affect the price on R-134a in 2018 before we can make an attempt at an accurate price prediction for next summer. Let’s take a look:

  • Most of you within the industry have heard about or have even been following the drama on anti-dumping duties or tariffs on Chinese imported HFC refrigerants. This battle has been going back and forth between companies and the International Trade Commission for years. The basis of the complaint is that China is dumping dirty cheap HFC product, like R-134a, into the United States marketplace. This Chinese government subsidized refrigerant allows China to bring this stuff into the States at dirt cheap prices. The US companies, and other EU companies, just can’t compete and end up either making little or nothing on their 134a sales. The case had been rejected or ruled against quite a few times but in March of this year the Trade Commission ruled in favor of the American HFC Coalition. (The coalition was a banded group of refrigerant manufacturers and distributors.) The duty levied against Chinese imported R-134a was set between 148.79% to 167.02%. What that means is if you bring in a Chinese cylinder at $45.00 that your cost would be $66.96 after the tariffs have been applied. ($45.00 * 1.4879 = $66.955) That price of $66.96 puts the Chinese product right in line with the US and other products in the marketplace.
  • With each passing year more and more automobiles are using 1234yf. This trend started in the European Union and now any new models in the EU are banned from using R-134a. This same type of change is coming here to the United States. The first major manufacturers to start using YF in the states started in 2013-2014. After that each year brings more models and manufacturers into the fold. Don’t believe me? Go and look under the hood of a 2018 Toyota Tundra. You’ll find a YF system in there. No more R-134a. While this slow transition won’t have much of an impact for 2018 we will begin to see the market erode out from under 134a as the time goes on.
  • One point that I want to bring up is raw materials increase on R-134a. I received an e-mail from a reader the other day. This reader showed me a notification that he received from Mexichem. This letter informed him that he would be receiving a $00.75 increase per pound on R-134a for the 2018 year. That’s $22.50 a cylinder! While this is the only notification that I have seen of this so far it very well may be across the industry. This also may be companies capitalizing on the tariff and the extra profits they can get without the Chinese imports being around.
  • Remember how I mentioned that the EU had banned R-134a to be used in newer car models? Well, the same thing is coming here folks. The EPA announced their phase out in the summer of 2015 under their ‘SNAP Rule 20,’ program. It basically said that R-134a would be unacceptable for use in new vehicles starting at the 2021 model year.  While this Rule 20 from the EPA is contested in the courts right now the rest of the world is treating these phase outs as still active and ongoing. I am going to write my prediction here assuming that the EPA’s planned phase out stands. For more information on the EPA’s phase out of R-134a click here or you can read the excerpt from their site in the bulleted points below:
    • Unacceptable as of Model Year (MY) 2021, except where allowed under a narrowed use limit through MY 2025.
    • Acceptable, subject to narrowed use limits, for vehicles exported to countries with insufficient servicing infrastructure to support other alternatives, for MY 2021 through MY 2025.
    • Unacceptable for all newly manufactured vehicles as of MY 2026.

Pricing Prediction

I’ve been doing these price prediction articles for a few years now and it has given me a unique opportunity to see the trend in pricing of R-134a over the years. Before I get into my prediction let’s take a quick look to see how the pricing has climbed over the years. Keep in mind that these prices are based off the standard 134a thirty pound cylinder and purchasing one at a time. The prices are obviously lower if you are purchasing a pallet or more.

As you can see folks the tariffs that went into effect this Spring had a huge impact on the price stability of 134a refrigerant. From 2015 to 2016 we had a little over a ten percent increase but then when we look at 2017 we see a huge fifty percent increase in end user pricing. That right there folks is that Chinese product being brought up to par with the rest of the market place. Sure, it sucks that we all end up having to pay more but the good side of this is that we now have American companies making money and a whole lot less of the Chinese product floating around here.

The good news here is that for 2018 I don’t see much of anything changing as far as price wise. The damage has already been done as you can see from the above numbers. Everyone is already feeling the impact of this new tariff but we are still too far away to feel the impact of 1234yf or the planned phase out of 134a. While there is speak of raw materials going up on 134a I don’t predict that an increase will last mainly due to the amount of competitors in the market today. So, for the 2018 marketplace on 134a I predict it to be rather stable and stay right around that $150.00 price that we can find on Amazon.com right now. Just remember that this $150 price is for individual cylinders. If you are buying in a pallet load you should be able to get twenty to thirty percent off of the basic cylinder price.

As we get closer to the 2020/2021 deadline things will begin to get interesting. I can’t wait to write this article again this time next year and to glance into the future of 2019 to see what will happen. Thanks for reading and if you haven’t already please take the time to subscribe to my mailing list in the top right corner of my pages.

R-404A Pricing

R-404A 24 pound jug cylinder
R-404A 24 pound jug cylinder

So did everyone pay a fair price on R-404A this spring and summer? Hah… I thought so. If you are like me and the rest of the world then I can guarantee that you saw a steep price rise occur on 404A towards the beginning of 2017’s season. That isn’t even mentioning the price increase that we saw in 2016 either. Well, folks I wish I had some good news for you but I think we may be in the same boat again for 2018.

This right here is why I take the time to write these articles each and every year. It’s a lot of fun to dig into the information and figure out why. Why did this price increase happen? What can we do to avoid this? Will it happen again in 2018? Let’s dive in and take a look at the facts:

Considerations

Like with any good analysis we have to look at the considerations and outside factors that will affect the price on R-404A in 2018 before we can make an attempt at an accurate price prediction for next summer. Let’s take a look:

  • There was a worldwide shortage of R-125 during the summer of 2017. For those of you who do not know R-404A is a blended refrigerant comprising of 44 percent R-125. The majority of R-125 is sourced from China and something happened over the spring and summer of 2017 that caused the shortage that we all felt in our pocket books. I spent some time researching why this happened. The most common explanation that I found is that the chemical Flurospar experienced a forty percent price increase towards the beginning of 2017. (Flurospar is a main ingredient in the R-125 refrigerant.) This price increase caused a direct effect on the price of R-125 raising it by one-hundred and thirty percent. The price increase on Flurospar was blamed on China’s strengthening of environmental laws that directly affect the mining industry. So, because China wanted to become more environmentally conscious we all paid the price.
  • A lot of people already know about the tariffs on R-134a Chinese imports. This was put in place by the International Trade Commission in the spring of 2017. What a lot of people don’t know is that there are tariffs also on imported Chinese HFC refrigerant blends, such as R-404A. R-404A is a blended refrigerant. It consists of R-125 (44 Percent), R-143a (52 percent), and R-134a. (4 percent.) These tariffs on blended refrigerants can range from 101.82% to 216.37%. (These variances depend on cost of the product at the time of import.) These tariffs were put in place in the summer of 2016 so a lot of us have already seen the affect over 2017’s summer.
  • Most of us know by now that R-404A is on it’s way out. I’ll get into the EPA’s new rules further down this list but for now let’s take a look at the viable alternatives to 404A. Because if there are alternatives then their is a path to phase out. The two main contenders that I see are:
    • The first one is R-744 or Carbon Dioxide. R-744 is widely used in the Asian markets and has been seen making an aggressive push here in the United States due to it’s baseline GWP number and the fact that the technology is already here and available to use. A lot of vending machines, ice machines, and other smaller units are beginning to come with R-744 now.
    • The big change that I see coming is the new Opteon HFO refrigerant known as XP44 or R-452A. This refrigerant is designed for commercial refrigeration and chillers. A prime example and a huge market that will be transitioning over is trucking. Earlier this year the Carrier Transicold corporation announced that they will be offering their trucks with R-452A refrigerant as well as 404A. Thermoking isn’t too far behind either.
  • Honeywell announced that they will stop selling R-404A refrigerant in the European Union next year. While this is mainly due to the EU’s F-Gas regulation it is also a huge step in showing the world that 404A is not going to be around for much longer.
  • In the summer of 2015 the EPA came out with their new SNAP Rule 20. This new rule specifically targeted HFC refrigerants and the first major HFC refrigerant targeted was R-404A. While the courts did overturn this new rule in the summer of 2017 there is now an appeal on file to reinstate the restrictions. At this time the world and I will be treating R-404A like it is being phased out. To read more about the EPA’s SNAP Rule 20 program click here or read the excerpts below. Note that R-404A will no longer be acceptable in the below applications:
    • Retrofitted supermarket systems as of July 20, 2016;
    • New supermarket systems as of Jan. 1, 2017;
    • Retrofitted remote condensing units as of July 20, 2016;
    • New remote condensing units as of Jan. 1, 2018;
    • Retrofitted vending machines as of July 20, 2016;
    • New vending machines as of Jan. 1, 2019;
    • Retrofitted stand-alone retail food refrigeration equipment as of July 20, 2016;
    • New stand-alone medium-temperature units with a compressor capacity below 2,200 Btuh and not containing a flooded evaporator as of Jan. 1, 2019;
    • New stand-alone medium-temperature units with a compressor capacity equal to or greater than 2,200 Btuh and stand-alone medium-temperature units containing a flooded evaporator as of Jan. 1, 2020; and
    • New stand-alone low-temperature units as of Jan. 1, 2020.
  • The last point that I’m going to make here before moving on is that while the approved applications for 404A are shrinking and shrinking it should be noted that the actual supply and production 404A is not being forcibly shrunk. What that means is that the government isn’t stepping in like they did with R-22 and saying that you can only produce/import X much per year. It is up to the manufacturers to balance the supply and demand with the shrinking marketplace and not the government.

Price Predictions

I’ve been doing these price prediction articles for a few years now and it has given me a unique opportunity to see the trend in pricing of R-404A over the years. Before I get into my prediction let’s take a quick look to see how the pricing has climbed over the years. Keep in mind that these prices are based off the standard 404A twenty-four pound cylinder and purchasing one at a time. The prices are obviously lower if you are purchasing a pallet or more. (Pallet pricing is about $140 a cylinder as of today.)

Those numbers are crazy. I’m not even sure where to begin. So between 2015-2016 we had a twenty percent jump. Then from 2016 to 2017 we jumped up like crazy. Eight percent price increase. This happened because of the new tariffs we discussed and also the shortage of R-125. Since the summer of 2017 prices have started to taper back down but they are still high at around $175 for a cylinder.

Here’s where I give you the bad news folks. I think we’re going to experience the same thing again next year. Once the season gets going we are still going to have to contend with all of the factors that I mentioned above. The only bright side that I can find is that Honeywell won’t be providing 404A to Europe anymore so they may have a bit of a backlog of inventory that will help keep prices from spiking too high.

My pricing prediction for the summer of 2018 R-404A is around $210.00 a cylinder. If you were to purchase a pallet of forty cylinders next summer expect to see a price in the $160s per cylinder. I wish I had better news for you folks but these numbers are what the facts all point too.

Conclusion

The question a lot of you may be asking is how can I avoid this price gouging situation during next year’s summer? Well folks, the answer is pretty simple and it’s exactly what I used to do when I purchased R-134a. Buy in bulk and buy in the dead of winter. Prices aren’t going to go any lower then they are in December and January. It’s a simple supply and demand concept. Barely any one is buying at this time and the demand is all but stopped unless your are in Phoenix.

Distributors still have numbers to meet. Sure they have their curved budgets for the summer months but they will gladly take a large sale and will be more than willing to cut you a deal so that they can get the business. Yes, you will have to sit on your inventory for a bit but think about how comfortable you will be in the summer, and if the pricing does sky rocket again you can sit back and make a ton of profit off each pound you sell while your competitors are paying sky-high prices.

R-1234YF Pricing

If you haven’t heard of 1234yf yet then I can assure you that you will soon. Especially if you have a newer car that’s out of warranty. You’ll really hear about it then when you get a leak in your system and you get that nice recharge bill.

1234yf is the latest and greatest when it comes to automotive refrigerant. This new refrigerant is designed to take the place of the HFC R-134a. 134a has been used since the early 1990’s but has since fallen out of favor with companies and governments due to it’s high Global Warming Potential. While R-134a has already been phased out in the European Union it has not quite taken hold yet in the United States. Don’t get me wrong though folks it’s coming and it has been coming since 2013-2014. The first few models to start using YF in the United States were Fiat, then Chrysler, then Ford, then Toyota, and so on and so on. Heck, the truck I want to get next year (Toyota Tundra) is using 1234yf.

My point is folks that it’s everywhere and it’s growing fast. Give it a few years and R-134a will go the way of R-12. The only people using it will be clunkers or ‘antique’ car restorers. 1234yf with it’s expensive price tag will be the only real option for automotive applications at least until Daimler perfects their R-744 systems. So, the question is what will the pricing of 1234yf do next year in 2018? Will it remain the same, climb drastically, or start to decline? Let’s dive in and find out.

Considerations

Like with any good analysis we have to look at the considerations and outside factors that will affect the price on 1234yf in 2018 before we can make an attempt at an accurate price prediction for next summer. Let’s take a look:

  • I looked around online for a recent list from this year that would display all of the cars that were using 1234yf. I couldn’t find one but I did find one from 2015 and I have to say that even back then, nearly three years ago, there were a whole host of cars and manufacturers that had begun using 1234yf. With each passing year the amount of models using 1234yf will go up and with that more and more cars on the road will be using YF refrigerant. All of this is only going to increase demand for the new HFO refrigerant.
  • While we will have that increased demand from the point I mentioned above the second point to bring up is that the two companies that make 1234yf, Honeywell and Chemours, have either opened or have broke ground on gigantic production plants here in the United States. Honeywell started building their plant a few years ago and has actually already opened their plant for business in May of this year. Their plant out of Geismar, Louisiana has now become the world’s largest site for producing 1234yf. Chemours isn’t as fast as Honeywell. They broke ground on their plant in February of this year and once their plant is finished it will triple their output potential on HFOs. Talk about an increase in supply.
  • The last point that I’m going to make before I get onto my prediction is the planned EPA phase out of the HFC R-134a. The EPA announced this phase out under their ‘SNAP Rule 20,’ program. It basically said that R-134a would be unacceptable for use in new vehicles starting at the 2021 model year.  While this Rule 20 from the EPA is contested in the courts right now the rest of the world is treating these phase outs as still active and ongoing. I am going to write my prediction here assuming that the EPA’s planned phase out stands. For more information on the EPA’s phase out of R-134a click here or you can read the excerpt from their site in the bulleted points below:
    • Unacceptable as of Model Year (MY) 2021, except where allowed under a narrowed use limit through MY 2025.
    • Acceptable, subject to narrowed use limits, for vehicles exported to countries with insufficient servicing infrastructure to support other alternatives, for MY 2021 through MY 2025.
    • Unacceptable for all newly manufactured vehicles as of MY 2026.

Pricing Predictions

I’ve been doing this price prediction articles for a few years now and it has given me a unique opportunity to see the trend in pricing of 1234yf over the years. Before I get into my prediction let’s take a quick look to see how the pricing has climbed over the years. Keep in mind that these prices are based off the standard 1234yf ten pound cylinder.

As you can see above folks the pricing on 1234yf has stayed pretty stable over the past few years. The only real increase I saw was this year and it was a very slight one at that. The price went up about ten dollars, or just over one percent. The thing to keep in mind here too is that this is the price of purchasing one ten pound cylinder. If you were to buy three, four, or even more you could easily get a price under that seven-hundred dollar mark.

Weighing the considerations I discussed above it basically boils down to will the new production facilities outweigh the demand for all of the new 1234yf vehicles on the road today? My thoughts are… yes. I believe that these new production facilities, especially Honeywell’s which has already opened, are going to increase the supply of YF refrigerant substantially and we could be looking at a lower price for 2018.

As time goes on and we get closer and closer to that 2020 (2021 Model Year) date for R-134a to go away we will definitely begin to see the price of 1234yf climb. More and more manufacturers will be using the new refrigerant the demand will be climbing and climbing.

As far as my prediction for 2018 I think we’ll see a slight decrease in pricing from where it’s at today for individual cylinders. With the new plant operating here in the states and another one set to open soon I think we’ll see prices go down about two to three percent in 2018. My predicted price is $690.00 for a ten pound cylinder of 1234yf.

Conclusion

Well folks that about covers it. I feel like this covers the most popular refrigerants on the market today but if you feel that I missed something or got something wrong then please do not hesitate to reach out to me with your feedback.

Thanks for reading,

Alec Johnson

RefrigerantHQ

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