Pricing Prediction

2019 1234yf Refrigerant Pricing Predictions

Fall is here and winter is just around the corner. This is my favorite time of year as all of the trees have already changed and it makes just a simple walk outside a beautiful experience. On top of that, my son is due any day now and the whole family is getting excited. Over the past few weeks here at RefrigerantHQ we have been doing our Pricing Prediction articles on various refrigerants for 2019. Today we will be focusing on the newer HFO refrigerant known as R-1234yf .

1234yf is the refrigerant that is intended to replace R-134a in automotive applications. Over in the European Union R-134a has been banned from new models since 2015. Ever since then they have been moving forward with 1234yf. While things move quite a bit slower here in the United States, the market is still trending towards yf. When I wrote this article last year everyone in the industry was still expecting R-134a to be phased down by the year 2020. The EPA had issued a rule stating that any vehicles from 2021 model year could no longer use R-134a. The likely substitute was 1234yf. So while the conversion over to yf has been slow, manufacturers wouldn’t have a choice when that 2020 year hit.

Now however, things have changed. The EPA’s rule was overturned and now there is no definite end in sight when R-134a will be discontinued. While there are a few States that have moved forward with their own HFC laws I do not know if it’s enough to incentivise car manufacturers to make the switch to yf. We are now at a crossroads when it comes to R-134a and R-1234yf. Will manufacturers switch, will more States come on board to phase down HFCs, or will the Federal Government step in and come out with a new law or a new set of regulations?

Considerations

Like with any analysis it is always wise to review certain factors that could affect the price for next year. After all, if you don’t look at the facts it’s not a prediction. It’s more of a guess. I have already mentioned one of these factors previously, but there are other factors out there and these could all affect the price on 1234yf next year. Let’s take a look:

  • I’ve read a few reports from different sources but the consensus that I received was that most cars will not need an air conditioning repair for at least five or six years after purchase. What that means is that we really haven’t seen the brunt of 1234yf demand yet. All of the cars using this new refrigerant are only a few years old. Even if we go back to some of the first models to use yf we are only going back to 2014 or 2015. The demand is still quite low just because there hasn’t been a need for repairs… yet. As these vehicles age things will break and yf will be needed for air conditioning repairs.
  • Tying right into the low demand of yf refrigerant is the situation that we mentioned earlier in the article. The EPA’s Rule 20 was overturned by the courts and now there is no definite date on when R-134a will be phased down. Many companies were expecting a large uptick in demand when that 2020 year hit due to manufacturers being forced to change, but now that mandate is gone. Will every vehicle manufacturer switch over to yf? And, if so, then when will they? Will it be by that 2020 date or could it be five or ten years down the road?
  • The overturning of this EPA Rule 20 is most likely going to keep the demand for yf down for another year or two. I found a great image from a website called, ‘VehicleServicePros,’ that lists all of the OE manufacturers that are using yf and how many models they are using it for. See below image and click here source of image from VehicleServicePros.
    • Vehicle Service Pros' 1234yf Chart
      CREDIT TO: Vehicle Service Pros’ 1234yf Chart
    • This above chart was from the spring of 2018, so while more may have changed it still gives a good representation. The good news is that based from the image there are quite a bit of OEs embracing 1234yf. GMC for example has eighty-three percent of their new models using yf and Honda is close behind with seventy-eight percent of their models.
  • Honeywell and Chemours both invested a significant amount of money into opening two new 1234yf plants, one in Texas and one in Louisiana. Both of these plants allow these companies to accommodate the increased supply of yf. These plants were also built before the EPA’s Rule 20 was overturned and now they may be a bit overkill. Either way, I see these plants satisfying demand in the near future.
  • There is talk from the EPA that they may be removing the refrigerant sales restrictions for HFCs. While this is just conjecture at this point it would be interesting to see if this does happen if 1234yf will be included in this list of refrigerants. If it is, then anyone can begin purchasing cylinders of 1234yf without a certification required. If this happens then we could see a rise in price as the demand from do-it-yourselfers grows.
  • The last point I want to make before moving to our 2019 prediction is that the price of 1234yf has been VERY stable over the past few years. For the past three years the refrigerant has hovered between six-hundred and ninety dollars to seven-hundred and ten dollars for a ten pound cylinder. I haven’t seen this swing one way or the other over the years. My contacts within the industry have stated the same, the pricing isn’t moving.

Predictions

Last year when I wrote my 2018 yf predictions I ended the article stating that the refrigerant would be priced at around six-hundred and ninety dollars for a ten pound cylinder. And, lo and behold, today it is right around that price. I’m not going to brag though folks as this was an easy prediction. Like I said before, the price has been VERY stable over the years.

As far as what will happen next year I am going to again predict a slight decrease in pricing. This is due to the R-134a being around for a while longer, vehicles with 1234yf are still too new for major repairs, and just the overall stability of the price. The biggest question mark is what will happen to R-134a. If 134a does go away soon then the price on yf will rise and rise fast as there will be no other options out there. (Maybe R-744, but that’s still in early stages.) While a plan may emerge from the EPA in 2019 or even late this year, the implementation of the plan will still be years out and I do not feel we will see a pricing impact in 2019.

Our prediction on 1234yf pricing in 2019 is about six-hundred and seventy dollars for a ten pound cylinder. That equals out to about sixty-seven dollars a pound. Time will tell if I am right, but with how this pricing has been I can’t be too far off!

Conclusion

Please note folks that this article is intended for informational purposes only. This is one man’s opinion on what will occur for 1234yf pricing. It is a prediction and only that. We are not liable for any monies gained or lost based off of this information. Also, if you have any ideas for articles, feedback, or suggestions please feel free to contact us by clicking here.

Thanks for reading,

Alec Johnson

RefrigerantHQ

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