Predictions

Greetings folks! Another month is nearly wrapped up and we are slowly inching towards spring. We’ve got a few more hard weeks here in Kansas but I’m looking forward to the day when I can start planting some trees.

I’m writing this article today as I was informed of more volatility in refrigerant pricing. Even though we’re only two months in, 2019 is certainty turning out to be an interesting year. In late fall early winter I always take the time to do my refrigerant pricing prediction articles. In these articles I do my best to predict what prices will be the following year by weighing a variety of factors and considerations. Some years I miss and other years I hit the mark. It looks like this year is going to be a miss.

Towards the beginning of January a notification went out to various refrigerant distributors from two refrigerant manufacturers. I cannot and will not names here, but the notification stated that there would be a six percent increase on your everyday refrigerant including R-134a, R-410A, and R-22. I had assumed that this increase would be the start of a trend of upward momentum for the year. I was wrong, very wrong.

Pricing

What surprised me is that prices are going down and down. They are at levels I haven’t seen in years. Let’s take a look:

R-134A – Thirty Pound Cylinder Pricing:

  • Fall 2017 – $140
  • Fall 2018 – $85
  • Jan 2019 – $88
  • Feb 2019 – $70

Most people had thought we had reached the bottom of the barrel when it came to R-134a pricing. This was especially the case when that notification was sent out in January stating that prices were going up. People were used to paying around $90-$100 a cylinder.

This new price of $70 is the lowest I have seen in years. In fact it’s close to where it was when I used to buy R-134a in bulk back in 2008. Back then I was paying around $61-$65… but that was before tariffs. I am really amazed to see the price back to almost pre-tariff levels. Who knows how much lower it will go.

R-410A – Twenty-Five Pound Cylinder Pricing:

  • Fall 2017 – $140
  • Fall 2018 – $65
  • Jan 2019 – $68
  • Feb 2019 – $56

Just like R-134a, R-410A is going down and down. At this point it’s difficult to forecast what will happen. I honestly don’t know folks. Will we keep going down, or will we start creep back up as the summer season sets in?

R-22 – Thirty Pound Cylinder Pricing:

  • Fall 2017 – $550
  • Fall 2018 – $350
  • Jan 2019 – $410
  • Feb 2019 – $300 or Under

Obviously, the big story here is R-22. There are only ten months left until R-22 is completely phased out across the United States (January 1st, 2020). Everyone had assumed that the price would go up and up as we approached closer to that deadline. What actually happened is that we saw a spike in pricing hit in the summer of 2017. At certain points it was $600-$700 a cylinder. However, in 2018 the price started to go down and down.

There could be a resurgence in pricing as the summer season sets in and people began to realize that R-22 will be going away. But, we may also have just too much overstock in the market place which is causing prices to stay low.

Conclusion

The refrigerant market is anything but stable this year folks. It is tough to tell when the right time to buy is. You don’t want to get stuck with overpriced product but you also want the opportunity to buy low and sell high. Time will only tell. It’s as much as a guessing game for you as it is for me.

If you are interested in purchasing refrigerant please check out our bulk refrigerants page by clicking here.  We are partnered with one of the leading distributors in the country and will get you a competitive price in today’s marketplace.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Pricing Prediction

Earlier this morning it was snowing here in Kansas City. It wasn’t anything major like the weather forecasters would have you believe, but there was still enough to accumulate and to slow down traffic. Luckily, I didn’t have work today and was able to stay home anyways. As I sipped on some hot cocoa I stared out the living room window at the corn field across the street. I could see the snow falling and as the snow fell I began to think about refrigerant. Yes, you heard me right. Refrigerant. It is something I think about daily and today was no different. I began to think about what the refrigerant market will be doing next year in the United States. What refrigerants will be going up? What will be going down? Which ones will be remaining the same? What possible surprises are there that could be coming down the pipeline?

In this article we are going to go through each of the most popular refrigerants and what our predicted price for those refrigerants will be in 2019. We will cover R-22, R-410A, R-404A, R-134a, and R-1234yf. More often then not, if you have an air conditioner or refrigerant system the chances are you are using one of the refrigerants we just mentioned. However, if you find that there is a refrigerant that is coming up again and again and we haven’t mentioned please reach out to me so that I can research it and hopefully include in next year’s article.

I will preface this article that this will be rather long as we will be covering each of these refrigerants in depth. If you wish to skip ahead and just read on a specific refrigerant please click the below link for the refrigerant you wish to read about. Otherwise, read on my friends, read on.

R-22 Refrigerant Prediction

As most of you know next year is the last hurrah for the HCFC R-22 refrigerant. This is due to the phase out coordinated by the Environmental Protection Agency. This phase out started back in 2010 by preventing any new appliances from using R-22. Then, as the years passed the import and production restrictions set in. The January 1st, 2020 date that is quickly approaching (Only fourteen months away) is the last straw. On this date there will be NO production or importation of R-22. That’s it. Finis.

R-22 Refrigerant 30 pound jug.

What that means is there will only be two future sources of R-22 refrigerant for consumers. The first is the backlog of inventory on the market. This is all the inventory that companies bought up on in prediction of this looming 2020 deadline. The other source is whats known as refrigerant reclamation. I won’t get into it too much here but reclamation is taking previously used dirty R-22 refrigerant and putting it through a certified refurbishing process. I’m an automotive guy and I see this reclaimed R-22 just like I see a remanufactured part. You get that savings, but you also get that understanding that it was previously used in a different application. Personally, I have no problem with buying reman or buying reclaimed refrigerant. If it goes through a certified EPA process, what’s the worry?

Now, there is a third option out there that a lot of you may already be familiar with. Alternatives to R-22. There is a whole market out there dedicated to alternative refrigerants for R-22 applications. They could be a drop-in replacement or it could be retrofit. The point of these refrigerants is to give consumers a choice, and a lot of times save the customer money. There were times where the price of R-22 went through the roof and alternatives began to take off. But now that the price has begun to crash the alternative market has begun to shrink as well.

Past & Present

To fully understand the R-22 market and what we predict it will do next year we first have to look at the past and the present. No, this isn’t a Charles Dickens novel. Along with the 2010 and 2020 dates another big part of the R-22 phase out occurred in 2015. This is where production and import limits were shrunk. This sudden loss of supply caused the price to climb and climb. In the summer of 2017 the price had gone over seven-hundred dollars for a thirty pound cylinder. Seven-hundred dollars. That’s twenty-three dollars a pound.

Over these years companies and investors watched the price of R-22 go up and up. Some of the lucky ones bought up in 2014 and 2015 and held onto it when that high price hit. Others thought that the price was going to keep going higher. So, they bought. They bought with the hope of the price reaching eight-hundred, nine-hundred, maybe even over a thousand a cylinder. This wasn’t unheard of. Back in the 1990’s when R-12 was phased out there were times where it did reach one-thousand a cylinder. (Nowadays it’s about six-hundred a cylinder.) The problem is that this buy up was a gamble. No one truly knew what was going to happen. Would the price continue to climb as it did in 2016 and 2017? Or, would it began to settle back down and level off?

2018

What actually happened in 2018 was quite unexpected. Many people thought the price would go down and level off, but no one predicted that the price was going to be cut in half. Yes, in half. The price for R-22 in 2018 was slashed by fifty percent. That seven-hundred dollar price is now three-hundred and fifty. Actually, it’s even lower then that. Depending on how much you buy you could get cylinders for as low as three-hundred and twenty-five dollars.

While contractors and consumers were rejoicing at this price drop there were many distributors panicking. Those guys who thought they were making a good gamble back in 2016 and 2017 are now stuck with a high priced product in a low priced market. One extreme example of this is Hudson Technologies. Hudson is a refrigerant distribution company based out of New York and they bought up A LOT of R-22 refrigerant during 2016-2017.

The graphic below is from Google but it provides a great illustration of the rise and fall of R-22 pricing. At the peak of R-22 pricing in summer of 2017 we saw a stock price of $9.30. Now, a little over a year later and with the price of R-22 more then cut in half we now see a stock price of $0.84. That is a HUGE drop. On top of the stock value loss Hudson also wrote off fourteen million dollars of R-22 inventory in their second quarter. Keep in mind too that the fourteen million is NOT all of their R-22 inventory. No, that is a cost adjustment so that they can be more competitive in the market place.

Hudson Stock 10/16/2018
Hudson Stock 10/16/2018

The Why?

Before writing this article I talked to a few leaders in the refrigerant industry to get their thoughts on what exactly happened here. The consensus that I received was that R-22 has a price ceiling. There is only so high it can go. If it goes above that point, like it did in 2017, then the lower priced alternative refrigerants began to take over the market.

If you think about it it makes perfect sense. Would you buy a generic product if the brand name was right about the same price? Of course not. But, if that brand kept going up and up in price then that generic product begins to look more and more appealing. Along with the price going too high for R-22 due to speculation and over purchasing by distributors we also have to consider that the number of R-22 alternatives on the market today have exploded. I won’t list them all here but a few of the most popular ones are Chemour’s MO99 and Bluon’s XTD-20. Along with the amount of choices out there these alternative suppliers have also made it easy by offering drop-in or near drop-in replacement products.

The good news though for your R-22 investors is that as the price of R-22 goes back down the demand for alternatives will began to erode. It’s a balancing act that a lot of folks found out the hard way.

2019 R-22 Considerations

Ok folks, so now we’ve gone through what’s happened over the past few years when it comes to R-22. Now it’s time to take a look at what considerations I will be taking into account for my prediction for 2019. In my day job I am a software analyst. I look at the details of a program or problem and figure it out through careful analysis. I love digging into the details like that. I take the same approach here when it comes to my prediction.

My predicted price for R-22 next year is based off of these specific considerations:

  • The price was cut by fifty percent this year and many people say that it can’t go lower.
  • The ‘newest’ R-22 machine is from 2010 or earlier. So, that puts the machine at nearly nine years old. A typical home’s air conditioner lasts between ten to fifteen years. Some of these R-22 will start to be replaced with R-410A. This will shrink demand and lower price.
  • When we hit 2019 there will be less then a year before total phase out of R-22 begins. This could drive price higher due to people wanting to buy before the cut-off.
  • In my opinion the market is saturated. Too many people have bought too much R-22 and now with this price drop they are just trying to offload, take the write-off, and be done. This can keep prices low.
  • There is a refrigerant reclamation industry but I honestly don’t see this having much impact until at least 2021 or 2022. Unfortunately, most folks won’t go the reclamation route until it’s a last resort and with the over supply of R-22 on the market I don’t see reclamation making much of a dent.
  • The last factor is the alternative refrigerants. As I mentioned above these refrigerants are in a careful balancing act with the price of R-22. If R-22 goes too high then the alternatives take over and cause the R-22 price to shrink back down. I foresee these alternatives contributing to a lower R-22 price.

R-22 Prediction

From my conversations within the industry it seems to be that the ‘sweet spot’ for R-22 is right under five-hundred dollars a thirty pound cylinder. That price allows consumers to still purchase the refrigerant without everyone running towards the cheaper alternatives. If that five-hundred target doesn’t happen then I have seen others state that between four-hundred and four-hundred and fifty a cylinder is enough to deter alternatives and still make a profit. This price is what the distributors want, but what will actually happen?

As far as what will occur next year, it’s tough to say. My prediction is that we will see this very low price of around three-hundred and thirty a cylinder maintain throughout the winter months of 2018/2019. Then, as we inch closer to spring I expect to see a slow uptick in pricing. When we get into spring, say April or May, we could see R-22 prices at around three-hundred and sixty to three-hundred and seventy-five dollars a cylinder.

Moving into summer I could see prices climb upwards to four-hundred dollars. The absolute highest I see is four-hundred and twenty-five a cylinder and that would be at the peak of summer. As summer wanes and the fall begins to set in I could see price of R-22 maintaining right around that four-hundred to four-hundred and twenty-five dollar price. This price will continue onwards until we hit that January 1st, 2020 deadline. From here it’s hard to say. Will the price stay flat, or will it rise slightly? Time will tell.

R-410A Refrigerant Prediction

Most everyone’s mind has been on R-22 and what’s going to happen next year with the 2020 phase out deadline. With all of this change it is easy to forget about Puron, but the 410A market share is only growing and it’s pricing impacts can have a substantial effect on contractors and consumers. After all, R-22 is on it’s last legs and it is not going to be around much longer. Sure there are other alternative refrigerants out there but like it or not R-410A is the king right now.

R-410A Refrigerant 25 Lb Cylinder
R-410A Refrigerant 25 Lb Cylinder

Looking back at my prediction on R-410A from last year I have to say that I was way off. I had predicted a 2018 summer price at around two-hundred dollars per twenty-five pound cylinder. While that may have sounded crazy, we should consider what we saw in the 2017. Last year there was a shortage in the chemical known as Flurospar. Flurospar is a key ingredient in fluorinated refrigerants like R-125. (R-410A is a fifty percent mixture of R-125 and R-32.) This shortage of Flurospar created a rippled effect on the supply chain and caused the price of 410A to skyrocket over the summer season and into the fall and of 2017. Last year’s prediction was based off of that pricing trend. I assumed that the shortage would continue. That is where I came up with my two-hundred dollars a cylinder number.

What actually happened was quite different. In the early months of 2018 the price per cylinder was around ninety dollars per twenty-five pound cylinder. It had come down quite a bit from the previous summer’s price. What was surprising though was that the price kept on going down even as we got into the hotter months. Usually as the summer months come we see a slight or large increase in refrigerant pricing due to the increased demand. This year however we saw the opposite. The price for a R-410A cylinder dropped by near twenty-five dollars. It went from around ninety dollars to sixty-five. That is nearly a thirty percent dip in price. One of our distribution contacts stated that R-410A was more volatile then R-134a this year. That is quite the change as R-134a is usually all over the place.

The question now though folks is what will the pricing do next year? Will R-410A keep going lower? Will it stay put? Or, will we see it climb back to the higher priced levels that most of are used to?

Considerations

I love doing analysis. It is what I do at my day job and it is why I write these kinds of articles. It can be fun to dig into the details and all of the factors that can affect pricing. When doing a pricing analysis like this I like to first provide the reader what considerations that I took and reviewed to come up with my pricing prediction. These help the reader understand my point of view and where I am coming from. Let’s take a look at some of them now:

Flurospar Shortage

I mentioned this earlier in our previous section. If we travel back about eighteen months ago this was a HUGE deal. The majority of the world’s Flurospar comes with mines in China. During the spring and summer of 2017 there were governmental regulation changes that affected the efficiency and overall output of the mines. This lower output is what accounted for the world’s shortage. In my previous analysis I assumed this shortage would carry into 2018, but I was incorrect. Will we see a shortage though in 2019? It is impossible to say. The only thing I can point to is the overall stability of the Flurospar market over the past year.

Chinese Refrigerant Imports

Back in 2016 there was an anti-dumping tariff instigated against Chinese HFC refrigerant blends. Included in this tariff was R-410A. I won’t get into all of the details here, but essentially there was a tariff put on R-410A. (For more information on the tariff click here to be taken to TheCoolingPost.) Here’s the thing though folks, this tariff was installed on ONLY the R-410A blended refrigerant and NOT the components of the blend. In other words R-410A was taxed but R-125 and R-32 was not. Doesn’t make much sense if you ask me.

Refrigerant distributors took advantage of this loophole and began importing mass quantities of R-125 and R-32. Once imported they would then blend the refrigerants in their own facility. The dumping of cheap HFC refrigerants continued. This mass import of Chinese product has attributed to the much lower cost of R-410A that we are seeing today.

Trump & His Tariffs

Most of the country has felt the effects of the various tariffs that the Trump Administration has issued over the past year. This could either be through your employer or just paying for basic things. In my day job I had to travel to Belgium a few months back to work with our corporate office. The reason for the trip? Trump’s Tariffs and how to enact them throughout the company. Whatever your politics are, we can definitely say that these tariffs have had an impact. Refrigerant, for the most part, has been left unscathed on these tariffs. With all of these imports coming from China though, how long is it before a tariff is enacted? What if one is enforced on R-125? How will that effect the marketplace? Inevitably it will lead to higher prices, but how much?

R-410A & Reclamation

With the end of R-22 coming in just about fourteen months the industry will be relying more and more on refrigerant reclaimers. These reclamation facilities can process this used R-22 refrigerant, clean it, and then issue it back out into the world for reuse. This is the ONLY way for ‘new’ R-22 to be found after that January 1st, 2020 deadline. Remember, once the stockpiles of R-22 run out reclamation is all that is left.

Why am I talking about R-22? Well reclamation for R-22 is key for having a stable supply. With R-410A it is quite different. Reclaiming R-410A refrigerant, at least at this time, is not feasible. There is no profit in it. I was discussing this very matter with Chad Schnuelle of Refrigerant Inc just today. He stated that:

It is too cheap to sell reclaimed R-410A in the market and make a decent margin because of the fractionating factors. It’s a two component refrigerant blend of R32 and R125 with a 50/50 mix ratio. If there is a leak in a system one component bleeds off faster than the other. This means we have to add that component back in to get the 50/50 blend once we reclaim it.

So a reclaimed R-410A refrigerant actually has new refrigerant in it. This adds an extra layer of cost. Having that extra cost and then trying to compete with virgin R-410A at the rock bottom prices it is right now is nearly impossible. If the price of R-410A begins to rise, or if we get new tariffs instated like we mentioned above then the possibility of more reclaimed on R-410A market is there, but for now it remains out of reach.

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-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. The prices are obviously lower if you are purchasing larger quantities.

  • 2015 – $90.00 – Source
  • 2016 – $100.00 – Source
  • 2017 – $150.00 – Source
  • 2018 – $90.00 (Winter)
  • 2018 – $65.00 (Summer/Fall)
  • 2018 – $80-$90 (Retail on E-Bay.)

Looking at the above numbers we can really begin to see the deep dive in pricing that occurred this year. There was a time where a price between ninety to one-hundred dollars was pretty standard no matter what season it was. Now with today’s dirt cheap price of around sixty-five dollars a cylinder it is tough to say what will happen next. In an effort to help myself with this prediction I reached out to a few refrigerant distributors before writing this article. I wanted to know what they thought of the market this year and what they thought next year would bring. Each of them said more or less the same thing. Prices will be low, but stable. In other words folks, this sixty-five dollars price per twenty-five pound cylinder is here to stay at least for 2019.

That’s right, our thoughts for 2019 R-410A pricing is the exact same price it is today. Last year I high balled it and got burnt so this year I am going to play it safe and take the advice of our distributors. Our official prediction is that the price will hover between sixty-five dollars to seventy-five dollars a cylinder. There will be some moving back and forth due to seasonality and all of that but for the most part the price will be stable. At this time the only wildcard that I know of is if Trump adds a tariff on R-410A or one of it’s components. If this happens then the pricing point is anyone’s guess.

R-134a Refrigerant Prediction

It may seem strange to have a favorite refrigerant, but I have to say folks that R-134a is it. 134a is how I got my start in the refrigerant industry back in 2007. Back then I was a corporate purchaser in charge of buying R-134a for the company’s various dealerships. My job was to figure out what dealers needed it, how much they needed, and what the market was doing on price.

R-134a Refrigerant
R-134a Refrigerant

The goal was to send a purchase order at just the right time to just the right vendor. If done right then the dealer I bought for would have an aggressively priced product in a very competitive market. If done incorrectly then my dealer could end up priced out of the market or they could end up with a surplus of inventory that sits on the shelf as the price goes down and down.

Doing this job allowed me to reach out to quite a few folks in the industry. I got to know them and I even got a few ties from Refron back when they were still a thing. (They were bought by Airgas and Airgas was bought by Hudson.) Because of all of this history I have with R-134a it is hands down my favorite refrigerant.

Last week when I was writing my R-22 pricing prediction article I had a lot of feedback and thoughts from various people within the industry on what they thought would happen. R-22 is the hot topic nowadays. I attempted to get some similar feedback for R-134a and while I got some the enthusiasm was much lighter.

In this article we’re going to take a look at what the market did this year on R-134a and what we can expect for next year. That being said, R-134a is a very volatile refrigerant and it can be difficult to predict what will happen. I remember in one year I saw the price go from sixty dollars a cylinder up to two-hundred and twenty a cylinder. You just never really know what will happen.

Considerations

As I’ve mentioned in the past I am an analyst by trade and you cannot be an analyst without the proper facts and data. I take the same approach when it comes to looking at refrigerant pricing. Because of that, I like to take into account specific considerations before we move onto the pricing prediction part of our article. Let’s take a look:

  • R-134a Pricing Volatility
    • I mentioned this briefly in our previous section but it’s worth touching on it again. The pricing on R-134a can change on a whim. I had one of my contacts within the industry even say that it’s impossible to predict. That didn’t give me much confidence in this article, but I’m still going to go through the work here and give everyone my two cents.
  • The EPA’s SNAP Rule 20 was Overturned
    • The EPA’s SNAP Rule 20 was a rule introduced back in 2015 that aimed at phasing down HFC refrigerants. R-134a’s mandatory phase down was to occur in the year 2o20. (2021 model year) This ruling was overturned in the summer of last year and there were a series of appeals. Eventually though the EPA realized that it wasn’t going to happen and they rescinded their SNAP Rule 20. That means that the 2020 year deadline for vehicles using R-134a was now gone… well sort of.
  • States With Their Own HFC Phase Downs
    • When it was realized that the EPA’s country wide phase down of HFC refrigerants wasn’t going to happen a number of States decided to take matters into their own hands. They were going to emulate the EPA’s now defunct SNAP Rule 20 and have their own State-Wide HFC phase down. California started this but we have had four other States follow suit. Many more may be joining this coalition of States soon. These States are large and account for a high amount of the Nation’s GDP. Trust me when I say that vehicle manufacturers are watching these developments closely.
  • More and More Vehicles are Using 1234yf
    • R-134a is a dying brand of refrigerant. Just like it’s predecessor R-12, R-134a is going away. Rather it is through mandatory phase out or just by companies switching to the new HFO refrigerant 1234yf. However it happens you should know that it IS happening. Vehicle manufacturers want to be on the right side of history and they want to have one process over many. Having their vehicles take 1234yf is a much easier solution. Each year that passes we have more and more cars on the road that are using 1234yf. That means less demand for R-134a which could in turn lower the pricing.
  • R-134a Added to the Refrigerant Sales Restriction
    • The biggest change this year on R-134a wasn’t all of the court cases going back and forth. No, as far as pricing wise I believe the biggest change was the introduction of R-134a to the EPA’s Refrigerant Sales Restriction. In the past anybody could buy a cylinder of R-134a from Sams or Wal-Mart. However, as of January 1st, 2018 you could no longer buy cylinders of R-134a unless you were 609 certified with the EPA. That meant that all of the do-it-yourselfers and the hoarders of automotive supplies could no longer purchase R-134a. (Well they could, but only in small pound quantities.) This decrease in demand could have lessened the price over this 2018 year.

Pricing Prediction

Ok folks so now that we have a clear picture on what’s happening with R-134a we can now begin to give a prediction on what the pricing will look like next year. First though let’s take a look at what happened this year.

Around January of last year I wrote a similar article on R-134a. At the time of writing the article R-134a was a just hair over one-hundred dollars a cylinder. Depending on where you looked at you could find a range between one-hundred to one-hundred and ten dollars a cylinder. This pricing was wholesale. What that means is that in order to obtain this price back then you had to buy around a pallet at a time. (A pallet of refrigerant is around forty cylinders.) The resale price at this time was right around one-hundred and fifty a cylinder upwards to one-hundred and seventy dollars.

The prices today, ten months later, have gone down a bit. Instead of seeing wholesale pallet prices at around one-hundred we are seeing between eighty and ninety dollars. So, about a ten percent drop. I would attribute this drop due to the Refrigerant Sales Restriction we mentioned earlier. On the retail side of things we’re looking right about the same price level as before: One-hundred and fifty dollars. If we look at Ebay.com today we can see quite a few cylinders right around that same price.

So, the question now is what’s next? What will happen for 2019? Truth be told I don’t see much changing for the next year. I feel like the popularity of 1234yf still hasn’t quite reached it’s peak yet and there are still so many vehicles on the road taking R-134a. There is talk from the Trump Administration on removing the Refrigerant Sales Restriction on R-134a. If that happens then we could see prices rise an additional ten to fifteen percent.

If I was to guess I would say we’re going to hover right around ninety to one-hundred dollars for most of next year. We will most likely see the eighty to ninety dollar price for the rest of this year and earlier winter of next year but as the season begins to warm up and the demand comes back we should see the price tick up to that ninety to one-hundred dollar range. And, if the sales restriction goes away maybe slightly over one-hundred dollars.

R-1234yf Refrigerant Prediction

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

R-134yf
R-134yf

-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!

R-404A Refrigerant Prediction

Last year in our 2018 prediction article we said that prices would be around one-hundred and sixty dollars a cylinder. Well folks, just like we were with R-410A… we were way off again. Today the price on a pallet of 404A is between eighty to ninety dollars a cylinder. So, the cost is about half of what I predicted it would be. This just goes to show you how much of a guessing game this all is. Again, like with R-410A, our increased cost prediction came from the shortage of Flurospar that we saw in the spring of 2017. For those that do not know, Flurospar is a key ingredient when manufacturing the refrigerant R-125 and R-125 is a key ingredient in the blended refrigerant R-404A. (R-404A is a blend of R-125, R-143a, and R-134a.) So, when Flurospar prices go up so does the cost of R-404A. Back in 2017 the shortage occurred due to environmental regulation changes in China. This was a one time change and the industry needed to adapt. For now, the market seems to have adjusted and the shortage has come to an end.

The question now though folks is what will the pricing do next year? Will R-404A keep going lower? Will it stay put? Or, will we see it climb back to the higher priced levels that most of are used to?

Considerations

I’ve mentioned this countless times before, but when I do a prediction article I like to take into consideration certain factors. I don’t like to just throw a dart on the board. No, instead I like to do an analysis and take a look at the marketplace. Once we determine these factors we can then determine what the market will do. Or, at the minimum, we can provide an educated guess. For those of you who read my R-410A prediction article you may notice that some of these considerations are the same for R-404A. That is by design folks. Remember, that R-125 is a key ingredient in both refrigerants. The key difference is that 410A is much more popular then 404A and that 404A is one of the first global targeted refrigerants to be phased down.

Let’s take a look at some of the considerations that can affect the R-404A price next year.

Repeal of EPA’s SNAP Rule 20

I’ve written about this extensively over the past few months, but in August of last year a Federal Court overturned the EPA’s planned phase down of HFC refrigerants across the country. While there were many appeals done over the past year each one of them has failed. That includes an appeal to the Supreme Court. What we are left with now is a patchwork of States putting together their own HFC phase downs. The reason I mention this as a consideration is that R-404A was one of the first targeted HFCs to be phased down. This is due to the extremely high GWP of 404A. (Three-thousand nine-hundred and twenty-two.) Most everyone was expecting the 404A phase downs to begin very soon, but now everything is in question and that can cause price instability.

Flurospar Shortage

I mentioned this earlier in our previous section. If we travel back about eighteen months ago this was a HUGE deal. The majority of the world’s Flurospar comes with mines in China. During the spring and summer of 2017 there were governmental regulation changes that affected the efficiency and overall output of the mines. This lower output is what accounted for the world’s shortage. In my previous analysis I assumed this shortage would carry into 2018, but I was incorrect. Will we see a shortage though in 2019? It is impossible to say. The only thing I can point to is the overall stability of the Flurospar market over the past year.

Chinese Refrigerant Imports

Back in 2016 there was an anti-dumping tariff instigated against Chinese HFC refrigerant blends. Included in this tariff was R-404A. I won’t get into all of the details here, but essentially there was a tariff put on R-404A. (For more information on the tariff click here to be taken to TheCoolingPost.) Here’s the thing though folks, this tariff was installed on ONLY the R-404A blended refrigerant and NOT the components of the blend. In other words R-404A was taxed but R-125, R-143a, and R-134a was not. (Well, R-134a was taxed, but through a different tariff.)

Refrigerant distributors took advantage of this loophole and began importing mass quantities of R-125. Once imported they would then blend the refrigerants in their own facility. The dumping of cheap HFC refrigerants continued. This mass import of Chinese product has attributed to the lower cost of R-404A that we are seeing today. Tom Lenz of Lenz Sales & Distribution said,

The price on 404A has been relatively stable over the past few months. Most of the time it stays right above 410A at around fifteen to twenty dollars higher. (A cylinder) Some distributors mix in house while others buy in bulk from China.

Trump & His Tariffs

Most of the country has felt the effects of the various tariffs that the Trump Administration has issued over the past year. This could either be through your employer or just paying for basic things. In my day job I had to travel to Belgium a few months back to work with our corporate office. The reason for the trip? Trump’s Tariffs and how to enact them throughout the company. Whatever your politics are, we can definitely say that these tariffs have had an impact. Refrigerant, for the most part, has been left unscathed on these tariffs. With all of these imports coming from China though, how long is it before a tariff is enacted? What if one is enforced on R-125? How will that effect the marketplace? Inevitably it will lead to higher prices, but how much?

Prediction

I’ve been doing these refrigerant pricing articles for nearly four years now and over those years I have been able to gather a historical pricing tracker on R-404A. This tracker allows us to see trends and possibly what’s to come next.

  • 2015 – $90.00 – Source
  • 2016 – $110.00 – Source
  • 2017 – $200.00 – Source
  • 2017 (Winter) – $175.00  – (Ebay.com)
  • 2018 (Fall/Winter) – $80-90 a cylinder.
  • 2018 (Fall/Winter) Retail – $150.00 – (Ebay.com)

Our previous articles had focused more on the retail side of pricing as you can see from the above historical records. However, this year I wanted to focus more on wholesale pricing. That is why I included the $80-$90 a cylinder section for 2018. The question now on everyone’s mind is what will 404A do next year? Like with my other articles I have consulted with experts and distributors within the industry for their thoughts. The consensus that I received was that the price would remain relatively stable over this winter and into the summer of next year. The only wildcard out there that I am aware of are Trump’s Tariffs. If he installs a tariff on refrigerants, say R-125, we could see price rise substantially. If no tariffs are instigated then I could see the price remain stable.

Our prediction on R-404A next year is right around the same price we have today between eighty to ninety dollars for a twenty-four pound cylinder.  The market should remain stable throughout next year, especially due to the EPA’s Rule 20 being rescinded. Chad Schnuelle of Refrigerants Inc said,

It seems that 404 has been rather stable for the past two years. I checked my purchase history and it has not moved over twenty dollars per 24lb cylinder since January of 2017. Again, I feel the Chinese market still dictates the USA market. In my opinion I feel the only factor that may change the price will be if refrigerants are added to the Trump tax.

Conclusion

I want to close this article by stating that these were predictions and that they are just that, a guess. No one knows for sure what will happen to the refrigerant market next year and if they say they do then they’re lying. It’s a complete guessing game. I can only provide my analysis on the matter and go from there. Lastly, I want to mention that this is one man’s analysis on the market. We here at RefrigerantHQ are not liable for any business losses or gains when it comes to buying and selling refrigerant. That is solely on you and your business.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Owner

Pricing Prediction

Here it is in the middle of November and we’ve already had two snow storms here in Kansas City. As I write this article this morning the snow is still coming down. Luckily, I have the day off and am able to stay inside and watch the snow fall. Over the past few weeks here at RefrigerantHQ we have been focusing on our refrigerant prediction articles for the 2019 year. Most everyone was interested in our R-22 thoughts, and a bit of you read the 410A. I know that R-404A is a smaller market, but it still has it’s uses and is still kept the back of a technician’s van… even if it’s going to be phased out soon.

Last year in our 2018 prediction article we said that prices would be around one-hundred and sixty dollars a cylinder. Well folks, just like we were with R-410A… we were way off again. Today the price on a pallet of 404A is between eighty to ninety dollars a cylinder. So, the cost is about half of what I predicted it would be. This just goes to show you how much of a guessing game this all is. Again, like with R-410A, our increased cost prediction came from the shortage of Flurospar that we saw in the spring of 2017. For those that do not know, Flurospar is a key ingredient when manufacturing the refrigerant R-125 and R-125 is a key ingredient in the blended refrigerant R-404A. (R-404A is a blend of R-125, R-143a, and R-134a.) So, when Flurospar prices go up so does the cost of R-404A. Back in 2017 the shortage occurred due to environmental regulation changes in China. This was a one time change and the industry needed to adapt. For now, the market seems to have adjusted and the shortage has come to an end.

The question now though folks is what will the pricing do next year? Will R-404A keep going lower? Will it stay put? Or, will we see it climb back to the higher priced levels that most of are used to?

Considerations

I’ve mentioned this countless times before, but when I do a prediction article I like to take into consideration certain factors. I don’t like to just throw a dart on the board. No, instead I like to do an analysis and take a look at the marketplace. Once we determine these factors we can then determine what the market will do. Or, at the minimum, we can provide an educated guess. For those of you who read my R-410A prediction article you may notice that some of these considerations are the same for R-404A. That is by design folks. Remember, that R-125 is a key ingredient in both refrigerants. The key difference is that 410A is much more popular then 404A and that 404A is one of the first global targeted refrigerants to be phased down.

Let’s take a look at some of the considerations that can affect the R-404A price next year.

Repeal of EPA’s SNAP Rule 20

I’ve written about this extensively over the past few months, but in August of last year a Federal Court overturned the EPA’s planned phase down of HFC refrigerants across the country. While there were many appeals done over the past year each one of them has failed. That includes an appeal to the Supreme Court. What we are left with now is a patchwork of States putting together their own HFC phase downs. The reason I mention this as a consideration is that R-404A was one of the first targeted HFCs to be phased down. This is due to the extremely high GWP of 404A. (Three-thousand nine-hundred and twenty-two.) Most everyone was expecting the 404A phase downs to begin very soon, but now everything is in question and that can cause price instability.

Flurospar Shortage

I mentioned this earlier in our previous section. If we travel back about eighteen months ago this was a HUGE deal. The majority of the world’s Flurospar comes with mines in China. During the spring and summer of 2017 there were governmental regulation changes that affected the efficiency and overall output of the mines. This lower output is what accounted for the world’s shortage. In my previous analysis I assumed this shortage would carry into 2018, but I was incorrect. Will we see a shortage though in 2019? It is impossible to say. The only thing I can point to is the overall stability of the Flurospar market over the past year.

Chinese Refrigerant Imports

Back in 2016 there was an anti-dumping tariff instigated against Chinese HFC refrigerant blends. Included in this tariff was R-404A. I won’t get into all of the details here, but essentially there was a tariff put on R-404A. (For more information on the tariff click here to be taken to TheCoolingPost.) Here’s the thing though folks, this tariff was installed on ONLY the R-404A blended refrigerant and NOT the components of the blend. In other words R-404A was taxed but R-125, R-143a, and R-134a was not. (Well, R-134a was taxed, but through a different tariff.)

Refrigerant distributors took advantage of this loophole and began importing mass quantities of R-125. Once imported they would then blend the refrigerants in their own facility. The dumping of cheap HFC refrigerants continued. This mass import of Chinese product has attributed to the lower cost of R-404A that we are seeing today. Tom Lenz of Lenz Sales & Distribution said,

The price on 404A has been relatively stable over the past few months. Most of the time it stays right above 410A at around fifteen to twenty dollars higher. (A cylinder) Some distributors mix in house while others buy in bulk from China.

Trump & His Tariffs

Most of the country has felt the effects of the various tariffs that the Trump Administration has issued over the past year. This could either be through your employer or just paying for basic things. In my day job I had to travel to Belgium a few months back to work with our corporate office. The reason for the trip? Trump’s Tariffs and how to enact them throughout the company. Whatever your politics are, we can definitely say that these tariffs have had an impact. Refrigerant, for the most part, has been left unscathed on these tariffs. With all of these imports coming from China though, how long is it before a tariff is enacted? What if one is enforced on R-125? How will that effect the marketplace? Inevitably it will lead to higher prices, but how much?

Prediction

I’ve been doing these refrigerant pricing articles for nearly four years now and over those years I have been able to gather a historical pricing tracker on R-404A. This tracker allows us to see trends and possibly what’s to come next.

  • 2015 – $90.00 – Source
  • 2016 – $110.00 – Source
  • 2017 – $200.00 – Source
  • 2017 (Winter) – $175.00  – (Ebay.com)
  • 2018 (Fall/Winter) – $80-90 a cylinder.
  • 2018 (Fall/Winter) Retail – $150.00 – (Ebay.com)

Our previous articles had focused more on the retail side of pricing as you can see from the above historical records. However, this year I wanted to focus more on wholesale pricing. That is why I included the $80-$90 a cylinder section for 2018. The question now on everyone’s mind is what will 404A do next year? Like with my other articles I have consulted with experts and distributors within the industry for their thoughts. The consensus that I received was that the price would remain relatively stable over this winter and into the summer of next year. The only wildcard out there that I am aware of are Trump’s Tariffs. If he installs a tariff on refrigerants, say R-125, we could see price rise substantially. If no tariffs are instigated then I could see the price remain stable.

Our prediction on R-404A next year is right around the same price we have today between eighty to ninety dollars for a twenty-four pound cylinder.  The market should remain stable throughout next year, especially due to the EPA’s Rule 20 being rescinded. Chad Schnuelle of Refrigerants Inc said,

It seems that 404 has been rather stable for the past two years. I checked my purchase history and it has not moved over twenty dollars per 24lb cylinder since January of 2017. Again, I feel the Chinese market still dictates the USA market. In my opinion I feel the only factor that may change the price will be if refrigerants are added to the Trump tax.

Conclusion

I want to close this article by stating that this was a prediction and it is just that, a guess. No one knows for sure what will happen to the R-404A market next year and if they say they do then they’re lying. It’s a complete guessing game. I can only provide my analysis on the matter and go from there. Lastly, I want to mention that this is one man’s analysis on the market. We here at RefrigerantHQ are not liable for any business losses or gains when it comes to buying and selling R-404A.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Owner

Pricing Prediction

Over the past few weeks we have been writing RefrigerantHQ’s pricing prediction on various refrigerants for 2019. We have covered some of the most popular refrigerants out there including R-22, R-134a, and R-1234yf. Today’s prediction article will be focusing on R-410A Puron. Most everyone’s mind has been on R-22 and what’s going to happen next year with the 2020 phase out deadline. With all of this change it is easy to forget about Puron, but the 410A market share is only growing and it’s pricing impacts can have a substantial effect on contractors and consumers. After all, R-22 is on it’s last legs and it is not going to be around much longer. Sure there are other alternative refrigerants out there but like it or not R-410A is the king right now.

Looking back at my prediction on R-410A from last year I have to say that I was way off. I had predicted a 2018 summer price at around two-hundred dollars per twenty-five pound cylinder. While that may have sounded crazy, we should consider what we saw in the 2017. Last year there was a shortage in the chemical known as Flurospar. Flurospar is a key ingredient in fluorinated refrigerants like R-125. (R-410A is a fifty percent mixture of R-125 and R-32.) This shortage of Flurospar created a rippled effect on the supply chain and caused the price of 410A to skyrocket over the summer season and into the fall and of 2017. Last year’s prediction was based off of that pricing trend. I assumed that the shortage would continue. That is where I came up with my two-hundred dollars a cylinder number.

What actually happened was quite different. In the early months of 2018 the price per cylinder was around ninety dollars per twenty-five pound cylinder. It had come down quite a bit from the previous summer’s price. What was surprising though was that the price kept on going down even as we got into the hotter months. Usually as the summer months come we see a slight or large increase in refrigerant pricing due to the increased demand. This year however we saw the opposite. The price for a R-410A cylinder dropped by near twenty-five dollars. It went from around ninety dollars to sixty-five. That is nearly a thirty percent dip in price. One of our distribution contacts stated that R-410A was more volatile then R-134a this year. That is quite the change as R-134a is usually all over the place.

The question now though folks is what will the pricing do next year? Will R-410A keep going lower? Will it stay put? Or, will we see it climb back to the higher priced levels that most of are used to?

Considerations

I love doing analysis. It is what I do at my day job and it is why I write these kinds of articles. It can be fun to dig into the details and all of the factors that can affect pricing. When doing a pricing analysis like this I like to first provide the reader what considerations that I took and reviewed to come up with my pricing prediction. These help the reader understand my point of view and where I am coming from. Let’s take a look at some of them now:

Flurospar Shortage

I mentioned this earlier in our previous section. If we travel back about eighteen months ago this was a HUGE deal. The majority of the world’s Flurospar comes with mines in China. During the spring and summer of 2017 there were governmental regulation changes that affected the efficiency and overall output of the mines. This lower output is what accounted for the world’s shortage. In my previous analysis I assumed this shortage would carry into 2018, but I was incorrect. Will we see a shortage though in 2019? It is impossible to say. The only thing I can point to is the overall stability of the Flurospar market over the past year.

Chinese Refrigerant Imports

Back in 2016 there was an anti-dumping tariff instigated against Chinese HFC refrigerant blends. Included in this tariff was R-410A. I won’t get into all of the details here, but essentially there was a tariff put on R-410A. (For more information on the tariff click here to be taken to TheCoolingPost.) Here’s the thing though folks, this tariff was installed on ONLY the R-410A blended refrigerant and NOT the components of the blend. In other words R-410A was taxed but R-125 and R-32 was not. Doesn’t make much sense if you ask me.

Refrigerant distributors took advantage of this loophole and began importing mass quantities of R-125 and R-32. Once imported they would then blend the refrigerants in their own facility. The dumping of cheap HFC refrigerants continued. This mass import of Chinese product has attributed to the much lower cost of R-410A that we are seeing today.

Trump & His Tariffs

Most of the country has felt the effects of the various tariffs that the Trump Administration has issued over the past year. This could either be through your employer or just paying for basic things. In my day job I had to travel to Belgium a few months back to work with our corporate office. The reason for the trip? Trump’s Tariffs and how to enact them throughout the company. Whatever your politics are, we can definitely say that these tariffs have had an impact. Refrigerant, for the most part, has been left unscathed on these tariffs. With all of these imports coming from China though, how long is it before a tariff is enacted? What if one is enforced on R-125? How will that effect the marketplace? Inevitably it will lead to higher prices, but how much?

R-410A & Reclamation

With the end of R-22 coming in just about fourteen months the industry will be relying more and more on refrigerant reclaimers. These reclamation facilities can process this used R-22 refrigerant, clean it, and then issue it back out into the world for reuse. This is the ONLY way for ‘new’ R-22 to be found after that January 1st, 2020 deadline. Remember, once the stockpiles of R-22 run out reclamation is all that is left.

Why am I talking about R-22? Well reclamation for R-22 is key for having a stable supply. With R-410A it is quite different. Reclaiming R-410A refrigerant, at least at this time, is not feasible. There is no profit in it. I was discussing this very matter with Chad Schnuelle of Refrigerant Inc just today. He stated that:

It is too cheap to sell reclaimed R-410A in the market and make a decent margin because of the fractionating factors. It’s a two component refrigerant blend of R32 and R125 with a 50/50 mix ratio. If there is a leak in a system one component bleeds off faster than the other. This means we have to add that component back in to get the 50/50 blend once we reclaim it.

So a reclaimed R-410A refrigerant actually has new refrigerant in it. This adds an extra layer of cost. Having that extra cost and then trying to compete with virgin R-410A at the rock bottom prices it is right now is nearly impossible. If the price of R-410A begins to rise, or if we get new tariffs instated like we mentioned above then the possibility of more reclaimed on R-410A market is there, but for now it remains out of reach.

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-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. The prices are obviously lower if you are purchasing larger quantities.

  • 2015 – $90.00 – Source
  • 2016 – $100.00 – Source
  • 2017 – $150.00 – Source
  • 2018 – $90.00 (Winter)
  • 2018 – $65.00 (Summer/Fall)
  • 2018 – $80-$90 (Retail on E-Bay.)

Looking at the above numbers we can really begin to see the deep dive in pricing that occurred this year. There was a time where a price between ninety to one-hundred dollars was pretty standard no matter what season it was. Now with today’s dirt cheap price of around sixty-five dollars a cylinder it is tough to say what will happen next. In an effort to help myself with this prediction I reached out to a few refrigerant distributors before writing this article. I wanted to know what they thought of the market this year and what they thought next year would bring. Each of them said more or less the same thing. Prices will be low, but stable. In other words folks, this sixty-five dollars price per twenty-five pound cylinder is here to stay at least for 2019.

That’s right, our thoughts for 2019 R-410A pricing is the exact same price it is today. Last year I high balled it and got burnt so this year I am going to play it safe and take the advice of our distributors. Our official prediction is that the price will hover between sixty-five dollars to seventy-five dollars a cylinder. There will be some moving back and forth due to seasonality and all of that but for the most part the price will be stable. At this time the only wildcard that I know of is if Trump adds a tariff on R-410A or one of it’s components. If this happens then the pricing point is anyone’s guess.

Conclusion

I want to close this article by stating that this was a prediction and it is just that, a guess. No one knows for sure what will happen to the R-410A market next year and if they say they do then they’re lying. It’s a complete guessing game. I can only provide my analysis on the matter and go from there. Lastly, I want to mention that this is one man’s analysis on the market. We here at RefrigerantHQ are not liable for any business losses or gains when it comes to buying and selling R-410A.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Owner

Pricing Prediction

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

Pricing Prediction

It may seem strange to have a favorite refrigerant, but I have to say folks that R-134a is it. 134a is how I got my start in the refrigerant industry back in 2007. Back then I was a corporate purchaser in charge of buying R-134a for the company’s various dealerships. My job was to figure out what dealers needed it, how much they needed, and what the market was doing on price.

The goal was to send a purchase order at just the right time to just the right vendor. If done right then the dealer I bought for would have an aggressively priced product in a very competitive market. If done incorrectly then my dealer could end up priced out of the market or they could end up with a surplus of inventory that sits on the shelf as the price goes down and down.

Doing this job allowed me to reach out to quite a few folks in the industry. I got to know them and I even got a few ties from Refron back when they were still a thing. (They were bought by Airgas and Airgas was bought by Hudson.) Because of all of this history I have with R-134a it is hands down my favorite refrigerant.

Last week when I was writing my R-22 pricing prediction article I had a lot of feedback and thoughts from various people within the industry on what they thought would happen. R-22 is the hot topic nowadays. I attempted to get some similar feedback for R-134a and while I got some the enthusiasm was much lighter.

In this article we’re going to take a look at what the market did this year on R-134a and what we can expect for next year. That being said, R-134a is a very volatile refrigerant and it can be difficult to predict what will happen. I remember in one year I saw the price go from sixty dollars a cylinder up to two-hundred and twenty a cylinder. You just never really know what will happen.

Considerations

As I’ve mentioned in the past I am an analyst by trade and you cannot be an analyst without the proper facts and data. I take the same approach when it comes to looking at refrigerant pricing. Because of that, I like to take into account specific considerations before we move onto the pricing prediction part of our article. Let’s take a look:

  • R-134a Pricing Volatility
    • I mentioned this briefly in our previous section but it’s worth touching on it again. The pricing on R-134a can change on a whim. I had one of my contacts within the industry even say that it’s impossible to predict. That didn’t give me much confidence in this article, but I’m still going to go through the work here and give everyone my two cents.
  • The EPA’s SNAP Rule 20 was Overturned
    • The EPA’s SNAP Rule 20 was a rule introduced back in 2015 that aimed at phasing down HFC refrigerants. R-134a’s mandatory phase down was to occur in the year 2o20. (2021 model year) This ruling was overturned in the summer of last year and there were a series of appeals. Eventually though the EPA realized that it wasn’t going to happen and they rescinded their SNAP Rule 20. That means that the 2020 year deadline for vehicles using R-134a was now gone… well sort of.
  • States With Their Own HFC Phase Downs
    • When it was realized that the EPA’s country wide phase down of HFC refrigerants wasn’t going to happen a number of States decided to take matters into their own hands. They were going to emulate the EPA’s now defunct SNAP Rule 20 and have their own State-Wide HFC phase down. California started this but we have had four other States follow suit. Many more may be joining this coalition of States soon. These States are large and account for a high amount of the Nation’s GDP. Trust me when I say that vehicle manufacturers are watching these developments closely.
  • More and More Vehicles are Using 1234yf
    • R-134a is a dying brand of refrigerant. Just like it’s predecessor R-12, R-134a is going away. Rather it is through mandatory phase out or just by companies switching to the new HFO refrigerant 1234yf. However it happens you should know that it IS happening. Vehicle manufacturers want to be on the right side of history and they want to have one process over many. Having their vehicles take 1234yf is a much easier solution. Each year that passes we have more and more cars on the road that are using 1234yf. That means less demand for R-134a which could in turn lower the pricing.
  • R-134a Added to the Refrigerant Sales Restriction
    • The biggest change this year on R-134a wasn’t all of the court cases going back and forth. No, as far as pricing wise I believe the biggest change was the introduction of R-134a to the EPA’s Refrigerant Sales Restriction. In the past anybody could buy a cylinder of R-134a from Sams or Wal-Mart. However, as of January 1st, 2018 you could no longer buy cylinders of R-134a unless you were 609 certified with the EPA. That meant that all of the do-it-yourselfers and the hoarders of automotive supplies could no longer purchase R-134a. (Well they could, but only in small pound quantities.) This decrease in demand could have lessened the price over this 2018 year.

Pricing Prediction

Ok folks so now that we have a clear picture on what’s happening with R-134a we can now begin to give a prediction on what the pricing will look like next year. First though let’s take a look at what happened this year.

Around January of last year I wrote a similar article on R-134a. At the time of writing the article R-134a was a just hair over one-hundred dollars a cylinder. Depending on where you looked at you could find a range between one-hundred to one-hundred and ten dollars a cylinder. This pricing was wholesale. What that means is that in order to obtain this price back then you had to buy around a pallet at a time. (A pallet of refrigerant is around forty cylinders.) The resale price at this time was right around one-hundred and fifty a cylinder upwards to one-hundred and seventy dollars.

The prices today, ten months later, have gone down a bit. Instead of seeing wholesale pallet prices at around one-hundred we are seeing between eighty and ninety dollars. So, about a ten percent drop. I would attribute this drop due to the Refrigerant Sales Restriction we mentioned earlier. On the retail side of things we’re looking right about the same price level as before: One-hundred and fifty dollars. If we look at Ebay.com today we can see quite a few cylinders right around that same price.

So, the question now is what’s next? What will happen for 2019? Truth be told I don’t see much changing for the next year. I feel like the popularity of 1234yf still hasn’t quite reached it’s peak yet and there are still so many vehicles on the road taking R-134a. There is talk from the Trump Administration on removing the Refrigerant Sales Restriction on R-134a. If that happens then we could see prices rise an additional ten to fifteen percent.

If I was to guess I would say we’re going to hover right around ninety to one-hundred dollars for most of next year. We will most likely see the eighty to ninety dollar price for the rest of this year and earlier winter of next year but as the season begins to warm up and the demand comes back we should see the price tick up to that ninety to one-hundred dollar range. And, if the sales restriction goes away maybe slightly over one-hundred dollars.

Conclusion

I want to close this article by stating that this was a prediction and it is just that, a guess. No one knows for sure what will happen to the R-134a market next year and if they say they do then they’re lying. It’s a complete guessing game. I can only provide my analysis on the matter and go from there.

Lastly, I want to mention that this is one man’s analysis on the market. We here at RefrigerantHQ are not liable for any business losses or gains when it comes to buying and selling R-134a.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Owner

Pricing Prediction

It’s that time of year again folks. Summer is gone, the leaves are turning, and we’ve already had our first frost here in Kansas City. If you got up early enough you could even see some snow falling a few days back. As this year comes to a close it has me thinking about what next year has in store for the refrigerant market, especially R-22.

As most of you know next year is the last hurrah for the HCFC R-22 refrigerant. This is due to the phase out coordinated by the Environmental Protection Agency. This phase out started back in 2010 by preventing any new appliances from using R-22. Then, as the years passed the import and production restrictions set in. The January 1st, 2020 date that is quickly approaching (Only fourteen months away) is the last straw. On this date there will be NO production or importation of R-22. That’s it. Finis.

What that means is there will only be two future sources of R-22 refrigerant for consumers. The first is the backlog of inventory on the market. This is all the inventory that companies bought up on in prediction of this looming 2020 deadline. The other source is whats known as refrigerant reclamation. I won’t get into it too much here but reclamation is taking previously used dirty R-22 refrigerant and putting it through a certified refurbishing process. I’m an automotive guy and I see this reclaimed R-22 just like I see a remanufactured part. You get that savings, but you also get that understanding that it was previously used in a different application. Personally, I have no problem with buying reman or buying reclaimed refrigerant. If it goes through a certified EPA process, what’s the worry?

Now, there is a third option out there that a lot of you may already be familiar with. Alternatives to R-22. There is a whole market out there dedicated to alternative refrigerants for R-22 applications. They could be a drop-in replacement or it could be retrofit. The point of these refrigerants is to give consumers a choice, and a lot of times save the customer money. There were times where the price of R-22 went through the roof and alternatives began to take off. But now that the price has begun to crash the alternative market has begun to shrink as well.

Past & Present

To fully understand the R-22 market and what we predict it will do next year we first have to look at the past and the present. No, this isn’t a Charles Dickens novel. Along with the 2010 and 2020 dates another big part of the R-22 phase out occurred in 2015. This is where production and import limits were shrunk. This sudden loss of supply caused the price to climb and climb. In the summer of 2017 the price had gone over seven-hundred dollars for a thirty pound cylinder. Seven-hundred dollars. That’s twenty-three dollars a pound.

Over these years companies and investors watched the price of R-22 go up and up. Some of the lucky ones bought up in 2014 and 2015 and held onto it when that high price hit. Others thought that the price was going to keep going higher. So, they bought. They bought with the hope of the price reaching eight-hundred, nine-hundred, maybe even over a thousand a cylinder. This wasn’t unheard of. Back in the 1990’s when R-12 was phased out there were times where it did reach one-thousand a cylinder. (Nowadays it’s about six-hundred a cylinder.) The problem is that this buy up was a gamble. No one truly knew what was going to happen. Would the price continue to climb as it did in 2016 and 2017? Or, would it began to settle back down and level off?

2018

What actually happened in 2018 was quite unexpected. Many people thought the price would go down and level off, but no one predicted that the price was going to be cut in half. Yes, in half. The price for R-22 in 2018 was slashed by fifty percent. That seven-hundred dollar price is now three-hundred and fifty. Actually, it’s even lower then that. Depending on how much you buy you could get cylinders for as low as three-hundred and twenty-five dollars.

While contractors and consumers were rejoicing at this price drop there were many distributors panicking. Those guys who thought they were making a good gamble back in 2016 and 2017 are now stuck with a high priced product in a low priced market. One extreme example of this is Hudson Technologies. Hudson is a refrigerant distribution company based out of New York and they bought up A LOT of R-22 refrigerant during 2016-2017.

The graphic below is from Google but it provides a great illustration of the rise and fall of R-22 pricing. At the peak of R-22 pricing in summer of 2017 we saw a stock price of $9.30. Now, a little over a year later and with the price of R-22 more then cut in half we now see a stock price of $0.84. That is a HUGE drop. On top of the stock value loss Hudson also wrote off fourteen million dollars of R-22 inventory in their second quarter. Keep in mind too that the fourteen million is NOT all of their R-22 inventory. No, that is a cost adjustment so that they can be more competitive in the market place.

Hudson Stock 10/16/2018
Hudson Stock 10/16/2018

The Why?

Before writing this article I talked to a few leaders in the refrigerant industry to get their thoughts on what exactly happened here. The consensus that I received was that R-22 has a price ceiling. There is only so high it can go. If it goes above that point, like it did in 2017, then the lower priced alternative refrigerants began to take over the market.

If you think about it it makes perfect sense. Would you buy a generic product if the brand name was right about the same price? Of course not. But, if that brand kept going up and up in price then that generic product begins to look more and more appealing. Along with the price going too high for R-22 due to speculation and over purchasing by distributors we also have to consider that the number of R-22 alternatives on the market today have exploded. I won’t list them all here but a few of the most popular ones are Chemour’s MO99 and Bluon’s XTD-20. Along with the amount of choices out there these alternative suppliers have also made it easy by offering drop-in or near drop-in replacement products.

The good news though for your R-22 investors is that as the price of R-22 goes back down the demand for alternatives will began to erode. It’s a balancing act that a lot of folks found out the hard way.

2019 Considerations & Prediction

Ok folks, so now we’ve gone through what’s happened over the past few years when it comes to R-22. Now it’s time to take a look at what considerations I will be taking into account for my prediction for 2019. In my day job I am a software analyst. I look at the details of a program or problem and figure it out through careful analysis. I love digging into the details like that. I take the same approach here when it comes to my prediction.

My predicted price for R-22 next year is based off of these specific considerations:

  • The price was cut by fifty percent this year and many people say that it can’t go lower.
  • The ‘newest’ R-22 machine is from 2010 or earlier. So, that puts the machine at nearly nine years old. A typical home’s air conditioner lasts between ten to fifteen years. Some of these R-22 will start to be replaced with R-410A. This will shrink demand and lower price.
  • When we hit 2019 there will be less then a year before total phase out of R-22 begins. This could drive price higher due to people wanting to buy before the cut-off.
  • In my opinion the market is saturated. Too many people have bought too much R-22 and now with this price drop they are just trying to offload, take the write-off, and be done. This can keep prices low.
  • There is a refrigerant reclamation industry but I honestly don’t see this having much impact until at least 2021 or 2022. Unfortunately, most folks won’t go the reclamation route until it’s a last resort and with the over supply of R-22 on the market I don’t see reclamation making much of a dent.
  • The last factor is the alternative refrigerants. As I mentioned above these refrigerants are in a careful balancing act with the price of R-22. If R-22 goes too high then the alternatives take over and cause the R-22 price to shrink back down. I foresee these alternatives contributing to a lower R-22 price.

Prediction

From my conversations within the industry it seems to be that the ‘sweet spot’ for R-22 is right under five-hundred dollars a thirty pound cylinder. That price allows consumers to still purchase the refrigerant without everyone running towards the cheaper alternatives. If that five-hundred target doesn’t happen then I have seen others state that between four-hundred and four-hundred and fifty a cylinder is enough to deter alternatives and still make a profit. This price is what the distributors want, but what will actually happen?

As far as what will occur next year, it’s tough to say. My prediction is that we will see this very low price of around three-hundred and thirty a cylinder maintain throughout the winter months of 2018/2019. Then, as we inch closer to spring I expect to see a slow uptick in pricing. When we get into spring, say April or May, we could see R-22 prices at around three-hundred and sixty to three-hundred and seventy-five dollars a cylinder.

Moving into summer I could see prices climb upwards to four-hundred dollars. The absolute highest I see is four-hundred and twenty-five a cylinder and that would be at the peak of summer. As summer wanes and the fall begins to set in I could see price of R-22 maintaining right around that four-hundred to four-hundred and twenty-five dollar price. This price will continue onwards until we hit that January 1st, 2020 deadline. From here it’s hard to say. Will the price stay flat, or will it rise slightly? Time will tell.

Conclusion

I want to take the time here in this conclusion to state that this article is a prediction. It is by no means an indicator on what will happen in the industry. This is one person’s opinion, but I hope that it was able to help you forecast for next year.

Please note that RefrigerantHQ or myself are not liable for any investment losses or earnings from R-22 refrigerant based off of this article.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Owner.

As we all know the refrigerant and air conditioning industry is highly seasonal. Depending on the intensity of that season we could see prices climb and climb like we have in the past. Sometimes these price increases don’t even begin to drop back to baseline levels until October or even November. While there are always other factors in play for refrigerant pricing like tariffs or phase downs I would say the biggest factor is seasonality.

Here’s the thing though it’s all a guessing game. No one knows for sure what the weather is going to bring for next Spring or Summer. Sure, you can read the Farmer’s Almanac and all that to get an educated guess but even then it’s still a guess. When I was a buyer for Kenworth Trucks we would end up buying ALL of our air conditioning parts and R-134a refrigerant in the month of February. There was a few reasons we did this. The first was that the product was at it’s cheapest at this point. There was very little demand and buying up ensured the best price. The other reason was more of a gamble. We would purchase a few trailer loads of R-134a (About sixteen-hundred cylinders.) at the cheapest off-season price we could get. We did this in hopes of a hot and brutal Summer. As the temperatures got warmer we would watch the market and raise our selling price accordingly. On particular bad Summers we would start out making ten percent on 134a and end the summer making fifty percent margin all because we had that lower cost product we bought up back in February. On the other hand if we had a cold Summer then we ended up sitting on all that of inventory. In some cases we actually saw prices drop in the summer below what we paid and we ended up selling at a loss. Like I said, it’s a gamble.

Spring 2018

Look at this Spring so far in 2018. Now I don’t know where you are at in the country, or outside of the country, but over here in Kansas City we have had one hell of an unusual Spring. Usually by this time I’m grilling some burgers and watching my girls play in the backyard. Instead it’s been so cold we’ve been cooped up for most of the day. In fact just last Sunday we had snow in the afternoon. (I mowed our ten acres during that snowfall, not a fun time!) Today was our first truly nice day with temperatures rising into the seventies. But, even with that beautiful day the upcoming forecast calls for more snow on Saturday and Sunday. The temperatures are dipping back down into the twenties overnight and thirties for the day. I’m seeing reports of this all over the Country.

My parents, who run a local plant nursery, have seen a lot of their plants die from the aggressive frost this year. Usually this time of year they’re selling plants left and right but traffic has been substantially down. It has just been too cold to do much. I like to use them as my barometer as to what will be coming in the Summer months. If they’re selling plants and trees like crazy in March then I know it’s going to be a good year. So far, it’s been a quiet season due to this darned cold. Doesn’t bode well.

On the refrigerant side of things I am not meeting my 2018 budget. While I am still up from last year I had much higher hopes for March and this April so far. Most of us in this industry wish for a long and hot Summer season. The hotter the temperature the more the machines run and the higher chance of failures. Failures mean sales and refrigerant usage. While this increased demand is good for business it is bad for the price of refrigerant.  As we are getting closer and closer to May and June I am starting to believe that we will have a much colder summer then usual. That means less service calls and less work. It’s always tough to see technicians just hanging around the shop waiting for a call.

If I was to put a guess on what refrigerant pricing will do this Summer when it comes to seasonality then I would say that we’re going to stay relatively flat demand and price wise. If we’re going to have the Summer I’m thinking of then there isn’t going to be much demand out there. If you’ve already bought up for the season then I can only hope that we can see the price go up. However, if you haven’t yet then you might just buy enough to get you through and wait and see what this Summer brings.

Let’s all hope for a nice and hot Summer. While I hate those one-hundred degree days here, my business loves them!

Thanks for reading,

Alec Johnson

RefrigerantHQ

 

Well folks I’m back and doing another prediction on R-134a pricing for this upcoming season. Over the past few months I have written a few articles on this topic. The first, which can be found here, stated that the R-134a price would stay relatively stable through the winter and into the spring and summer seasons.  My thinking here was that the anti-dumping duties on Chinese R-134a had already happened and the market had already adapted. On top of that the European Union ended R-134a usage in new vehicles in 2017. So, with the lessened demand from the EU and the tariffs starting to settle into the market I thought we would remain relatively stable.

A few weeks later I wrote another article stating that R-134a pricing would be going up. Again, this article can be found by clicking here. The motivation for this article was that I had received two tips from some of my readers. The first was from a prominent manufacturer of R-134a stating that everyone’s price was going up seventy-five cents per pound. The next tip was from another manufacturer stating that pricing was going up one dollar per pound. Seeing both of these letters sent at right about the same time sent alarm bells off in my head and I wrote this article to alert everyone else.

Well now folks that the dust has began to settle I feel I can grant yet another prediction on R-134a for this year’s season. I haven’t seen much at all in price increases over the past few months. While initially I was a bit panicked by the pricing letters I soon began to realize that a lot of companies had plenty of stock on hand left over from the previous seasons. These price increases are on new product and there is so much older product in the market place that we haven’t seen much of an impact yet.

HFC Sales Restriction in 2018

Most of you know by now that R-134a and other HFC refrigerants are now subject to the Environmental Protection Agency purchase restrictions. These HFC refrigerants were added in January 1st of 2018. While we all knew this was coming there were some side effects that I had not foreseen. A lot of larger retail outlets out there like Sam’s Club, Costco, Wal-Mart, etc used to sell R-134a thirty pound cylinders to do-it-yourselfers. This was perfectly fine. There were no regulations and it was more or less treated like buying a new cylinder of propane at your local store. Well when this new regulation went into effect these companies decided to back out of the 134a market as they saw it wasn’t worth the time to check and record everyone’s 609 certification just to purchase a cylinder of refrigerant.

Here’s the thing though. These companies suppliers had stock piles of R-134a ready to be sold for the next season. With the cancellation of these purchases these suppliers were now stuck with a surplus of 134a inventory on hand. Think about it. If you had sixty percent of your sales coming from one customer and then that customer stopped buying you would be stuck with a ton of inventory. These vendors aren’t just going to let their inventory sit. No, they are going to find new customers and come in at a lower price than their competitors.

What that means is that there will be a lot more competition on the market place this season. With more competition means a lower price to the end user dealerships and repair shops across the country. While I don’t expect it to go down significantly I could see the standard thirty pound cylinder going down a few dollars all the way up to five dollars a cylinder when the season begins to pick up.

Here’s the caveat though. If everyone’s stock pile begins to run out halfway through the summer season then we could begin to see the opposite effect. We could begin to see the price starting to climb and climb. Remember, we have those price increases from the refrigerant manufacturers. So, when our distributors do run out of product they may end up buying at a much higher price.

That being said, I am skeptical that we will run out of 134a this season. There are so many factors going into decreased demand of R-134a this year. Just a few of them are:

  1. The European Union phase out in 2017 that we mentioned above.
  2. The HFC purchase regulation. No more do-it-yourselfers can purchase thirty pound cylinders. (They can still purchase cans.)
  3. More and more new vehicles here in the United States and other countries are now using the new HFO 1234yf refrigerant in place of R-134a. While the market is still small it is important to realize that with each passing year the 1234yf market share goes up and up.

Even with this decreased demand I believe the stock and surplus inventory is still at previous year levels. So, again, I think that we are going to see the R-134a price drop a few dollars, maybe even up to five dollars a cylinder. Let’s see how the season plays out. Best of luck to all of you!

Thanks for reading,

Alec Johnson

RefrigerantHQ

Well folks, I’m already striking out on my prediction for R-134a pricing for next year. I wrote an article towards the beginning of this month stating that the price of R-134a would remain rather stable over the winter and into the summer of 2018. Lo and behold, two major refrigerant distributors announced significant increases in R-134a  pricing at about the same time I was writing my article. Hey, they call it a prediction for a reason!

Now, I won’t get into what companies that made these announcements as it doesn’t matter and I don’t want to get on anyone’s bad side here. I will just say that these two companies that made these announcements are major refrigerant distributors that most of you know of. I was made aware of these price change announcements by two of my readers and for that I am very thankful. I’ll take the time now to say if you or anyone else know of any price changes coming down please feel free to reach out to me  with the information. I will do my best to spread the knowledge all the while keeping the source close to my chest.

The Price Increase

Alright folks so let’s get onto the changes. The first notification I received was from December 1st, 2017. It stated that this company would be raising prices on R-134a product by $00.75 per pound effective immediately. The reason here wasn’t quite what I expected. It wasn’t due to lack of inventory. There is plenty of inventory at this point in time. No, it actually was due to a shortage of raw materials that are used to manufacture more R-134a. So, this price increase is in anticipation of their inventory being depleted and having to replenish. This was the first notification that I received and I took it with a grain of salt as it may have been just one company that decided to raise pricing.

Today I was notified by another reader of a price increase on R-134a from a different distributor. This distributor was going as far as raising their price by $1.00 per pound. This price change was effective immediately and was explicitly stated that no pre-buys would be allowed. So, if you had some cash to burn before the increase hit you were out of luck. In this letter there was no explanation as to why the increase came but I can only assume that it is blamed on raw materials again. This second notification definitely got my attention and alerted me that something was going on.

First, let’s take a look at that increase. For argument’s sake let’s call the price of a thirty pound cylinder before this price increase at $100.00. We now have an increase of $1.00 per pound. We’re looking at a price of $130.00 or an increase of thirty percent in one day. That is HUGE. Imagine if you go through pallets of this refrigerant per year. There are forty cylinders on a pallet and say a medium dealership will go through a couple pallets per year. With eighty cylinders this price increase alone will cost that dealership another $2,400 in cost. I hope you have some leftover product…

The Why?

The real question here is why did this increase occur? Everyone is stating that this increase is from a shortage of raw materials. I searched around the internet today looking for any recent articles discussing this sudden price change but I couldn’t find a thing. That’s rare but this change could be too recent for any major stories to be written yet.

I did some further research trying to find out what R-134a is actually made of. It consists of hydrogen fluoride, which is made from flurospar, and trichloroethylene or perchloroethylene. The big thing here is flurospar. Flurospar is what happened to refrigerant pricing towards the beginning of 2017. There was a shortage in China which caused a snowball effect across the world. For some reason, China provides fifty percent of the world’s flurospar. Talk about market control.

Now the cause of the shortage in China isn’t exactly known. I haven’t found concrete information on it except that China has introduced new environmental regulations on mining of flurospar. That could mean a whole host of things that I am not going to speculate on it. The big thing here is to know that we are dependent on the flurospar mining in China. With no flurospar we have no hydrogen fluoride and with no fluroide we have no refrigerant.

During my research I found an article from Thehill.com stating that America isn’t even mining ANY flurospar. Yes, that’s right folks… none. Like so many other things nowadays we are dependent on other countries for our supplies and when those other governments decide to throw a wrench into things we just sit back and take it. Maybe this will change in the future, but for now we are at their mercy.

 

Conclusion

I can only hope folks that with the lower demand from the European Union and the fact that we are still in the dead of winter here in the United States that this new price will have time to taper off and slowly go back down to normal before the spring and summer HVAC season kicks up again. Who knows though? This shortage of materials may just be a hiccup in the supply chain and it will work itself out before it causes to much impact. If it doesn’t then we could very easily be looking at a summer with 134a prices well above $200.00 a cylinder.

The thing everyone in the industry should be worried about is that if this is due to Flurospar shortage then get ready to see all of your refrigerant pricing go up. R-410A. R-404A. It’s going to be early 2017 all over again. Very few refrigerants are exempt from this. Heck, even the new 1234yf could be affected. Here’s hoping that things calm down before the heat cranks up!

Thanks for reading and as always if you come across any tips or leads feel free to reach out to me.

Alec Johnson

RefrigerantHQ

 

Sources

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

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.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Sources

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.

Sources

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.

Thanks again,

Alec Johnson

RefrigerantHQ

Sources

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.

 

Only time will tell if I am right. I hope the article and was helpful and if you enjoyed it please take the time to subscribe to my mailing list.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Sources

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.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Well folks it is that time of year again. The mornings are already getting cooler here in Kansas City and we’re only a week away from Labor Day weekend. Our neighborhood pool has already closed due to the unseasonable August temperatures. Those of you who are familiar with Kansas weather the month of August is usually filled with one-hundred degree humidity filled days. So far this month I do not believe we’ve seen one and there are only a few days left. While the temperature is comfortable it definitely hurt sales as I’m sure it did for you as well in your part of the country.

The one upside to having a mild summer is that refrigerant prices will stay pretty constant. As most of you know refrigerant prices can be wild and unpredictable especially in summer. There was a time a few years ago when I was responsible for purchasing R-134a that I saw the price climb from sixty dollars a cylinder all the way up to two-hundred and forty per cylinder in the middle of a particularly rough August.

So, What Happened?

Let’s take a look at some of the most popular refrigerants on the market today.

R-134a

R-134a is a whole different animal. Those tariffs that everyone was so afraid of were ruled in favor of this year in March. (Source) That means that there is now a tariff ranging from 148.79% to 167.02% on imported R-134a from China. At the time I thought this would effect the market hugely and cause the price to skyrocket over the summer. The price did go up, but honestly not that much.

When I did a review of pricing last year on 134a it was selling at about one-hundred and fifteen dollars a cylinder. Today, if we look at it we can see that the average retail price for a thirty pound cylinder is between one-hundred and forty dollars upwards to one-hundred and seventy dollars depending on where you look.

As far this winter and the future I can pretty confidently say that this price will not be going down. We may see a bit of decline in December and January but as the season heats up again I could see this easily going over two-hundred dollars a cylinder and that’s not even counting the dead heat of summer. It could surpass two-hundred and fifty without blinking an eye.

R-410A

I was pretty close to spot on my prediction article from last year on R-410A. At the time 410A was hovering between one-hundred and thirty to one-hundred and fifty for a retail purchase. I had predicted that it would stay right around the same price point for the 2017 year. Well folks, looking at pricing today on 410A we can see that the average retail price is hovering right around… you guessed it one-hundred and thirty to one-hundred and sixty dollars.

As I predicted last year correctly I’ll end up saying right about the same thing here. I expect the cost to be relatively flat for the winter and into next year’s season. This is one of the refrigerants out there that if you buy a bundle in winter you might not actually end up saving much money.

R-404A

At the end of last year R-404A was averaging out at about one-hundred and forty-five for a twenty-four pound cylinder. It was about this same price as we moved into Spring. I’m not sure where but somewhere along the summer months the price began to climb and climb. The average price now for a cylinder is two-hundred dollars. Most of the time you’ll find it for one-ninety-nine on resale sites but you may be able to get under one-hundred and seventy-five by going through a distributor.

It’s tough to say if this price will go back down over the winter. There are a lot of factors in play on R-404A at this point in time. 404 is the second HFC refrigerant to see a major push for phase-out. The plan is to replace it with lower GWP HFOs or alternative Hydrocarbons such as CO2. In 2015 there was an announcement of mandatory phase-out that the EPA issue but now that phase-out has been overturned and no one really knows what is going to happen next.

R-22

When I wrote my pricing prediction article towards the end of last year we had R-22 at just over six-hundred dollars for a thirty pound cylinder. As we crept closer to the summer the price of R-22 begin to creep up and at some point it went over seven-hundred dollars a cylinder. However, as the summer wore on the price began to fall back down towards that six-hundred dollar mark. You can even find some that are under six-hundred.

I believe this decline in pricing is for one reason and one reason only. Yes, the refrigerant is phased out and supply is going lower and lower with each passing year but you have to remember that the demand is lowering with each year that passes as well. There are less and less R-22 units on the market today and the ones that are still out there are at least seven years old, soon to be eight. I believe that the price of R-22 will stay relatively the same for the next few years until we hit the next milestone of the phase out in 2020.

1234YF

There wasn’t much change on this newer HFO refrigerant this year. Honestly, I didn’t expect it to go up or down much. There just isn’t enough demand for this refrigerant yet. Sure, with each year that passes more and more models are now using 1234YF but the aftermarket demand is still quite low. Prices at the beginning of the year were between six-hundred and fifty and seven-hundred and fifty for a ten pound cylinder.

When we get to the point of no return on R-134a the price on 1234YF may begin to rise but there is also a consideration to be made that the manufacturers may be raising production in tandem to keep prices fairly level. The downside here is that Honeywell and Chemours have a near monopoly on this market so the only one who knows where the price is going are them.

Conclusion

Summer is over in just a few weeks and the worst of the heat has passed us. The prices that have spiked will slowly being to settle back down and when winter hits their prices will be as close to normal as they can get.

If you are thinking about replenishing your stock then I would highly suggest you buy in the months of December and January. Sales are nearly non-existent at this point and you can usually get yourself a deal before the summer’s heat comes roaring back.

Thanks for reading,

Alec Johnson

RefrigerantHQ

Last week a Federal Court in Washington, D.C. ruled against the Environmental Protection Agency’s ruling of planned phase-out of HFC refrigerants. This phase-out was announced by the EPA in 2015 and it’s goal was to have most, if not all, HFC refrigerants completely phased out in the United States by 2030. They were going to start with R-404A in 2018-2019, move on to R-134a for 2020-2021, and then lastly take on the King that is R-410A. Depending on your views this was phase-out was a godsend or a pain in the rear.

The EPA’s phaseout was thrown out by the court for one reason and one reason alone. The Obama administration put this HydroFluroCarbon refrigerant phase-out under the same umbrella that the CFCs and HCFCs were used to be phased out. They used Section 612 of the Clean Air Act. This section of the Clean Air Act strictly specifics on products that contain Chlorine or that cause damage to the Ozone layer. HFC refrigerants do not contain Chlorine nor do they cause ANY damaged to the Ozone. The courts looked at this and ruled in favor of the filing companies, Mexichem and Arkema. I wrote more in-depth on this ruling in a previous article that can be found by clicking here.

Well this ruling angered a lot of people including the two giant conglomerates DuPont/Chemours and HoneyWell. These two companies invested hundreds of millions into the new and expanding HFO refrigerant market. But if there is no phase-out of HFCs then their investment may just end up being sunk cost. If there is no mandatory ruling or phase-out then I could see HFCs lasting for quite a long time. (Especially R-410A.)

The AHRI, or America’s Air Conditioning, Heating, and Refrigeration Institute, has said that one of these two major companies will very likely to file an appeal. These three organizations: AHRI, HoneyWell, and Chemours are pushing and lobbying as hard as they can to get these HFC phase-outs reinstated. But here’s the thing though, there has been no legislation drawn up to phase-out HFCs. No one is going through congress.

Maybe it’s just me but if we are going to be affecting an entire industry across the country wouldn’t it make sense to have Congress write, debate, and vote on a law? Why are we giving the EPA all of this authority to dictate what refrigerants can and cannot be phased-out across the country? Not to mention that the EPA is overstepping it’s bounds, and they know it, by using Section 612 of the Clean Air Act. This is pure overreach and government laziness.

What Happens Now?

Since the ruling is still ‘fresh’ and only happened last week no one knows quite for sure what impact this will have on the market. If this decision stands, which I hope it does, then the EPA will no longer be allowed to mandate phase-outs of HFCs using Section 612 of the Clean Air Act. This very well may be the wake up call that they need. As my father said and still says, ‘Do things the right way the first time.’

On top of all of that this ruling calls into question the Kigali Amendment that was put in place across one-hundred and seventy countries. This amendment aimed at phasing out HFC’s across the world by the year 2100. It is called an amendment because, you guessed it, they added it to The Montreal Protocol. So, yet again, countries got around creating new legislation/treaties and instead amended a treaty from thirty years ago that has nothing to do with HFC refrigerants. Now this whole amendment is called into question in the United States based on this court ruling.  Will the US back out of it like we did with the Climate Paris Accord?

The AHRI

This may be my ignorance talking here but I am trying to understand AHRI’s position and why they are doing everything they can to push for these phase-outs to occur. They are all for phasing out HFC refrigerants across the country and providing even more shake-up to the refrigeration industry. The AHRI was quoted as saying,

AHRI is researching these other potential avenues and will work closely with the Government Affairs Committee to develop a formal industry position on how HFC and refrigerant regulation is best addressed.”

They also state that they still support Senate ratification of the Kigali Amendment and will continue to push for it, but they admit that it is now unclear whether ratification in the Senate alone would be enough or if additional legislation will be needed. It seems that the AHRI is on the side of the big business of HoneyWell and Chemours.

Conclusion

Overall, I am happy about this ruling. To me it seems like we are doing just fine and that it will not be the end of the world if our HFC refrigerant friends stick around for a while longer. Maybe long enough for the Congress to actually make a law and phase these refrigerants out the right way but I doubt that will happen with the current political climate. We may be at an impasse for the next four to eight years where HFC’s will reign supreme.

Thanks for reading,

Alec Johnson
RefrigerantHQ

Sources

This is something that I was seeing a lot of seven to eight years ago. As most of you know back in 2010 R-22 refrigerant was banned from being used in new air conditioners. In 2015 the import and manufacturing allocations of R-22 were cut as well and now in the upcoming year 2020 the allocations will be cut again. The goal here is to slowly phase-out one of the most widely popular refrigerants on the market.

Everyone knew this was coming. It had been in the plan for at least a decade as a result of the Montreal Protocol. A few businesses with some foresight bought up a few extra cylinders of R-22 before the 2010 date hit. They had three or four cylinders sitting in storage at that lower cost so when the cost did rise post 2010 they wouldn’t be affected for a while. It was a smart business move and saved you from having extra expense down the road.

There were some guys out there however who took it to another level. Instead of buying five or ten extra cylinders and sitting on them they bought pallets. Yes, that’s right pallets of R-22. I haven’t talked to him in a while but there was a distributor that I used to deal with out of Minnesota that had bought five pallets of R-22 before the change hit. There are forty cylinders on a pallet so that is two hundred R-22 cylinders sitting in storage. At the time the cylinders would have been around two-hundred and fifty to three-hundred dollars each. That’s around a fifty-thousand dollar investment. That is a hell of a cost to absorb but there’s a strategy behind this.

Everyone knew that R-22’s price would go up after the initial phase-out. Everyone knew that the price would go even higher after the 2015 allocation shrink. What this guy did out of Minnesota was take a gamble on just how much the price would go up. Now, like I said, I haven’t talked to him in years but if he sat on his stock over the past six or seven years and then went to sell it all today he would make a killing. What is the price of R-22 today for a cylinder? It’s about six-hundred dollars.

Let’s say he sells all two-hundred cylinders at six-hundred. That’s a one-hundred and twenty-thousand sale resulting in a seventy-thousand profit windfall. Now any of you who run a business know that that seventy-thousand wasn’t all profit. You had to factor in the up-front capital. You had to factor in the cost of storage and the space that that product was taking up. But, if you can take the initial hit of the investment and have the room to store it in a controlled environment it was a great investment. I am absolutely positive there were others out there who bought ten, fifteen, or even a whole trailer-load of twenty pallets of R-22 refrigerant before the phase-out began. And can you imagine if the price had climbed to a thousand dollars a cylinder like it did on R-12? Talk about profits.

The investment opportunity on R-22 is most likely over. The price has gone up so much and the demand is starting to decline. Most R-22 units are now at least seven years old and some are already past the decade mark. These units will start to be replaced over the next year or two. Anyone who is still holding on to a large amount of R-22 may be struggling to sell it. The sweet spot was about a year or two ago when the machines were aging but weren’t all being replaced yet.

HFCs

So, now that the R-22 craze is over the question on everyone’s mind today is when will the price on HFC’s begin to climb and climb? For the most part prices on HFCs have been pretty stable. Sure there have been some seasons where they rise to over two-hundred a cylinder but when the winter comes and demand dies down they usually level out back into the one-hundreds. I believe the worst I ever saw it was a few years back where we had R-134a at nearly two-hundred and sixty a cylinder. (That was a fun summer…)

The first HFC refrigerant phase-out was to begin here next year on R-404A with vending machines and supermarket freezers. But just last week there was a ruling made by a Federal Court that may have turned this on it’s head. Click here for an article on the ruling. With this ruling nobody really knows what’s going to happen to the proposed phase-out of HFCs. The EPA’s ruling against 404A in vending machines and supermarket freezers still stands. What has changed is the eventual phase-out of 404A. The Honeywell corporation has already said that they will appeal the court’s ruling but who knows how long that will take. For now everything is in flux including the pricing of HFCs.

Conclusion

Does it make sense to begin stock piling HFC refrigerants in your warehouse? Well folks that’s the gamble that you’ll have to take. The price will eventually go up as the HFO and Hydrocarbon refrigerants begin to take over but we just don’t know when that price will climb. It could be four times as expensive as we hit the year 2021 or it could be the exact same price. You can take the risk today and buy a few pallets of R-404A or R-134a, sit on them for a few years, and then sell when you’re ready. I like to think of it as buying some stocks and waiting for the right time to sell but even the most experienced stock broker makes a bad trade every once and a while.

If it was me I would wait at least another year until the dust settles on this latest ruling. Maybe then we can get an exact date of when the first HFCs will be nationally phased out. What do you think? Will you take the risk?

Thanks for reading,

Alec Johnson
RefrigerantHQ

Well ladies and gentlemen it’s that time of year again. The time of year when a cold wind blows, the temperature doesn’t rise above thirty degrees, and snow flurries fall from the sky. What better time than now than to talk about refrigerant? It’s the slowest point in the season and it seems that when things slow down everyone is able to take a step back and look at what the market is doing and will be doing in the upcoming months.

This post will go over what my pricing predictions are in 2017 on some of the most common refrigerants used today. I am by no means a fortune teller or clairvoyant so I ask that you take these predictions with a grain of salt. My theories are based off of what I have seen happen in 2016 and what I believe will happen in 2017.

For 2017 I see it as kind of a mixed bag. I see the high possibility of two wild cards on a couple refrigerants (R-134a & R-404A) and the others I see as barely changing a dime. Before we get started digging into each refrigerant let’s take a moment and consider the following things that will happen next year in the refrigeration industry:

Considerations

Donald Trump's Affect on the Refrigerant Industry
Donald Trump’s Affect on the Refrigerant Industry
  • Trump – It’s worth noting that next year we will be having a ‘Donald Trump’ effect on the market. Rather this is a good thing or a bad thing is to be determined. Trump has shown that he is against regulations, against the EPA and it’s enforcement of climate changing policies, and most of all he doesn’t believe in Climate Change. All of this bodes well for the price of refrigerant. He very well may get rid of some of the phase outs and extra regulations. However, the other side of the coin is that Trump is VERY anti-China. He is against their so called currency war. He is against their trade policies. He is against dumping of their imports into the United States market. He has also talked about imposing a thirty-five to forty-five percentage tariff on Chinese imports into the United States. This would have a significant impact on not only imported refrigerant but also on US manufactured product. (If I was a manufacturer in the US and saw all the import price rising I would raise my cost too and make some extra money.) I wrote more about what impact Trump will have in another article that can be found by clicking here.
  • Anti-Dumping Tariffs – On top of the ‘Trump Effect,’ we also have the lawsuit filed by the HFC coalition with the International Trade Commission. For those of you that have been paying attention for the past few years I’m sure you are very well aware of it. The claim is that China is importing their refrigerants into the United States market at dirt cheap prices. They can do this because of course labor is cheaper over there but also because the Chinese goverment subsidizes these companies with the unlimited coffers of the goverment treasury. So, when this imported product hits the United State’s market it comes in at a very low price. (Sometimes $40-50 a cylinder.) The initial lawsuit was filed on R-134a and on September 30th, 2016 the Trade Commission made a preliminary ruling in favor of imposing a tariff on imported R-134a from China. The agreed percent was 137.23 on the two main Chinese companies and 188.94% on other Chinese companies. The Trade Commission released a fact sheet on this that can be read by clicking here. 
  • Phase Outs – Along with the other two factors phase-outs is something veterans of the refrigeration industry had grown to hate. It seems that every few years another refrigerant is being pushed out and being replaced by something else. Instead of the goverment coming after the CFCs or HCFCS they are now coming after the friendly HFC refrigerant class. This includes your commonly used R-134a, R-404A, and R-410A. Don’t be surprised if you hear of an upcoming phase out of these in the next few months and also don’t be surprised if you see your price raise due to a recently announced phase-out.

Alright, so now that we got all of that out of the way let’s dive into it by looking at each of the common refrigerants out there today:

 R-22 HCFC

R-22 30 Pound Refrigerant Cylinder
R-22 30 Pound Refrigerant Cylinder

Phase-Out

Ok guys first thing’s first. If you haven’t switched your unit from R-22 and over to R-410A DO IT NOW! Your R-22 machine is at least seven to eight years old now and I’m betting that a lot of them are quite a bit older than that. On top of your machine being older it is also less inefficient than it’s HFC 410A counterpart. And finally, R-22 is extremely expensive due to the Montreal Protocol mandated phase out. Every year that passes less and less R-22 is allowed imported or produced in the United States and just like everything else the less supply there is the more demand there will be. According to the EPA’s website, which can be found by clicking here, the phase out schedule of R-22 is as follows:

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%

Now, you may have noticed we’ve hit the majority of these dates already. Remember how I said your R-22 unit is getting old? As shown above no new machines from 2010 or greater can be manufactured with R-22. So, if you have an R-22 machine it is approaching or is already over ten years old. Worst of all, if your unit springs a leak and you run out of refrigerant you face paying a large sum of money just to replace your R-22.

Price

Let’s talk about price now. I’ve been writing my price per pound articles for the past three years now and each time I write one the price of R-22 keeps on climbing up. (My latest price per pound article can be found here.) In my 2015 article R-22 was retailing at about $300 per thirty pound cylinder. In my 2016 article R-22 was retailing at about $480.00 for a thirty pound cylinder. In my latest article that I wrote only a few days ago for the 2017 year R-22 is between $600-$700 for a thirty pound cylinder. That $300 price back from 2015 for a thirty pound cylinder will now only get you a ten pound cylinder for the same amount of money. (Example Amazon link.) It’s amazing at how fast the price can go up.

As you can see the price of R-22 is continuing to climb. The past two years it has gone up thirty percent consistently. My prediction for the 2017 year is more of the same. Let’s call the current price $650.00 for a thirty pound cylinder. That’s a happy medium between the $600-$700 that I’ve been seeing. If we do the below math we will get the number of $928.00.

$650.00 / (1-.30) = $928.00 for a thirty pound cylinder.

So there you have it folks. Next year’s predicted price for a thirty pound cylinder of R-22 is set at $928.00. 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.

$300 * 40 = $12,000 cost

$900 * 40 = $36,000 cost.

Profit of:      $24,000

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-410A HFC

R-410A Refrigerant 25 Lb Cylinder
R-410A Refrigerant 25 Lb Cylinder

Potential Phase Out

Along with R-134a I would say R-410A is one of the most popular refrigerants on the market today. Nearly every home or commercial air conditioning unit is using or will be using R-410A for their refrigerant. It became the default refrigerant back in 2010 when it replaced the HCFC R-22 as I talked about in the R-22 section.

Now that we went through all of the work of replacing R-22 with the 410A HFC there is now talk about replacing 410A. Can they make up their minds? Even though 410A does not contain Chlorine like it’s predecessor it has been found that HFC refrigerants have a very high Global Warming Potential (GWP). 410A has a GWP of 1,725 times the effect of carbon dioxide. Basically, 410A emits Greenhouse Gases that get trapped in the atmosphere and warm the planet. Now imagine the impact that it could have if every air conditioner in the world begins using R-410A. Startling, huh? So, now the race is on to find an alternative to 410A.

So far there is no end all be all for a 410A replacement. Honeywell, Chemours, and other companies are hard at work as we speak seeking out the best alternative refrigerant with the lowest GWP. Some of the contenders are:

  •  R-32 – This has a GWP of 675, not the best but better than what we have now. I wrote an article about this one last year that can be found by clicking here.
  • Natural Refrigerants such as R-290 and CO2 – So far these have not shown to be a cost effective solution but their GWP is VERY low. (Source article.)
  • DR-55 – A Chemours refrigerant pending approval as R-452B. Blend of R32, R1234yf and R125. GWP of 698. (Source)
  • L41z – A Honeywell refrigerant pending approval as R447B. Blend of R32, R125 and R1234ze(E). GWP of 740. (Source)
  • ARM-71a – An Arkema development refrigerant with a GWP of 460. (Source)

There is no set date on when R-410A will be phased out but I foresee it as only a matter of time. Once a standard replacement has been found than the phase out will begin. This could be next year or five years down the road. It’s difficult to tell.

Price

When 410A started to become popular the price was about on par with the price of R-134a. In 2014-2015 the price hovered between $75 and $80 for a twenty-five pound cylinder. Over the past few years it has climbed about fifteen to twenty percent each year. Today the price is hovering around $130 for a retail customer. (If you purchase more than one cylinder or go in for a pallet of 410A you will save money per cylinder as well.)

Even though the price has climbed over the past few years I honestly don’t see 410A changing much in 2017. The phase out won’t be happening for a while. They haven’t even decided on a replacement product yet and when they do decide the phase out will be a staggered approach just like all of the others. If they decide on a standard replacement product in 2017 the phase out of 410A may not even start until 2022 or 2023. So, with that in mind I predict that the price of 410A in 2017 will stay relatively flat at between $130-$150 retail. Bulk purchasing may get you lower but even then you’re still looking at being in the hundreds, maybe in the high nineties if you’re lucky.

Another thing to mention on 410A is that in 2017 you do NOT need to be certified with the EPA to purchase. If you wanted you could go to Amazon.com or E-Bay.com today and purchase yourself some 410A with no regulations required. However, starting on January 1st, 2018 you will be required to be certified before purchasing or handling any HFC refrigerants including 410A, 134a, 404A, and others. (Source from EPA’s website.)

Lastly, if you are looking to purchase 410A by the cylinder I recommend Amazon.com today or E-Bay.com. If you are looking for a bulk purchase of forty cylinders or more visit our bulk purchasing page and we’ll see what we can do for you!

R-134a HFC

R-134A 30 Pound Cylinder Refrigerant
R-134A 30 Pound Cylinder

Phase-Out?

Remember those wildcards I mentioned at the beginning of my post? Well 134a is one of them. (If you haven’t noticed already by watching the market.) It was announced in the summer of 2015 that R-134a would be joining alongside R-404A in the slow phaseout of applications. The case on R-134a wasn’t  nearly as drastic as it was for R-404A. The phase-out of 404A has already begun where with R-134a we still have a few good years left. (2020 is the main year for vehicles.)

R-134a days are numbered rather you like it or not. More and more newer model cars are opting for the HFO 1234YF made by Honeywell and Chemours. The Global Warming Potential of 1234YF is significantly less than R-134a and it is being pushed heavily by the United States’ Government as well as many other nation states including the European Union. Give it a few more years and 134a will be the exception instead of the rule.

The Anti-Dumping Tariff

Alrighty, ladies and gentlemen. Here were are. The tariff. You may have noticed that the price of R-134a went from about $70 a cylinder this summer all the way up to an average of $110 a cylinder over the fall and winter. This jump in price is in direct correlation to the ruling by the International Trade Commission on a anti-dumping tariff on R-134a imports from China. As I said in the beginning of this post they ruled in favor of imposing a tariff on September 30th, 2016. While this ruling is still preliminary and the final ruling won’t happen until March of 2017 the market still freaked out. (Click here for the Trade Commission’s fact sheet on the ruling.)

The standard price of $70 flew up overnight with the announcement of a proposed 137.23% tariff on all imported Chinese product. (188.94% on smaller Chinese refrigerant companies.) Can you imagine taking a 137% increase in cost for your business? I certainty can’t. This ruling is a double edged sword. If the HFC Coalition gets their way Chinese imports price will sky rocket. This will create a chasm in the market and cause every price on 134a to climb along with the imports… just like it did this fall. You, me, and everyone else will end up paying more for their refrigerant. On the other side is the preservation of American jobs and American manufacturing. We can be competitive again. We can actually buy American made product. Sounds nice huh? Do you want to pay more and save jobs… or do you want to pay those low prices and maybe put your neighbor out of work?

R-134a Tariff Schedule
R-134a Tariff Schedule

Pricing

Alright, so enough about all that other stuff. Let’s get to the reason you came here. What is the price of R-134a going to do next year? Up until the ruling in September the retail price on cylinders was just shy $100.00 on Amazon and E-Bay. After the ruling the price only jumped to about $115. While this may not seem like a big jump I can assure you that on the wholesale side of things we saw our price jump from $80 a cylinder all the way up to over $100 a cylinder. I believe the product that we are seeing sell for $115 online are distributors sitting on old inventory. I do not see this price lasting for long.

As for what will happen in 2017 this is a tough one to call. I do not believe the impending phase out in a few years is going to effect the pricing at this time. My big concern is the ruling on the tariff in March. What will happen if they rule in favor? What will happen if they rule against? Here are my two predictions:

  • If the Trade Commission rules in favor I do not see the market adjusting much at all. I believe the adjustment already happened in early October when their preliminary announcement was made. (It jumped nearly thirty dollars a cylinder.) My prediction if they rule in favor is that wholesale prices will stay just a shy above $100 a cylinder. Retail prices will level out at about $130-$135 a cylinder.
  • If the Trade Commission rules against the tariff than I can see the price plummeting back down to where it was earlier this summer. My prediction would be that wholesale pricing will be in mid $70s and retail pricing will be in the high $90s. 

Lastly, if you want to purchase R-134a by the cylinder I would suggest visiting our Amazon and E-Bay partners. If you are looking for more than just a few cylinders please visit our bulk purchasing page and we will get you in contact with some of our distributors.

 

R-404A HFC

R-404a Refrigerant
R-404a Refrigerant

So-Called Phase-Out

This is the other wildcard of 2017. No one really knows what’s going to happen on the price of 404A as there are so many cards in play in 2016, 2017, and 2018. Starting in July 20th, 2016 the initial phase-out began. While the July date only imposed a ban on retrofitting existing machines over to 404A it was just the beginning. The next big date on 404A phase-out is January 1st, 2017… you know only a few weeks away. The order and the types of machines affected can be very confusing. Instead of trying to explain everything in text I figured it would be easier to review in a table or picture. I pulled these tables directly from Chemour’s website. All credit goes to them for compiling the data. (Click here for source.)

Chemours HFC Phaseout Schedule
Chemours HFC Phaseout Schedule
Chemour's HFC Phaseout Table
Chemour’s HFC Phaseout Table

As you can see from the above tables this is the beginning of the end for 404A. July 2016, January 2017, January 2018, and so on. The big thing to mention though is that 404A will no longer be accepted in these machines it is NOT at this point in time being phased out. Let me rephrase that: R-404A is not being phased out yet but it’s use in certain machines is. So, unlike R-22 where the applications were limited and the production/imports were phased out R-404A is not being phased out. It is just having it’s applications severely limited. Their strategy could very well be phasing out 404A by starvation. If there are no more legal applications what would we use R-404A for anyways? It’s a roundabout way of going about it but maybe this will be the new way to rid the world of HFC refrigerants.

Price

So, what are we looking at as far as price on R-404A next year? Well, before we look to the future let’s look at the past. In 2015 we were at about $90-95 for a twenty-four pound cylinder of R-404A.  The price went up slightly in July of 2015 when the EPA announced their intention to phase out R-404A starting in July of 2016. I believe almost everyone saw it coming anyways so it came as no surprise. After a few months the price leveled out and has remained fairly constant for the rest of 2015.

The price began to climb again in 2016. As shown in the above table the first phaseout was this July with the ban on retrofitting. In just a few weeks the next ban hits. As of right now the price online on Amazon and E-Bay are between $110 at the lowest and at $175 at the highest. It is honestly very difficult to say what’s going to happen next year.  The phase out of machines using R-404A inclines me to believe that the price will go up. But, on the other hand there is no official reduction in R-404A production, only the shrinkage of machines using it.

Because of the supply remaining the same but the demand slowly shrinking I predict R-404A to actually go down in price next year. My prediction is that we will see single cylinder price at the end of next year hovering right around $85-$90 a cylinder. We’ll see if I’m right!

If you’re interested in purchasing R-404A by the cylinder I advise you to check out our Amazon and E-Bay partners for the best deal.  If you’re looking at purchasing more than a few cylinders at a time please check out our Bulk Purchasing page and we will see what we can do for you.

1234YF HFO

1234YF Refrigerant & Refrigerant
HoneyWell’s Solstice 1234YF Private Brand

Background

1234YF is one of the highest priced refrigerants on the market today. A ten pound cylinder goes between $700 to $800 a cylinder. This is substantially higher than it’s HFC counter part R-134a. The reason this HFO is so high in price is due to the demand. At this point in time there just isn’t that much demand for it. Even as I write this towards the end of 2016 the majority of vehicles in the United States are still using the trustworthy HFC R-134a for their refrigeration systems.

While 1234YF is the minority today it won’t be for long. There is already a scheduled plan to phase out R-134a across the United States starting in 2020. (2021 model years on vehicles.) The phase out will be staggered like most of the other refrigerant phaseouts but the process will start in only three short years. Hard to believe 2020 is that close. On top of our phase out the European Union has already phased out R-134a entirely and has moved the majority of their new vehicles over to 1234YF or to other lower Global Warming Potential alternatives.

Price

Over the course of 2016 the price of 1234YF has fallen, albeit slowly. We started the year right around $750 and we are ending the year at a price at or just below $700 for a ten pound cylinder. If I was to predict what would happen next year I would say almost exactly the same thing as this year. The addition of more cars to the marketplace will create more demand for manufacturing. Honeywell and Chemours will respond accordingly and start to add more of it to the market. This will be a slow creep effect and I could see at the end of 2017 that we will be looking at a price of around $620-$650 a cylinder.

As the years roll by and the refrigerant becomes more popular I see us going under $500 but not much lower than that. When the phaseout of 134a starts in 2020 I could see 1234YF jumping up in price for a a few months but as the phaseout wears on the price of 1234YF will settle back down to around $500-$600. In my opinion, the days of lower priced HFCs are gone. HFO’s will always be higher than what we are used to today with our low cost environmentally damaging HFCs. My final prediction for 2017 on 1234F is $635.00 for a ten pound cylinder this time next year.

If you are interested n purchasing 1234YF than I suggest your visit our friends over at Refrigerant Depot. We’ve been partnered with them for the past couple years and they have provided the best product and service to our customers.

Conclusion

As I said at the beginning of this post these predictions are just that… predictions. No one knows exactly what will happen next year and anyone who claims to know is making it up! Here’s hoping that I’m right on 1234YF and 410A and am dead wrong R-22! No one wants to see the price go up. (Well at least I don’t.)

I hope all of you enjoyed my post and my fortune telling on next year’s market trends. Here’s to a happy new year and I wish everyone the best sales next summer!

Thanks for reading,

Alec John Johnson

Owner.