Predictions

Update

Well folks, we are now halfway through the year and there are only six months left until the January 1st, 2020 deadline hits for R-22 refrigerant. Yes, in just six months we will no longer be able to import or produce R-22 refrigerant within the United States. When that date arrives the only way to obtain R-22 will be through reclaimed product or through a distributor who stockpiled the virgin refrigerant before the deadline came.

As the date came closer everyone thought that the prices would go up and up. In fact, as the 2019 year has progressed we have seen the opposite. It seems that with each passing month the price on R-22 is going down and down. In many circles I have seen the price for a thirty pound cylinder drop under three-hundred dollars. While there is no way to tell for certain why we are seeing such a drop in pricing there are a couple of factors that could be playing a part.

We already saw the massive price increase back in the summer of 2017. At one point prices were as high as seven-hundred dollars a cylinder. This increase was mostly speculation. Folks knew that the end was coming so they tried to make as much profit as they could. The problem was that with such a high price point customers began looking for alternatives to R-22. With prices as high as they were alternatives were a viable possibility and we saw dozens of R-22 alternatives come to the marketplace.

The surplus of alternatives and the end of the 2017 season caused the prices to slowly settle back down. Ever since the fall of 2017 we have seen R-22 prices slowly slide down. However, this year is the lowest I have seen it in years. I had thought earlier this year that if prices were to go up it would either be mid-summer or at the end of the year when the phase out went into effect. So far though, summer has seen pricing do down. I believe this is caused by the refrigerant distributors dumping their R-22 virgin product.

The phase out is coming and the machines that are using R-22 are getting older and older. At a minimum they are over nine years old. (Remember, no new R-22 machines allowed starting in 2010.) The demand for R-22 will shrink with each passing year. It is a war of attrition. What we may be seeing now is distributors just cutting ties with the refrigerant, or at least they are significantly lowering their product on hand before the phase out goes into effect. After all, if they hold on to it for too long they may end up seeing extremely diminished demand.

With prices this low reclaimed refrigerant and even alternatives to R-22 are not a viable possibility. Why even bother with purchasing reclaimed or alternatives if the virgin product is the same price… or even cheaper? For reclaimed refrigerants/alternatives to be useful we have to see the R-22 price hovering around five-hundred dollars. Right now, they are just not competitive at the current R-22 price of under three-hundred dollars.

At this point it is anyone’s guess as what the next six months have in store for us. We may end up seeing more distributors dumping product and causing the prices to go down even lower. Or, we could finally start to see the surplus of overstock R-22 start to diminish. If this occurs before the January 1st deadline then we could see a significant price increase. The problem is there just no way to tell how much virgin R-22 product is out there sitting in warehouses across the country. Who knows, there could be so much product on the shelf right now that the virgin product will outlast the R-22 machines today and the price we see today could be the new normal for the next few years.

Thanks for reading,

Alec Johnson

RefrigerantHQ

alert

In the beginning of this year I got into the habit of writing refrigerant pricing updates as I saw them coming. Most of these have been fairly benign with a few percent increases here and there. It was last month though that I wrote a pricing update that had pricing doubling on some of the most popular refrigerants in just a matter of days. The article can be found here.

This huge jump in price can be tied to a new suit filed with the Department of Commerce. This suit which was filed by the HFC Coalition aimed at installing anti-dumping tariffs on HFC components. For those of you that do not know, a few years back there were anti-dumping tariffs put on some of the most popular HFC refrigerants used today: R-410A and R-404A. These tariffs targeted Chinese product that was being unloaded in the United States at ultra low prices.

The problem with these tariffs though was how they were written. The tariffs themselves ONLY applied to R-410A and R-404A. Remember folks, that these two products are blended refrigerants. While the tariff was on the finished product it wasn’t on the components to make the blend. So, your refrigerants like R-125 and R-32 were immune from the anti-dumping. This resulted in a halting of imports of R-410A/R-404A and instead we saw massive importing of the components to blend these refrigerants. This flood of refrigerant components caused the price to stay pretty much were it was before the anti-dumping tariffs were installed. Nothing had changed except now distributors were blending Chinese refrigerants in the United States.

The Suit

I won’t get into all of the details here as it would be repetitive from my last article. Instead I’ll give a short summary and then move onto the update. In order to prevent these low prices and the continuing flood of Chinese refrigerants a suit was introduced to the Department of Commerce. This suit aimed at solving the problem when it comes to HFC refrigerant blends by adding a tariff to ANY HFC components that were used to create a blend within the United States. In other words, you can import R-125 all day long but the moment you use R-125 to create R-410A then you have to pay a tariff.

This suit was filed in early April and originally a decision was to be made today May 20th, 2019. Well, the deadline came and went and there was still no decision made. Instead the Department of Commerce issued a statement saying:

“According to 19 CFR 351.225(c)(2), “{w}ithin 45 days of the date of receipt of an application for a scope ruling, the Secretary will issue a final ruling under paragraph (d) of this section or will initiate a scope inquiry under paragraph (e) of this section.” However, “unless expressly precluded by statute, the Secretary may, for good cause, extend any time limit.” We have determined that additional time is required to review and assess the HFC Coalition’s request. Thus, in accordance with 19 CFR 351.302(b), we are extending the time-period for initiating a formal anti-circumvention inquiry by 45 days, until July 3, 2019.”

So, the can has been kicked down the road and we are now left with even more uncertainty. Before I get into pricing I want to make sure everyone understands that IF the DOC decides to take this suit up on July 3rd then EVERY blended refrigerant from July 3rd up until the decision date of the suit could be retroactively taxed the tariff. So, if I imported a heap of R-125 and R-32 in August, mixed them as 410A, and then sold them in September then I could be liable for tariffs… even if the DOC’s decision doesn’t come until February of 2020.

Pricing Update

That clause I just mentioned above is why we saw prices go crazy last April. The price of HFC refrigerants seemed to jump overnight when news of this hit the industry. Everyone was buying up as much as they could from their distributors and the distributors were buying as much as they could from China before a decision was made to accept the suit or not. In some cases we saw prices double.

Today however, I have good news. The prices on HFCs have begun to settle down. It’s hard to say exactly why this is but it appears that the initial shock of tariffs on components have worn off. Or, it could be that everyone and their brother have bought up so much that the demand has ultimately died down. Whatever the reason is prices have gone down since May. While we are still not near where we were before, we are in a much better spot then we were a month ago.

In my last article I did a break down of pricing on R-410A and R-404A. Let’s take a look again but with this week’s prices:

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

  • Fall 2017 – $140
  • Fall 2018 – $65
  • Jan 2019 – $68
  • Feb 2019 – $56
  • Mar 2019 – $49
  • Apr 2019 – $100 – News of possible tariffs
  • May 2019 – $78

R-404A – Twenty-Four Pound Cylinder Pricing:

  • Fall 2017 – $175
  • Fall 2018 – $80
  • Jan 2019 – $70
  • Feb 2019 – $58
  • Mar 2019 – $50
  • Apr 2019 – $105 – News of possible tariffs
  • May 2019 – $89

Conclusion

As you can see, we are moving downwards… but it is very tough to say what will happen in the future. There is still a lot of uncertainty in the industry and it is anyone’s guess as to what the Department of Commerce will decide on July 3rd.

One other point to mention here is that there was some talk on the latest tariffs from the Trump Administration. These tariffs are unrelated to the anti-dumping tariffs but are instead retaliatory taxes in the ongoing trade war between the United States and China. They were to be twenty-five percent on selected harmonized codes.

At first I understood that HFC refrigerants, and components, were affected by this tariff. But now, I have heard that an exemption was made specifically for HFC components. I have searched online trying to find specific information but it is quite murky, and I have not been able to find anything concrete. If any of you have further information on this topic please reach out to me and I will update this article.

Thanks for reading and hope everyone has a great Memorial Day! I’ve got a barbecue with my name no it. Cheers!

Alec Johnson

RefrigerantHQ

alert

Hello all, I apologize for the two e-mails in one day but I figured this one was worth it. Over the past week I have had a few notifications from my contacts within the industry about incoming price changes.

First, before we get into what these changes are I want to take a look at why they are occurring. A few years back there was a suit filed with the International Trade Commission. This suit claimed that refrigerants from China were being dumped into the United States market at unfair prices. This dumping caused the prices on the most common HFC refrigerants to sink lower and lower.

In 2016 the Trade Commission ruled in favor of tariffs on imported HFC refrigerant blends from China (Two-hundred and ten percent tariff – Source from CoolingPost.com) The problem here though was that the Trade Commission’s ruling was on on HFC blends and not their components. That meant if you imported R-410A into the United States from China you would face a two-hundred and ten percent tariff, but if you imported R-125 and R-32 from China and then blended them within the US then you could work around the tariffs.

Obviously, this was a big hole. With this ruling there was going to be very little impact on HFC blend pricing. Sure, there is the extra cost of having to blend the product, but it is minimal when compared to purchasing competing product. The low priced product from China continued to flow freely.

The New Case

Everyone knew that the anti-dumping tariff had to be put in place on the components of blended refrigerants as well. But, in order to justify a new case with the Trade Commission it had to be proven that the tariffs instigated in 2016 were not effective and that companies were navigating around them by importing component refrigerants. From what I have read there needs to be at least a couple years of data in order for a case to move forward and be legitimized.

Well folks, here we are in 2019 and years have passed since the initial anti-dumping tariffs were passed. It is now time for a new case with the International Trade Commission. Yes, on April 4th, 2019 the American HFC Coalition and it’s members filed a new anti-dumping case with the Trade Commission. An excerpt can be seen below:

Section 781(a) of the Act is designed to address circumvention of an order by imports of out-of-scope merchandise, such as HFC components, that are completed or assembled in the United States after importation. As described below, the statutory criterion for initiating an anticircumvention inquiry are satisfied in this case. Evidence establishes that iGas USA, Inc., and its affiliate BMP USA, Inc., are mixing HFC blends in the United States using HFC components imported from China.

The process of blending HFC components from China into in-scope HFC blends adds only [ ] per kilogram of the finished HFC blend. As such, the blending performed by iGas and BMP is “minor or insignificant” within the meaning of section781(a)(1)(C) and 781(a)(2) of the Act. Additionally, the imported R-32, R-125, or R-143a, as the primary inputs of HFC blends, account for a “significant portion” of the total value of the merchandise within the meaning of section 781(a)(1)(D) of the Act. For these reasons, HFC components imported from China by TTI, Lianzhou, iGas and BMP are circumventing the antidumping duty order on HFC blends. Consequently, these components should be included within the antidumping duty order on HFC Blends from China pursuant to Section 781(a) of the Act.

As you can see, they have referenced companies bringing in HFC components from China and then mixing them in house to create R-410A, R-404A, and other popular HFC blends. Here is where things get a bit different though folks. Most people within the industry knew that this was coming. They had expected it to hit this year even, but what’s different is that the expected case was to be on the component refrigerants coming in from China. This new case though aims at the actual blending process. If you import HFC components into the United States from China and you then use those components to create a refrigerant blend that has a tariff then that tariff will apply to your newly blended refrigerant. In other words, you will be charged the tariff on R-410A even though you didn’t actually import R-410A. (You imported R-125 and R-32 instead.) An excerpt from the case is below as well:

COMMERCE SHOULD INCLUDE HFC COMPONENTS, “COMPLETED OR ASSEMBLED” IN THE
UNITED STATES INTO HFC BLENDS, WITHIN THE SCOPE OF THE ANTIDUMPING ORDER
PURSUANT TO SECTION 781(A) OF THE ACT.

All of this is preliminary. There is nothing official yet. The Trade Commission hasn’t even decided if they are going to investigate the matter. Their decision is expected to come towards the end of May. If the Commission does decide to investigate this case then we may have to wait a year, or more, to find out what the results are and if they will be levying a tariff on the blending of HFC refrigerants. Here’s the kicker though folks, if they do accept this case and rule in favor of a tariff a year down the road they could also make the decision to retroactively enact the tariff on blending refrigerants. That means that from the moment they accept the case up until their ruling refrigerant distributors could have to pay the new tariffs on their blended refrigerants… even on product that have already been sold. This is a worst case scenario, but if it does happen a lot of companies will have to write off these tariffs on product that they sold a year ago.

Price & Availability

As a direct result of the scenario above we have begun to see chaos in the HFC pricing and availability market here in the United States. In just a few days after the announced case two major refrigerant manufacturers sent notifications that they would no longer be accepting HFC refrigerant orders. Think about that for a second, two out of the four major manufacturers are no longer accepting orders. (I won’t name names here, but I’m sure you can make a good guess.) These companies put a hold on their distributing refrigerant because everyone is buying as much refrigerants as they can as soon as they can. Everyone is trying to beat that May deadline when the Trade Commission decides rather to pick up the case or not. That date is critical because, as we discussed before, if they do decide to investigate then ANY product brought in after that date could be subject to an anti-dumping tariff.

Along with the two manufacturers who are no longer taking orders I have another mailer from a third global manufacturer. While this mailer isn’t stopping orders it is announcing a large price increase on all of their HFC refrigerants. This company announced an increase of eighty cents a pound on their various HFC refrigerants such as: R-410A, R-407A, R-407C, R-404A, and R-507. For some reason, R-134a was also mentioned as having an increase although theirs was smaller at sixty cents more per pound. Having R-134a in here is strange since it is not a blended refrigerant, but this may have been thrown in there just because.

Based off of the increases mentioned above let’s take a look at one of the most popular refrigerants and how they are impacted. Remember, that these prices are always ball park and can change at any time:

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

  • Fall 2017 – $140
  • Fall 2018 – $65
  • Jan 2019 – $68
  • Feb 2019 – $56
  • Mar 2019 – $49
  • Apr 2019 – $100

R-404A – Twenty-Four Pound Cylinder Pricing:

  • Fall 2017 – $175
  • Fall 2018 – $80
  • Jan 2019 – $70
  • Feb 2019 – $58
  • Mar 2019 – $50
  • Apr 2019 – $105

Conclusion

These two pricing trends above really tell the story on what has happened over the past week or so. The prices on these HFC blends have nearly doubled. ALL of this is due to speculation and rumor as to what the Trade Commission will decide. Will they take up the case? Or, will they hold off? 

Also, another point that I didn’t mention is that it’s not just the larger global manufacturers that are having a run on their HFC inventory. The Chinese are seeing huge trailerload orders placed as a last ditch effort to get as much product on hand as possible before a possible tariff begins. If this keeps up there very well may be a global shortage of R-125 again similar to what we saw in the spring of 2017. (At some points during that year we saw 410A and 404A prices upwards of four-hundred dollars.)

The only good news I can offer here is that once the May deadline approaches things began to slow down. Right now it is the uncertainty that is driving the market mad. At least once a decision is made everyone can sleep a bit easier. 

Thanks for reading,

Alec Johnson

RefrigerantHQ

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