Update

R-22 Refrigerant June 2019 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

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