Brace for High Refrigerant Prices this Summer

Supply struggles in China, anti-dumping duties in US are contributing factors.

Contractors may well have been wondering about the noticeable increase in R-410A prices. A 25-pound cylinder that was selling for about $150 back in December is now selling for about $240.

FINE CHINA

According to industry sources, the cause of recent price increases on R-410A and other hydrofluorocarbons (HFCs) can be largely traced to China. In January, the Chinese government strengthened workplace safety rules at fluorspar mines and in hydrofluoric (HF) acid plants. These new rules caused some of the HF plant operators to stop production until they could meet the new regulations. Since HFC refrigerants are made from HF, the short supplies of HF have impacted HFC prices. In addition, a major perchloroethylene (PCE) plant in China took an unplanned outage after an equipment failure in the beginning of the year. This plant supplied PCE, which is a key raw material to many of the largest HFC-125 producers in China. PCE is a key component of HFC-125, and HFC-125, in turn, is a key component of R-410A. Finally, antidumping duties imposed on imports of some Chinese refrigerants have contributed to the higher prices in the U.S. All of these factors add up to indicate that global supplies of R-410A could be tight — and, therefore, prices will be high — during the 2017 cooling season.

FACTORS IMPACTING HFC COMPONENTS

Jim Bachman, commercial director, Chemours North America Fluorochemicals, said several factors influencing raw materials in China used to produce refrigerants have impacted HFC component pricing and availability coming out of China and, therefore, around the globe. These factors include:
  • Lower inventories for producers during the period around the Chinese New Year;
  • A safety incident at an anhydrous hydrogen fluoride (AHF) facility, which has led to reduced availability of raw materials;
  • The increased environmental constraints in China on fluorspar and HF production as well as hydrochloric acid byproduct disposal; and
  • Tightness in the PCE supply.
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