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- EXTRA EDITION
R-22 is an HCFC refrigerant due for eventual phaseout. According to EPA regulations, overall production of HCFCs has to be reduced by 35 percent beginning in 2004.
What does 2003 hold for supplies of R-22? Calls to various manufacturers and suppliers and conversations with some contractors offer the following points to consider:
Supplies“We have sufficient allocations to meet our customers’ needs,” said Honeywell’s David Metcalf. “There are not going to be any major shortages.”
Atofina’s Harry Swain noted, “There should be enough supplies of R-22 in 2003.”
DuPont’s Tony McCain echoed those sentiments. “Our supplies are adequate to meet demand. Supplies should be OK barring unforeseen disruptions.”
Jay Kestenbaum of Refron Inc. said that, basically, there should be “ample supplies of R-22 in 2003 based on supply and demand.” At the same time, he speculated that there could be spot shortages of R-22 down the road if the import pipeline flow is reduced and U.S. manufacturers, who may have been producing below capacity, are slow to step up production of R-22.
He also noted that manufacturers are devoting more and more attention to the production of R-410A, an HFC refrigerant being touted as the long-term replacement for R-22.
“The question is how much [R-22] will be coming to the market,” he said. “We will have to watch the market carefully.”
National Refrigerants’ James Lavelle predicted there would be adequate supplies of R-22, even after the 35 percent reduction in HCFC production kicks in. He noted that refrigerant manufacturers this year are getting rid of an-other HCFC, R-141b, used in making foam boards.
Because EPA regulations stipulate just an overall reduction in HCFCs, the elimination of R-141b contributes to HCFC reductions without necessarily affecting production of R-22.
CostsThe first of the year brought the announcement from some refrigerant manufacturers of a 20 cent-per-pound rise in the cost of R-22, followed by another 10 cent increase a few weeks later.
Other than official announcements like this, manufacturers are reluctant to speculate on or predict exact pricing, saying that it is a function of supply and demand. But in conversations with a cross section of the industry, the general feeling is that the days of varied costs for R-22 — including dips in price — is ending. The gut feeling is that prices are stabilizing, setting the stage for increases.
Said Metcalf, “R-22 fluctuated quite a bit in the past, but it’s not going to dip down. It’s going to start to go up.”
“The price is going to go up,” said Swain.
Nevertheless, Refron’s Kestenbaum said R-22 will remain the most economical refrigerant for some years to come versus the prime HFC alternatives, R-410A and -407C.
Off ShoreThe hottest issue since the first of the year concerns the EPA’s Allocation Allowance Final Rule. This complex ruling controls imports based on 1994-97 numbers. The rule became a law on January 21, when it was published in the Federal Register.
Its ultimate aim is to “restrict who can import HCFCs into the U.S.,” according to the EPA. In general, the industry interprets this as a way for the U.S. to control any massive influx of HCFCs primarily from India and China, sources that became more prominent since 1997.
“What’s happening is that a lot of imported refrigerant by certain parties can’t be imported anymore,” said Metcalf.
“Some contractors have been buying from importers. The future of that is an unknown factor,” said Swain.
“There were a lot of inexpensive guys out there, including upstart companies,” said Lavelle, noting that the stability of such companies could be questioned.
One positive effect of such action is the contention among those in the industry that some of the nonmainline imported refrigerant may not have been of the same high quality as refrigerant obtained through more traditional, established channels.
Because of this, high-profile manufacturers and suppliers in the United States are encouraging contractors to stick with reputable, established sources for refrigerants.
“Now is an important time to line up with the most reliable suppliers,” said Kestenbaum. “Don’t just look for the cheapest price without regards to reliability.”
Said DuPont’s Kevin O’Shea, “It is best to know who your suppliers are and make sure they are aware of any shifts in the market.”
He added that contractors also need to look more closely at alternatives to R-22 — such as R-410A for air conditioning and R-404A and R-507 in low-temperature applications.
Publication date: 02/03/2003