Supply Chain Impacts Refrigerant Prices
A worldwide demand for sulfur and the resulting sulfuric acid is adding to pricing pressures on HCFC and HFC refrigerants that contractors use every day.
The issue first arose with an announcement in early March from Honeywell Fluorine Products about a price increase for HFC-134a that the statement said impacted automotive customers in North America. When The NEWS contacted Honeywell officials later in the month for a comment related to the stationary sector, those officials - David Diggs, global business director for refrigerants, and Rob Donohoe, director of communications - confirmed a more industry-wide impact.
“Fluorocarbon producers in the U.S., Europe, and China have been impacted by a sudden and dramatic cost increase for sulfur and sulfuric acid,” said Donohoe. “Global sulfuric acid prices have risen by more than 500 percent in recent months due, in part, to a strong increase in demand for agricultural fertilizer worldwide.”
And just as sulfuric acid is widely used in the production of fertilizer, Donohoe said it is also “a key raw material used to produce hydrofluoric acid (HF), which is a key raw material used in the manufacture” of HCFCs and HFCs.
“This is an issue of a long supply chain impacting customers,” said Diggs. He noted that in addition to the pressures on raw materials, that chain is also affected by rising costs of gas and oil that is affecting the processing and delivery of the end product.
A further pressure could soon come with supply issues regarding R-134a, he said. He noted that R-142b has long been used as a blowing agent, but as an HCFC, it is facing phaseout in the next few years. R-134a has been earmarked as a component to replace R-142b.
Diggs said contractors should continue to use “best practices” in the handling and use of all refrigerants to better control their costs. This includes, he said, making sure systems are leak tight and that recovery and recycling are used as much as possible.
Publication date: 04/14/2008
The issue first arose with an announcement in early March from Honeywell Fluorine Products about a price increase for HFC-134a that the statement said impacted automotive customers in North America. When The NEWS contacted Honeywell officials later in the month for a comment related to the stationary sector, those officials - David Diggs, global business director for refrigerants, and Rob Donohoe, director of communications - confirmed a more industry-wide impact.
“Fluorocarbon producers in the U.S., Europe, and China have been impacted by a sudden and dramatic cost increase for sulfur and sulfuric acid,” said Donohoe. “Global sulfuric acid prices have risen by more than 500 percent in recent months due, in part, to a strong increase in demand for agricultural fertilizer worldwide.”
And just as sulfuric acid is widely used in the production of fertilizer, Donohoe said it is also “a key raw material used to produce hydrofluoric acid (HF), which is a key raw material used in the manufacture” of HCFCs and HFCs.
“This is an issue of a long supply chain impacting customers,” said Diggs. He noted that in addition to the pressures on raw materials, that chain is also affected by rising costs of gas and oil that is affecting the processing and delivery of the end product.
A further pressure could soon come with supply issues regarding R-134a, he said. He noted that R-142b has long been used as a blowing agent, but as an HCFC, it is facing phaseout in the next few years. R-134a has been earmarked as a component to replace R-142b.
Diggs said contractors should continue to use “best practices” in the handling and use of all refrigerants to better control their costs. This includes, he said, making sure systems are leak tight and that recovery and recycling are used as much as possible.
Publication date: 04/14/2008
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