Honeywell, Chemours hike R-454B prices

Refrigerant suppliers Honeywell and Chemours have announced price increases for their R-454B products, citing rises in raw materials costs, according to two emailed statements obtained by Homepros. 

Why it matters: The increases compound already-elevated manufacturing costs for A2L equipment and new tariffs imposed on countries worldwide, further driving up prices across the industry. 

What’s happening: Honeywell on April 11 announced a 42 percent surcharge for orders placed on or after February 15, “reflecting a portion of the increased costs we are exposed to through recent tariff announcements,” the company wrote in an email. 

• Additionally, Honeywell is implementing a $4-per-pound increase on all new orders of the refrigerant as of April 9. 
• Chemours, following suit, on Thursday announced a $2.85-per-pound increase on all open R-454B orders expected to ship starting May 1, along with all new orders, according to an email to customers. 

Zoom out: The increases come as contractors nationwide have recently reported difficulties obtaining the refrigerant.

• Brian McDaniel, who owns a Virginia-based supply house, told ACHR News last month that after placing an order earlier this year, “[W]e started getting emails from our refrigerant suppliers that we could only buy four jugs of R-454B at a time.”
• “Then the emails said that they were completely out,” he added. “So I started digging, and I found a place to buy R-454B, but they were charging $730 a jug.”

Of note: In the same report, representatives from Chemours and Lennox confirmed the challenges, but said they primarily stemmed from cylinder availability.

• Yes, but: Joe Giannetti, a general manager at Worthington Enterprises, the U.S.’s largest refrigerant cylinder manufacturer, noted, “[W]e are well-positioned to fulfill all current orders.”
• Worthington Enterprises didn’t return a request for comment.

The big picture: HVAC manufacturers anticipated sales of R-410A equipment to continue during the first quarter, but A2L demand appears to have arrived early, with products selling in mid-February, according to a recent report. 

• “On the residential side, less than 10 percent of our sales are R-410A at this point,” said one supplier last week. 

Between the lines: While neither Honeywell nor Chemours has made a public statement since the announcements, several sources familiar with the matters tell Homepros that the price increases are largely the result of “poor planning,” with tariffs being used as cover. 

• “Due to unprecedented demand for 454B, which cannot be met with domestic production alone, we are forced to source a significant portion of the supply through international markets,” Honeywell wrote.  
• “[W]e have reached a point where the cumulative effect of increased costs of raw materials needed to meet demand for 454B is no longer sustainable without affecting reliability,” it added. 

Currently, imported goods from most countries face a 10 percent tariff rate, while imports from China carry a 145 percent tariff. 

The bottom line: Near-term prices will rise, but, as with many transitions, the storm will likely pass, noted HARDI CEO Talbot Gee.

• “Once all manufacturers have fully transitioned and shipped their summer orders, we believe the service market will slowly fill out,” he said.
• Representatives for Honeywell and Chemours didn’t respond to requests for comment.