The 410A supply dilemma

A contractor in South Carolina emailed me a few weeks ago, mentioning that the price for a jug of R-410A is down from $300 at the beginning of this year to around $150.

• I asked other contractors if they’re seeing the same trend, and they said yes: Jugs are going for less than $200 in certain parts of California, New Jersey, and Georgia — all down from early 2024.

Back up: In 2021, a year after the AIM Act kicked off today’s refrigerant transition, importers and wholesalers stockpiled HFCs, including 410A. 

• FluoroFusion’s Brad Kivlan told me that based on EPA data, HFC producers, importers, and reclaimers had over 460 million metric tons of CO2 equivalent (MTCO2e) on hand at the end of 2021.

• “There’s been a pretty big supply of HFCs that have been stockpiled,” Kivlan said. “And that’s prevented any supply disruptions and increases in the price — prices have actually come down.”

Yes, but: The same EPA data shows inventories are dwindling. 

• What’s happening: End-of-2022 inventory fell 16% year-over-year to just over 387 million MTCO2e.

• And 2023’s numbers, released a few weeks ago, showed another 2% drop to 378 million MTCO2e.

• Okay, that acronym gives me a headache. EPA, if you’re reading, please change.

The big picture: According to the EPA, less than 2% of HFCs are recovered and reclaimed annually.

• “There’s a very large installed base of 410A equipment, and there’s gonna be a lot of aftermarket demand for 410A and other HFCs,” Kivlan said.  

• “That’s when it becomes crucial that we get more recovered material back from the field to reclaim,” he added.

Of note: Kivlan explained that reclamation today is more important than during the R22 phasedown. 

• “Why I think it’s more significant… is that there are no replacements for 410A that I’m aware of,” he said.  

• “We had plenty of R22 replacements during that phasedown.”

Zoom in: Simply recovering more gas would help solve the looming supply issue, but current conditions make it hard for reclaimers to really incentivize it. 

• “Reclaimers can’t pay as much money for recovered HFCs if the prices are so low, because the cost of processing takes a lot of the profit out of it,” Kivlan noted.

“In my experience, when the market prices of refrigerants are up and reclaimers can pay a higher dollar amount, recovery rates go up.”

What’s next: Today’s prices aside, demand will eventually outstrip supply. “Whether that’s next year or the year after, I don’t know, but it will happen,” said Kivlan.

• The EPA will publish 2024 inventories around this time next year.

Have any thoughts? Shoot me an email