Monday, March 5, 2012

HCFC 22 Rising Faster Than Gold

You may wonder why HCFC 22 has suddenly spiked in price? Although we have all been expecting it to rise because of the phase-out, the rise in the beginning of this year has been dramatic. The phase-out is not all that is behind the latest price increases. Under the phase-out rules, producers and importers must have allocations from the EPA telling them how much product they are allowed to manufacture or import. The EPA has not published the allocation for 2012, so all production stopped on January 1. Nothing drives up price more than not making any more. On January 4, 2012 the EPA published a proposed rule-making that would significantly decrease the amount of HCFC-22 produced or imported compared to 2011. On January 20, the EPA sent a letter to producers and importers promising to not fine them for making HCFC 22 so long as they produced no more than 45% of the allocation set in 2011. So for the month of January, very little if any R-22 was produced or imported. Manufactures and importers can now produce R-22 in limited quantities due to the EPA letter of “No Action Assurance.” The rule may not be finalized until just before this summer. In short, the temporary halt of production and the uncertainty created by the lack of a final allocation and ruling are driving up the price. I would not recomend hoarding R-22 as a replacement for your gold investment  - prices and the market are just too unstable for anyone to predict. Once the final allocation is announced and the panic buying stops - the price may actually come down a little. For more information check out these articles

Now might be a good time to look into purchasing reclaimed refrigerant.

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