Why are the cost of swimming pool chemicals on the rise?
Fueled by growing energy costs, shrinking supply and high tariffs, chlorine based chemicals for the pool and spa industry have risen in price by 20 to 50% since late 2004. The chlorine price today vs. the price ten years ago...is 200 percent higher. (*source: pool/spa news March 28, 2005)
The cost of trichlor tablets are up 70% from 1 year ago. The main reason being the tariffs levied in December 2004. Over the years foreign competitors, China and Spain have been "dumping" chlorine and other pool chemicals into the U.S. market forcing prices down. While great for the consumer, U.S. companies were unable to compete. In order to help U.S. companies in the market place a tariff was put in place on all imports. Thus the American companies raised prices dramatically.
The U.S. Department of Commerce has made a final determination on the anti-dumping margins that should be levied on Chinese and Spanish producers and exporters of chlorinated isocyanurates. The federal agency determined that the Spanish companies were selling chlorinated isos, including common pool sanitizers dichlor and trichlor, at margins of 24.8%. Margins from China were determined 75.8 to 285.6%. (*source: pool/spa news May 23, 2005)
"The Commerce Department issued a final finding that there was, indeed, dumping taking place," said Joseph H. Price, partner at Gibson, Dunn & Crutcher, LLP, the Washington D.C. based firm that represented Occidental Chemical Corp. and Clearon Corp. in the trade lawsuit. "Hopefully, we will get back to fair competition in terms of pricing and supply," Price said. "They (U.S. companies) have had tremendous increases in their cost of production in terms of energy costs and raw materials cost, which they were not able to recoup because of the pricing situation." (*source: pool/spa news May 23, 2005)
Imports of isos arriving in the United States are subject to duties based on the preliminary decision. If the ITC issues a permanent anti-dumping order, those duties will rise to a higher margins and remain in effect for five years. This may not bode well for companies that rely on purchasing bulk quantities of dichlor and trichlor from importers. The investigation into the pricing practices was initiated in May 2004 by Occidental and Clearon, both makers of chlorinated isos. Isos are chlorine-containing derivatives of isocyanuric acid and are used as bleaching and disinfecting agents. In the Untied States, swimming pool and spa sanitation accounts for 70 percent of the chlorinated isos market. (*source: pool/spa news May 23, 2005)
*Source: Pool & Spa News issues published March 28, 2005 "Hefty Chlorine Price Takes Effect" by Shabnam Mogharabi and May 23, 2005 "Final Duties Set on Imported Chemicals" by Shabnam Mogharbi
How does this effect Tropical Pool and Spa Services?
Tropical Pool and Spa Services will be forced to adjust the prices we charge for swimming pool chemicals. Coupled with rising cost of chemicals, gasoline and other business overhead, in order to stay competitive, we must make these adjustments. Over the years we have resisted price adjustments and will continue to do so whenever possible. Please understand that price adjustments are only due to current market forces.