People who pay attention to economic developments in China have been aware of a major shift in environmental policy. Last year, Chinese President Xi Jinping made improving the environment a greater priority in his five-year plan, marking a change from the past in which rapid growth was emphasized above all else.
In response, China has been implementing an aggressive environmental program with new, stricter governmental regulations. Included in this program is energy conversion from coal to natural gas in industrial applications, as well as new wastewater treatment standards.
The change is having a dramatic effect on China’s chemical industry production efficiency and costs. According to some media reports, as many as 70,000 chemical plants have been shut down or seen their production severely reduced.
Of particular importance for the pool and spa industry is the potential impact on Chinese-made goods sold in the U.S. Most of the granular and powdered cyanuric acid used in the U.S. for pool water stabilization is produced in China.
According to Art Harre, chief sales officer, Haviland USA, due to the rapidly increasing production cost in China, CYA pricing has rapidly increased by 40 to 50 percent and is in short supply.
“Currently, plants there are very tight on product. We have been notified by our Chinese factories that all purchase orders that we have placed with the factories are canceled, and must be re-issued at new, higher prices,” he says.
“Because CYA is the main component in both trichlor and dichlor, and there have been increases in caustic soda, chlorine and energy, there’s no way that won’t be felt by consumers here in the U.S.”
Harre notes that, to his knowledge, no American suppliers of trichlor or dichlor have raised prices to date, “but ultimately, if China goes through with this, it has to affect the price of dichlor and trichlor.”