After a series of price hikes in July, pool and spa chemical manufacturers raised prices again in October, citing higher raw material costs.
Another round of increases is expected in January.
“We’re sensitive to price increases, so we’ve tried to [see what’s] behind them, but these are real,” said Manuel J. Perez de la Mesa, president/CEO of PoolCorp in Covington, La. “Manufacturers have been absorbing these increases and holding the line as long as possible before they passed them on.”
From July 2008 to January 2009 the increases will be considerably higher than 20 percent, with some reaching up to 30 percent, de la Mesa added.
Though fuel prices have played some role in the rising cost of chemicals, raw materials appear to be the primary culprit. In particular, cyanuric acid, which is bought almost exclusively from China, has become more expensive, making the production of dichlor and trichlor products more costly.
Distributors now are faced with raising prices in an increasingly competitive market.
“The biggest challenge we have is [that even] with solid price increases, we’re not able to pass them all on in the short-term because competitors in the market still have chlorine at an old price,” said John Coulier, vice president of sales and marketing at Quality Pool Supply Co. in Clio, Mich.
Eventually, distributors will have to adjust their prices to stay in business, according to de la Mesa. Chemicals cannot be stored as easily or for as long as pool equipment, and therefore any increases will move down the supply chain at a faster rate.
Big orders, on the other hand, may be on hold as companies take a wait-and-see approach to fall purchases.
“Based on the economy, we’re seeing a reluctance to commit to buying at this time of the year,” said Vernon Ketron, president of Appatek Industries in Concord, N.C. “We’ve talked to a lot of people, and they’re just not putting their cards on the table.”
Service companies also are concerned about the impact on homeowners.
“We have to continually raise our rates to make money, so it’s really hard,” said Dave Lopez, owner of Dave Lopez Pool Service in Granada Hills, Calif. “A lot of us are afraid of doing it because we don’t want to lose any accounts.”
Even with the economic downturn freezing consumer budgets, someone will have to pay for basic pool sanitation.
“[The increases] are not going to affect demand to any significant degree because the pools have to be maintained,” de la Mesa said.