Published 14:54 ET 1 May 2021 |
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The smell of chlorine could be more elusive than usual this summer.
This is because the swimming pool industry is struggling with a chlorine deficiency that has caused the price of the chemical to rise, forcing pool owners to consider alternatives.
“Pool chlorine is not easy to obtain and there is a chlorine deficiency nationally that we all have to tackle,” said John Swygert, CEO of Ollie’s Bargain Outlet Holdings, investors during a recent conference call.
While chlorine demand jumped in 2020 as Americans spent more time at home with their pools due to the coronavirus pandemic, this year’s shortage stems largely from an incident at a facility in Westlake, Louisiana, in August.
The bio-lab factory for pool and spa treatment products experienced a devastating fire on the morning of August 27, 2020 after Hurricane Laura’s attack. No one was injured, but the incident destroyed the roof of the plant and bumped production, according to a report from the US Chemical Safety and Hazard Investigation Board. Chlorine gas was released during the incident.
Since then, the supply of chlorine products has been limited.
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Now that the summer pool season is ready to begin, pool owners should embrace a jump of approx. 58% from June to August compared to the same period the year before, according to IHS Markit data quoted in a Goldman Sachs report on chlorine deficiency.
“It’s likely to remain at an (elevated) level because I think the industry will be short for the season,” Peter Arvan, CEO of swimming pool distributor Pool Corp., said in a earnings call on April 22.
Goldman Sachs conducted an unscientific survey of 26 pool supply stores, in which 15 expressed “uncertainty or doubt when asked if they want enough chlorine for the pool season,” analyst Kate McShane wrote in a research note.
“Our standard bucket of 3-inch chlorine tablets, which is the backbone of many pools right now, has largely become scarce,” said Thomas Race, owner of the Aqua Caribbean Swimming Pool Service in Gainesville, Florida.
Pool chemistry expert Rudy Stankowitz suggested that pool owners only buy what they need for the season. For most, it will be just a single bucket of chlorine tablets.
“I think the severity of the shortage will be directly related to people buying in reasonable quantities,” said Stankowitz, CEO of Aquatic Facility Training & Consultants. “If you stock, it will make it even harder to find.”
While there are other pool cleaners like algae, they are more expensive and less effective than chlorine.
Many pool owners are due to a shock as they have already experienced increased prices on other pool related topics by 2020.
Mia Bagby, a Gainesville pool owner, was completely unaware of chlorine deficiency.
“I had not heard of it at all,” she said. “I want to read about it now.”
Stankowitz said chlorine deficiency could snowball into panic buying other pool cleaners as the chlorine supply is low.
“You can easily find people who can’t find chlorine tablets who buy all the bleach from the supermarket shelves,” he said, “and then we run into another bleach shortage because people dump it in their pools.”
Stankowitz said bleach is half the strength of chlorine and warned pool owners to avoid using splash-free bleach as it contains little chlorine but mixes in several dangerous additives.
Manufacturers are encrypting to fill the void left by the Bio-Lab fire, but it will not be easy to even out the difference.
The shutdown has caused “extended downtime” at a plant owned by chemical maker Tronox Holdings, contributing to a $ 10 million reduction in earnings, co-CEO Jean-Francois Turgeon said Thursday in an earnings call.
Some manufacturers have been able to escape the worst of it.
Hans-Ulrich Engel, CFO of global chemical manufacturer BASF, said on Thursday in an earnings call that “our competitors’ chlorine plants” are facing “ongoing supply chain distortions”, but that BASF is largely isolated from problems.
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