The recession has not drowned pool maintenance expenses. From summer 2008 through the beginning of 2009, increases in the cost of chemicals have cumulatively added anywhere from 15 to 30 percent to the cost of chlorine, algaecides and additives.
Chlorine costs are generally the highest chemical costs for most pool operators, noted John Whitmore, recreation superintendent for the city of Denton, Texas, and president of the National Recreation and Park Association’s Aquatics Branch. And one of the biggest impacts on price increases has been the cost of raw materials.
In the aquatics industry, raw material costs are especially critical. Unlike other household products, which may be diluted heavily with water, the make-up of most sanitizers is primarily raw chlorine. Even most algaecides are 40- to 50 percent active.
As such, raw materials pricing weighs heavily into the operating costs of a manufacturer.
“The most important thing in our industry is material costs,” says Charlie Schobel, BioLab’s vice president and general manager, pool and spa products.
The largest determinant of raw materials pricing for aquatic chemicals is the chlor-alkalai market, which has been in a state of flux for some time. Plants that produce chlorine also product alkalai, or caustic soda, and the two don’t necessarily find the same kind of buyers.
High fuel costs are another factor because manufacturers pass on surcharges incurred from freight carriers, along with packaging.
“Many areas that are dedicated to using sodium hypochlorite (bleach) are seeing costs rise due to transportation costs,” Whitmore said.
Like gas and oil prices, packaging also is influenced by market fluctuations. Consider that the primary raw material that goes into packaging is polyethylene, which is used to make soft plastic bags and rigid 5-gallon buckets.
“If you rewind and look at the prices for those raw materials a year ago, they were on the verge of reaching their all-time historical high,” explained Howard Rappaport, who studies the plastics and polymer markets for Chemical Market Associates Inc. in Houston.
Ultimately, some say the price hikes are the result of a long period of artificially low-cost pool chemicals. “At the end of the day, chemicals in this industry have been a bargain for a very, very long period of time,” said Manuel J. Perez de la Mesa, CEO of PoolCorp in Covington, La.
While no one will forecast when markets will stabilize again, Whitmore believes it’s likely to have an impact on decision-making as operators plan ahead.
“The swing in its cost is nowhere near the swing in natural gas and electricity we have seen in the last several years. Pools had to absorb those costs and that just about sums up what pools are doing with other increases in supply costs,” he said. “I think the long-term result will be that operators will be taking longer looks at chlorine generation such as with saltwater pools.”
