Chlorine Prices Going Up… Tablet Shortage Continues

Millions of homeowners can expect to pay more to clean and sanitize their swimming pools this summer. According to financial analysts the chlorine shortage we first reported on in September has not improved in the slightest. The fact is that the outlook looks bleak through the summer for the situation to improve.

Why are Chlorine Tablet prices so high right now?

Kate McShane of Goldman Sachs warns in a recent research report released Monday that the chlorine shortage in the United States has not improved. Shortages and price increases stem from an enormous fire at the BioLab factory, one of the country’s largest chlorine tablet manufacturers. The fire put an additional stress on already dwindling supplies.

McShane indicated that prices for chlorine have gone up roughly 37% year over year due to the ongoing shortages. Prices are expected to spike 58% year over year through June to August. This coincides likely enough with the height of pool season. Homeowners are sure to be looking at much higher prices than in previous years.

“Of the 26 pool shops we spoke to, 15 expressed uncertainty or doubt when asked about whether they will have enough chlorine for pool season. Adding to the pressure created by the chlorine shortage, respondents called out a plastic bucket shortage, driven by COVID-related manufacturing slowdowns, which has made procuring certain volume sizes of chlorine more difficult for retailers, and has led suppliers to deliver chlorine in either bags or in buckets with different colored lids, according to respondents,” McShane said.

McShane continued, “When asked about whether the cost and availability of chlorine have improved in the last month or so, several respondents noted that while the supply of chlorine has improved somewhat, cost has not.”

Commentary from the industry’s main pool equipment supplier Pool Corp. on its recent earnings day underscores the severity of the chlorine shortage.

Recent comments from Pool Corp. the industry’s leading supplier of pool equipment emphasize how badly the supply chain has suffered in recent months.

“I mean overall, I would tell you the price on dichlor and trichlor [chlorine tablets], which is the product that was impacted by the shortage, they’re up about 60%. So if you think about how that’s going to shake out for the balance of the year, it will probably remain at elevated level because I believe that the industry is going to be short for the season,” Pool Corp CFO Mark Joslin explained to analysts on a recent earnings call on April 22.

Homeowners Looking for Chlorine Alternatives

Homeowners are bound to look for creative sanitization solutions due to the shortage, Joslin said.

“Now that simply means that people are going to move their method of sanitization to another product, either a granular product or liquid chlorine. But there’s no shortage of ways to sanitize the pool. It just simply means at a certain point people will shift. We’ve also seen certain parts of the country accelerating the use of salt as a method of sanitization too,” Joslin added.

Despite the increasing prices, shares of Pool Corp continue to rise. Shares this quarter are up 11% as Pool Corp continues to absorb market share in a market where seemingly everyone is looking for a pool. First quarter sales and profits rose 57% and 165%, respectively.

Fairview, TX based Orenda Technologies summarized this years price hikes when they stated “Between manufacturing shortages, health and safety protocols and shipping delays, costs in all aspects of the supply chain are higher than ever thanks to COVID-19. This is not just in the pool business, it’s pretty much the entire global economy. Unique to pools, however, is the catastrophe of losing a major chlorine manufacturing plant, responsible for over a third of domestic trichlor production. That hits everyone hard.”