It’s almost hard to believe how quickly our markets, our world and our businesses have changed as we continue to emerge from the restrictive conditions of the 2020 pandemic. Some things we might see coming but many have taken and will continue to take, the professional snow and ice management community by surprise.
By now, most in the industry are more aware of how our economic infrastructure is experiencing spiraling costs and increasing limited inventory of various items that we use on a daily basis. The deicer industry is no different and has seen many changes with pricing and product availability.
Earlier this week I spoke to a group of snow and ice/turf equipment dealers as they practiced on a new sidewalk machine from Ariens designed to till, sweep, apply liquids and deposit dry de-icers. What was interesting was hearing how they are combating shortages of parts and supplies of basic items and the fact that production of this new machine was delayed for several months because they were waiting for components that were stuck in a port, on a truck, etc.
I mention these anecdotes only to emphasize that no matter what you do for the job, these changing conditions affect you and the rest of the professional snow and ice management industry. The one thing that is almost universally hated is change. As Americans, we have allowed ourselves to become complacent with just-in-time inventory and cheap materials at the expense of American production. Today, manufacturers and suppliers are vulnerable and exposed as we struggle to supply ourselves in the congested shipping world.
So let’s talk about our main subject and our subject of interest: chemical de-icers!
Salt supplies across the country are in very good condition at the start of the season. The dust is settling since the Morton acquisition and there is some reshuffling of “players” in the North East. Overall, I believe bulk road salt will be fine this winter. Clearly, unforeseen end-of-season weather conditions can disrupt even the best supply chain plans. Therefore, we will have to wait and see what Mother Nature delivers. To date, I do not anticipate any supply issues or disruptions to bulk salt.
Calcium chloride (dry)
This is the #1 pinch point in the supply chain. Calcium chloride dry products have seen two price increases in the last six months. We have only one domestic producer of calcium chloride, and with the fall in oil production in 2020 and early 2021, the demand for calcium chloride in this market has eased off a bit. It ended with the combination of the suspension of the Keystone XL pipeline project, more vehicles on the move in 2021, and a resurgence in oil development in North America. Calcium chloride is a “completion fluid” for oil drilling and harvesting. In 2020, the demand for calcium chloride was low.
Imported calcium chloride represents a significant portion of the US supply. These imports have dwindled to a trickle, forcing markets to turn to domestic production.
Adding to the pressure is the snow and ice market, which has turned to domestic production to replace shortages of materials that do not arrive from foreign sources. So you can see where it’s leading.
This pre-season we have seen record sales of calcium chloride for the winter, and it does not stop. It is not a bottomless supply pit. Therefore, we expect to see allocations from domestic production as they try to keep their markets supplied without allowing runaway sales to deplete overall inventory. When I wrote this, there were no restrictions on our sales of calcium chloride dry products, but I feel it is coming and soon.
Magnesium chloride (dry)
As in the case of calcium chloride, there is a producer of dry magnesium chloride in the United States. Additionally, there have been three price increases in the past six months.
Magnesium chloride imports have been robust during the pandemic and into early 2021, but with skyrocketing container prices, those supplies have been snuffed out, leaving only what’s on the ground. We expect imported magnesium chloride to continue to reach Gulf Coast and Atlantic Coast markets, but in significantly lower volumes due to these extremely out of control container shipping costs. We also anticipate this to be a virtual race to the “walls” of (empty) warehouses for Magnesium Chloride and which will also likely fall into allocations and tight supply.
If you don’t have these products under your roof and under your control, it may be too late. However, only time will tell.
Liquid calcium chloride and magnesium chloride
In every dark cloud, there is always a bright spot, and premium liquid fondants are that bright spot. Inventories are very high, and we don’t expect to see any issues with these two liquid compounds for snow and ice control…at least not currently.
to sum up
Overall, the markets are very strong when it comes to pre-season buying and preparation. The salt supply is important and we do not foresee any salt supply problems at this time. We expect to see continued issues with unexpected items resulting from this global container debacle and congestion.
Also, we don’t see container congestion easing for at least 24 months and possibly a bit longer. It’s a big traffic jam and it’s happening all over the planet. I’ve written about this extensively over the past year, so it shouldn’t be too big of a surprise.
Like looking into any crystal ball, I might read the tea leaves incorrectly, but that’s my view for now.
Snow Magazine editor Robert S. English is president of Chemical Solutions, Inc., Franklin, MA. You can reach him at firstname.lastname@example.org.