The cost of doing business in the water and wastewater industry is going up. Beginning last year and building into 2007, discussion in the water and wastewater industry has centered on the price of activated carbon, both imported and domestically produced.
Due to global market changes, the increased demand for activated carbon in developing countries such as China and more stringent environmental regulations being implemented in existing markets like the U.S. and Europe, the carbon price increase is expected to severely impact the entire industry.
In response to complaints by two major activated carbon producers, Calgon Carbon Corp. and Norit Americas, Inc., in October 2006, the Department of Commerce issued a preliminary tariff notice imposing antidumping duties on activated carbon imported from China. As expected, this past February it was announced that the final tariff for carbon imported from China could increase from 62% to 228% from the current market price.
The final tariff could potentially be collected up to five years, essentially comprising the difference between a fair price for the product and the price, U.S. companies argue, for which China is selling the product.
As a result, the U.S. government imposed sanctions against the Chinese manufacturers of carbon in late February.
The government’s decision was applauded by a select few in the industry, while others anticipated that the market would eventually reflect the fair price for carbon due to supply and demand for the product.
Unfortunately, the enthusiasm for the government’s decision was short-lived. Shortly before press time, the Department of Commerce announced its final tariff for carbon imported from China. With the exception of a select few instances, the going rate for carbon increased 228.11%.
Most of you will feel the impact of the increased price of carbon when ordering the carbon supplies you incorporate into your municipal treatment plant within the next few months.
As a result, municipalities may be expected to face a large budgetary adjustment. It is feasible that municipalities may have to borrow resources from one area of their budget in order to accommodate the carbon price increase.
Of course, you will be expected to defray the increased cost of carbon in some manner. If and when you are forced to increase water rates dramatically, your customers will bear the brunt of the price increase.
Despite the bleak outlook, there are possible solutions cropping up already.
According to Doug Gillen, director of environmental products for Siemens Water Technologies Corp., “One possible solution may be the implementation of reactivated carbon. As part of this solution, water purveyors are now reevaluating the use of reactivated carbons in their treatment systems in order to produce high-quality potable water that is free of organic contaminants while still meeting their budgets.”
The issues surrounding the recent carbon price increases are likely to gather even more steam in coming months. While most everyone in the industry would agree that the short-term effect is not good, the long-term effect is very difficult to assess at this point.
As such, be sure to monitor our website (WWDmag.com) as we will continue to update the issues and solutions surrounding this story.
