Desalination Costs Ease, but the Water Premium Refuses to Fall

LONDON — The desalination-cost spike that jolted water-scarce megacities in late October has eased on the Cerulean Exchange, but traders warn the relief is partial and the new floor is higher than the old one. Spot desalinated-water contracts have retreated from their late-October peak yet still sit well above summer levels, a stickiness the exchange attributes to energy pricing and the corridors now carrying water further inland than ever. "Prices came off the boil. They did not go home," said Cerulean analyst Devraj Malhotra, who tracks the water desk. Castellan Capital, which underwrites several desalination megaprojects, said financing costs for new plants remain elevated for a fourth straight month. For a Chennai household buying municipal water, the exchange's cooling is abstract; the bill, up roughly a fifth since spring, is not. Markets steadied. The cost of a glass of water did not fall back.