China's coal output to change global PVC dynamics

10 November 2006 13:36  [Source: ICIS news]

RIO DE JANEIRO (ICIS news)--China’s growing investments in coal as a chemical feedstock will likely revolutionize the dynamics of the global polyvinyl chloride (PVC) market, Nexant ChemSystems said on Friday.

The low cost of Chinese coal is expected to support the country’s competitiveness in coal-based vinyl chloride monomer (VCM) production, Nexant’s vice president, chemicals, Andrew Swanson told attendees at a petrochemicals conference in Rio de Janeiro.

At least six coal-derived VCM plants were operating in China, said the analyst, adding that another eight projects for chemical plants using coal as a feedstock were being planned.

According to Swanson, the use of coal as an alternative feedstock is supported by the Chinese government, which is seeking to reduce the nation’s dependency on foreign oil.

China’s crude oil imports currently exceed 100m tonnes/year, said the executive.

With lower production costs, China will likely be the dominant player in the PVC market, said Swanson. With the high shipping costs of VCM, the Middle East will only retain a modest advantage over the coal-based option, he noted.

By: William Lemos
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