Europe may not fully convert mercury-based chlor-alkali capacity

24 June 2011 07:46  [Source: ICIS news]

SINGAPORE (ICIS)--Europe is not expected to fully convert to membrane-cell method for its chlor-alkali capacity by 2020 given the high costs involved in the process, an executive at French-based producer Arkema said on Friday.

Clarifying comments made in a speech at the 15th world chlor-alkali conference in Singapore, Pascal Maureta, business manager for caustic soda, said on the sidelines of the conference that “we don’t have a crystal ball. These predictions are not firm and only made based on today’s data, and for a worst-case possible scenario.”

European chlor-alkali producers said that the costly conversion to membrane-cell technology came could not have come at a worse time.

European regulations require all plants to switch to the more energy efficient membrane-cell method of production by 2020.

Margins for downstream polyvinyl chloride (PVC), which account for the majority of European chlorine use, have remained in negative territory since 2008, they said.

Demand for suspension PVC (SPVC) in 2008 slumped by 25% from record 2007 levels, in line with the global economic downturn. Soaring feedstock prices also squeezed margins, they said.

Little has changed in recent years, with offtakes remaining 10–15% below 2007 levels, as the key construction industry, remains shaky, the producers said. The sector accounts for more than 70% of SPVC offtake.

The eurozone recorded a 4.9% year-on-year decline in construction output in March 2011, with Slovenia, Portugal and Bulgaria registering the largest reduction, official data showed.

Additional reporting by Stephanie Wilson

($1 = €0.70)

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By: Mark Victory
+44 208 652 3214

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