Asia
Asian ethylene dichloride (EDC) spot prices weakened from mid-February to mid-May, tracking declines in the upstream ethylene and downstream polyvinyl chloride (PVC) markets.
EDC prices in Asia softened steadily from $410/tonne CFR (cost & freight) northeast (NE) Asia on 8 March to $360/tonne CFR NE Asia on 26 April.
Spot cargo availability was limited, as plant operating rates were lowered in consideration of squeezed margins. However, buyers adopted a wait-and-see stance in anticipation of lower prices in the near term and that caused trading activity to remain subdued.
Nonetheless, sellers are optimistic and said that tight spot supply and stabilising upstream prices in Asia are likely to prevent a further decline in EDC prices.
Updated to mid-May 2013
Europe
Poor offtake from the construction and automotive industries resulted in declining demand for ethylene dichloride (EDC) for most of 2012, and weakness in the market has continued in 2013.
EDC is consumed by the downstream vinyl chloride monomer (VCM) market, whose consumption is influenced by polyvinyl chloride (PVC) demand.
As PVC demand is largely dependent on construction and automotives, falling output in these two sectors has led to weak EDC, VCM and PVC sales.
Activity in the EDC market picked up slightly in late February. Prices rose to $310-325/tonne FOB (free on board) Western Europe.
The market then remained steady until the end of March, when prices fell to $300/tonne at the low end of the range.
No major seasonal pick-up in demand has been seen, as the PVC market remains weak, and the EDC market remains slow.
Falls in the feedstock ethylene monthly contract price in April and May put more downward pressure on EDC prices, which reached $280-295/tonne by mid-May.
Updated to mid-May 2013
US
After remaining flat for weeks, spot prices for US ethylene dichloride (EDC) began to move up in late November on the back of rising costs for feedstock ethylene and surprisingly strong demand for polyvinyl chloride (PVC), the principal end-product for EDC.
Ethylene pricing was driven by both increased demand and snug supplies caused by end-of-year outages, both planned and unplanned. Meanwhile, demand for PVC picked up as the long-awaited recovery in the US homebuilding sector seemed to be gaining steam. Homebuilding and other construction activity makes up most of the demand for PVC.
EDC prices remained stable through December, as the market was inactive leading into the year-end holiday season. But ethylene prices climbed on the various outages. That, combined with increased demand for end-product PVC, put upward pressure on EDC pricing in January and early February.
Updated to mid-February 2013