Vinyl chloride monomer Prices, markets & analysis
If you buy or sell Vinyl chloride monomer or related products, you need up-to-date global pricing data and the background information to help you understand it.
Our network of price reporters across Asia, Europe and the US enables us to deliver this. We publish their insights in our comprehensive daily and weekly price reports, plus we offer the news and analysis you need to put pricing information into context.
Vinyl Chloride Monomer Overview Transcript
Vinyl chloride monomer, also known as VCM, is an intermediate in polyvinyl chloride (PVC) production and is largely integrated, with only a small merchant market outside of contract agreements.
About 99% of VCM is used in the production of downstream PVC, which is the main driver of VCM prices.
Other drivers include movements in ethylene and chlorine costs as well as events in the wider chlor alkali chain, as producers need to balance the electro chemical unit in order to make the business profitable.
The economy is also a key driver for VCM consumption, as the PVC market is strongly linked with construction activity and GDP.
In the global VCM market, trading activity has depended on the outcome of PVC negotiations, which have been largely unsuccessful for producers, as poor conditions in the construction market continue to cap potential increases and producers’ efforts to pass higher ethylene costs.
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Vinyl chloride monomer: Market overview
Updated to Q1 2015
Vinyl chloride monomer (VCM) spot pricing in global markets is expected to continue to track upstream ethylene and downstream polyvinyl chloride (PVC) markets. In Asia, VCM players expect prices to follow downstream PVC price developments closely. In the US and Europe, VCM pricing is likely to track both upstream and downstream developments and could soften further, if the slides in upstream and downstream costs were to continue.
In the US, there is talk of possibly more VCM spot material on offer for export during the first quarter, as sellers expect to slightly improve their margins in global markets by benefiting from the lower upstream ethylene costs to some extent.
In Europe, VCM activity is very rare due to the integrated nature of most systems and the fact that VCM is mainly captively used. Even though there has been a spate of upstream chloralkali and ethylene output constraints for certain players, along with a few EDC/VCM plant issues during the fourth quarter of 2014 and in early 2015, there has been no evidence of any merchant VCM business. This is because of low seasonality downstream, high freight costs and logistical difficulties in transporting product, particularly to certain locations.
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Vinyl Chloride Monomer Methodology
About Vinyl chloride monomer
Vinyl chloride monomer (VCM) is a colourless gas with a characteristic mild, sweet odour. A toxic and hazardous material, vinyl chloride has been classified as a group A, human carcinogen.
VCM is used almost exclusively in polyvinyl chloride (PVC) manufacture. PVC itself is highly dependent on the construction market, which reflects the ups and downs of the world economies.
With the exception of China, nearly all production is now based on ethylene, which is first reacted with chlorine to make ethylene dichloride (EDC). The EDC is then converted to VCM by thermal cracking. In China, the dominant process to make VCM is based on acetylene produced from calcium carbide which is manufactured from coal and limestone.