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
The near-term VCM market outlook is mixed across the regions, with the European market expecting limited spot trading activity during the first quarter due to the integrated nature of the chlor-alkali chain and low seasonal demand from the downstream polyvinyl chloride (PVC) sector during the winter.
In Asia, sellers are insisting on firm offers for VCM spot cargoes in the first quarter, citing snug spot availability and firm feedstock ethylene prices as their main reasons. Furthermore, the gaseous nature of VCM makes it too expensive to import from deep-sea origins. As a result, demand for VCM spot cargoes is expected to hold steady, as standalone PVC units would depend on imported VCM for downstream production purposes.
US domestic demand is expected to be healthy in Q1 with the seasonal uptick traditionally seen at that time. Additionally, the upbeat pace of home construction seen during the fourth quarter is lending support to possibly higher pricing going into 2014 and supporting downstream PVC producers’ price increase nominations on the table for January and February.
Updated to mid-Jan 2014
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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.