Updated to mid-November 2009
Asian market review by Hunwei Ng, ICIS pricing
Asian ethylene dichloride (EDC) prices plummeted 30% to $320-350/tonne CFR (cost and freight) NE Asia (northeast Asia) from mid-August to end-October, then rebounded 15% to $370-400/tonne CFR NE Asia in mid-November.
Ample supplies and rising domestic production led to the decline in EDC import prices. Surging ethylene values led to the subsequent price rebound. Demand remained subdued however, some traders noted.
European market review by Stephanie Wilson, ICIS pricing
Waning demand and import pressure in the downstream polyvinyl chloride (PVC) market during the second half of 2009 dragged European EDC prices from year highs of $500-510/tonne FOB (free on board) WE (Western Europe) to $340-360/tonne FOB WE by mid-November.
EDC prices were mainly governed by volatile availability in the PVC market over the period mid-September to mid-November, with only a fleeting improvement in demand noted.
Several large force majeures on downstream vinyl chloride monomer (VCM) production led to increased availability of EDC, while high upstream ethylene costs thwarted any opportunity to export surplus material.
However, high feedstock costs and low chlor-alkali operating rates, (which continued to be driven by tumbling caustic soda values, the co-product of chlorine), did put a floor under EDC prices, holding them above November 2008 levels.
US market review by Leela Landress, ICIS pricing
The EDC spot market dropped by 29% in the US to trade at $315-330/tonne FOB USG (US Gulf) during the three months to mid-November, due to looser feedstock chlorine supply and sluggish downstream US PVC demand.
Chlor-alkali production rates in the US Gulf increased as chlorine co-product caustic soda spot values rose steadily since August. Higher caustic soda values prompted chlor-alkali producers to increase production rates and in turn produce more feedstock chlorine.
Amid uncertain price direction in the downstream PVC market and lacklustre demand, sources expected spot EDC out of the US Gulf to likely hover in the mid-$300s/tonne range through the rest of 2009.
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Ethylene dichloride
Uses and Outlook
With about 95% of ethylene dichloride (EDC) being used in the manufacture of vinyl chloride monomer (VCM), nearly all of which goes into polyvinyl chloride (PVC), EDC supply/demand balances are influenced by the PVC market. In addition, many EDC plants are integrated with VCM production.
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Ethylene dichloride
Process Technologies
EDC is made by the chlorination of ethylene via one of two processes: direct chlorination using pure chlorine and ethylene; or oxychlorination in which ethylene reacts with chlorine in hydrogen chloride. Many EDC/VCM plants employ a combination of chlorination and oxychlorination to consume the hydrogen chloride by-product from the cracking of EDC to VCM.
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