Updated to mid-November 2009
Asian market review by Hunwei Ng, ICIS pricing
Asian vinyl chloride monomer (VCM) prices shed 3% to $670-700/tonne CFR (cost and freight) NE Asia (northeast Asia) during the quarter ending mid-November.
VCM demand was sluggish during this period, due to the seasonal downturn in the downstream polyvinyl chloride (PVC) sector. High feedstock ethylene costs and VCM plant maintenance shutdowns however helped to negate some of this downward pressure.
European market review by Stephanie Wilson, ICIS pricing
European VCM spot and contract prices tumbled by $80-140/tonne and €50/tonne respectively, in the period mid-September to mid-November, as sentiment in the downstream PVC market weakened.
VCM spot prices slipped from highs of $670-750/tonne FOB (free on board) NWE (northwest Europe) to $590-610/tonne FOB NWE by mid-November, mirroring volatile availability in the PVC market.
VCM demand was muted, but several large force majeures across production kept availability low, while sporadic but strong buying interest from one or two distressed PVC producers keen to capitalise on tight availability and rising PVC prices, caused a spike in VCM spot values.
However, as production issues were resolved and aggressively priced PVC imports from the US began to penetrate the European market, the thin VCM demand evaporated almost entirely, causing spot values to fall off.
Looking ahead, while some sources felt that high feedstock costs and low chlor-alkali operating rates, which continued to be driven by tumbling caustic soda values, the co-product of upstream chlorine, put a floor under VCM prices, most felt that values would continue to erode in the run up to the year-end.
US market review by Leela Landress, ICIS pricing
The VCM spot market decreased in the US by 8% to trade at $570-600/tonne FOB USG (US Gulf) during the three months to mid-November, due to looser feedstock chlorine supply and sluggish downstream 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 VCM out of the US Gulf likely to hover from the high-$500s/tonne to the low $600s/tonne range through the rest of 2009.
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Vinyl chloride
Uses and Outlook
Vinyl chloride monomer (VCM) is used almost exclusively in polyvinyl chloride (PVC) manufacture. The remainder is consumed in polyvinylidene chloride and chlorinated solvents. With over 98% of VCM used in PVC, VCM demand is very dependent on the fortunes of the PVC market.
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Vinyl chloride
Process Technologies
Commercial production of VCM started in the 1920s based on the catalytic hydrochlorination of acetylene but this route suffered from high energy costs and has become obsolete except for China.
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