The ICIS global vinyl chloride monomer (VCM) report is published weekly and covers Asia, Europe and the US. All three regions have price assessments for the spot markets within the report and there is valuable news and analysis within the commentary.
This market intelligence incluces overviews, production news, downstream and upstream movements, economic news, trade statistics and the ICIS Petrochemical Index (IPEX) trends. Whether you are a buyer or seller, this comprehensive business tool will help you to make informed choices.
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 2017
US vinyl chloride monomer (VCM) is expected to continue to climb along with derivative polyvinyl chloride (PVC) prices during the quarter. Very little VCM is traded in spot markets with most production used internally by integrated producers of PVC. US producers found new demand from Mexico in 2016 after an explosion at a plant, which is expected to consume most excess US supply.
The European market is expected to be stable-to-firm in the first quarter of 2017 due to the strong upstream ethylene and downstream PVC markets. However, spot sales are expected to remain quite limited for structural reasons, with the majority of production integrated into larger PVC systems. No capacity changes are expected in Q1 of 2017.
Prices in the Asia market are expected to continue to closely track PVC prices, which were expected to firm for the rest of the first quarter due to rebounding demand. Spot demand in the key market of China is expected to recover after the Lunar New Year holiday.
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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.