The weekly Ethylene dichloride report is a global report encompassing updates from Asia, Europe and the US.
Each region provides news and market intelligence on upstream developments, production, demand and any other influencing factors. All areas focus on spot prices with quotes published for NWE, USG and NE Asia. The data and commentary provides you with a reliable source of independent information essential for making business decisions within this area of the industry.
Updated to Q4 2020
Asia’s availability of deep-sea material remained constrained due to technical issues at major US producers, resulting in lessened production of EDC. In addition, a sustained uptrend in price for downstream PVC meant that most integrated producers kept as much EDC volumes as possible in internal PVC production, which gave the best netbacks.
Downstream PVC demand in Asia continued to improve in Q4, amid a recovery in construction and manufacturing activities. Positive news regarding coronavirus vaccinations in end 2020 also further bolstered market sentiment, resulting in improving demand for EDC in Asia.”
European EDC supply was lower in Q4, with sources seeing production issues in the domestic market, although the details could not be widely confirmed. In addition, global prices increased dramatically in November and December, particularly in the US and Asia, limiting the ability of market players to import significant volumes into Europe and adding to the associated costs.
European EDC demand was mostly stable in Q4, as the typical Christmas decrease in activity was smaller than usual and downstream markets have recovered compared with earlier in the year. Downstream PVC demand was boosted by strong export prices combined with the partial recovery of downstream industries such as construction compared with earlier in the year. Activity seasonally fell in December, but the dip was smaller than in most years.
Supply of EDC grew during Q4 as chlor-alkali production rates rose and planned and unplanned outages ended. But EDC production remained overall constrained by low chlorine production against weak demand for coproduct caustic soda. Additionally, Westlake Chemical suffered a significant plant outage in August after Hurricane Laura knocked the company’s PVC feedstock complex out of commission. The plant has since returned to operation but industrywide production of EDC remains constrained. .
EDC demand during Q4 held unexpectedly strong as the usual seasonal lull for PVC was overcome by continued strong construction activity globally. Export demand to Brazil continued as Braskem delayed the restart of its chlor-alkali facility in Alagoas state and continued to draw US EDC to manufacture PVC. Demand in Europe and Asia continued as well, with significant restoration of commercial and economic activity following coronavirus lockdowns earlier in the year.
Updated to Q4 2020
Spot availability is likely to remain limited as a South Korean producer will undergo turnarounds at its plants in Yeosu and Ulsan in Q4. A boom for downstream PVC means that integrated producers in the US are likely to hold more EDC volumes for resin production. The tighter supply conditions may be relieved by a Taiwanese producer’s sales tender for 10,000 tonnes per month, subject to market conditions.
Buyers, particularly from southeast Asia, are expected to continue restocking from a limited pool of suppliers, as construction and manufacturing activity improves for downstream PVC. Demand from China may be muted as some buyers restocked at more competitive prices earlier in the year.
European ethylene dichloride (EDC) supply is expected to remain mostly flat in Q4. Some shutdowns originally planned for earlier in the year may be rescheduled for Q4 as a result of an easier logistical situation, but further details were not available. Global availability has been tightened by higher demand in Q3, and it is likely that downstream demand will fall in Q4 in line with seasonal trends.
European EDC demand is expected to fall late in Q4 in line with typical seasonal trends. Demand typically falls in December because of the holiday season in Europe. In addition, European countries are showing higher numbers of coronavirus cases which could create the risk of local lockdowns in the future. However in the short term the global market is tight and high prices of downstream polyvinyl chloride (PVC) are likely to support consumptions of EDC.
Supply of US EDC should grow during the fourth quarter as Westlake Chemical is expected to restart its 670,000 tonne/year unit in Louisiana knocked out of commission by Hurricane Laura in late August. That restart is expected during October and will add appreciably to US supply and US PVC output for the fourth quarter. Supply should also return on Formosa Plastic’s return to production, though that situation is not clear.
Demand for US EDC is expected to remain stronger than is usual seasonally as pent-up demand from months of constrained supply is addressed. Market participants expect that low interest rates will continue to fuel home construction, refurbishment and sales and keep demand for derivative PVC elevated until winter weather restricts construction activity. Home improvement activity is also expected to continue to add a level to demand not often seen.
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Ethylene dichloride (EDC) is a clear, colourless, oily liquid with a sweet, pleasant chloroform-like odour. It is highly volatile, toxic, flammable and miscible with chlorinated hydrocarbons and most organic solvents. It reacts violently with aluminium, alkali metals, alkali amides, ammonia, bases, strong oxidants and attacks many metals in presence of water.
Around 95% of EDC is used in the production of vinyl chloride monomer (VCM), nearly all of which goes into polyvinyl chloride (PVC).
Other outlets for EDC are chlorinated solvents such as ethyleneamines, trichloroethylene, vinylidene chloride and trichloroethane. It is used as an intermediate in the production of perchloroethylene (tetrachloroethylene) and as a catalyst in hexachlorophene production.
EDC has been used as a solvent in the textile, metal cleaning and adhesives industries. Solvent markets tend to be mature due to environmental pressures to reduce emissions and declining in the case of perchloroethylene.
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