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 Q1 2020
Supply tightened in January, with production issues at Dow’s Stade plant in Germany. This, combined with higher demand for downstream polyvinyl chloride (PVC) and increased global prices of EDC, contributed to price increases in mid-March. However, supply stabilised and then the global market lengthened steeply in late March as a result of the coronavirus pandemic causing lockdowns in a number of European countries.
Demand was higher in the first half of Q1 but fell in the second half, resulting in a stable situation overall. Demand was higher in January as buyers restocked following the December shutdown. Global demand was stable in February, with global prices rising, but subsequently fell in the second half of March as demand for downstream products such as PVC was greatly reduced.
US supply of ethylene dichloride (EDC) continued steady during the first quarter as seasonal demand for derivative US polyvinyl chloride (PVC) rose on an uptick of construction activity. Some unplanned production problems at two producers reduced spot availability of the feedstock.
Demand for US EDC grew during the first quarter as demand for derivative PVC rose and demand from a producer in Brazil in need of feedstock prompted export sales and pushed US output and sales higher. Demand began to tail off at the end of the quarter on coronavirus precautions that reduced construction activity and PVC demand.
EDC supply increased sharply in March as cargoes bound for India were diverted as a national lockdown on 25 March saw downstream PVC producers in the South Asian country postponing their contract volumes. Sellers subsequently sought outlets in other countries in Asia, but uptake was limited as sentiment for downstream polyvinyl chloride (PVC) remained weighed by concerns brought about by the coronavirus epidemic.
Demand in China was affected as the rapidly intensifying coronavirus situation within the country put a stop to domestic manufacturing activities. Downstream PVC inventories started to rise, and spot demand for EDC in China subsequently tapered off. In addition, regional buying behaviour also turned cautious as the coronavirus started to spread globally. Sentiments were also weighed by price volatility for feedstock crude amid the oil price war between Saudi Arabia and Russia, along with falling upstream ethylene prices.
Updated to Q2 2020
Supply is expected to fall in Q2 as a result of reduced demand for chlorine derivatives. The lockdown on European economies because of the coronavirus pandemic has seen a severe decrease in demand for chlorine derivatives such as PVC and isocyanates. As a result, chlorine production is expected to fall beginning in March or April which will result in lower production of EDC in Europe.
Demand is expected to fall in Q2, with a severe decrease anticipated in April. The coronavirus pandemic has reduced downstream demand in the construction, automotive and consumer markets, and a number of downstream PVC producers will run plants at lower rates or carry out extended shutdowns, leading to lower EDC requirements. Global demand for PVC will also be lower, leading to reduced export opportunities for EDC.
Overall supply of US EDC is expected to decline along with demand for derivative PVC. But spot availability of the precursor chemical could increase as US producers seek to maximise production of co-products chlorine and caustic soda to capitalise on expected rising values for the alkali.
Demand for EDC to manufacture PVC is expected to decline during the second quarter as coronavirus precautions slow business and construction activity. Chemical companies in the US and other countries are generally able to continue to operate, but their downstream demand sectors have been slowed to a crawl.
While some producers have adjusted their run rates, spot supply in Asia is still expected to increase. EDC producers in the US and the Middle East are major suppliers to India and are expected to continue facing inventory pressures until the lockdown in India is lifted in mid-April. More deep-sea availability is therefore expected in Asia.
As EDC is mainly the precursor chemical used in the manufacture of PVC, demand is expected to be subdued, tracking the PVC market. With the serious coronavirus situation in US and Europe, it is likely that demand will be capped for finished goods containing PVC, subsequently dampening spot interest for EDC.
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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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Like many others, if you are looking for ways to unveil answers to key industry questions then come and join us at the 24th World Chlor-alkali Conference organised by ICIS and Tecnon Orbichem. This 1.5 day event has been a home for key industry players in the value chain, having welcomed hundreds of delegates each year. Take a first look at the key offerings in 2020.