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Ethylene dichloride prices, markets & analysis

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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.

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Market Overview

Updated to Q2 2021

Asia

Deep-sea availability of EDC from the US to Asia remained tight for Q2. Major US producers’ export allocations were limited amid an accumulated backlog from disrupted production in Q1. There was also greater incentive for US integrated producers to consume EDC into the production of polyvinyl chloride (PVC) due to improved housing demand. Apart from a major northeast Asian producer’s monthly sales tenders of EDC, spot availability from Asian producers was otherwise limited.

Demand for EDC in Asia was relatively stable in early Q2 but started to fall in late Q2 as sluggish demand of main derivative PVC affected sentiment for EDC. Slowing PVC demand was due to lingering coronavirus-related concerns in the major import market of India, as well as the impending monsoon season in early Q3. Several southeast Asian countries also saw suppressed PVC demand due to a surge in coronavirus cases.

Europe

EDC availability was tight in Q2 following production issues combined with global limitations. One major European producer had supply issues during Q2, according to sources. US prices were also high due to tight global availability, which limited imports and led to offers rejected by European buyers.

EDC demand remained relatively stable in Q2. Spot demand was structurally very low, with most capacity integrated into downstream PVC production systems. PVC demand was strong on the back of a resurgent construction market combined with high global prices, but there were few new deals in Q2 because of the heavy integration of the market and differing ideas between buyers and sellers.

US

Supply of EDC showed some recovery after the production outages of Q1 severely limited supply during February and March. Q1 production of EDC was the lowest month of the past five years. Q2 started off with very low production and restoration of production was incremental throughout the quarter. Still, it remained constrained below usual historic volumes, although it showed growth compared with Q1.

Demand for EDC remained high through the quarter, with values of downstream derivative PVC reaching record levels during Q2 on constrained supply and ongoing robust demand in North America. EDC values also reached record levels on the constrained supply. Strong construction activity on low interest rates for borrowing and lifestyle changes brought by the pandemic kept demand strong through the quarter. Most EDC is consumed in the manufacture of PVC.

REGIONAL OUTLOOK

Updated to Q2 2021

Asia

Global supply conditions are expected to improve in Q3, with US producers expected to increase their export allocations once they have caught up on backorders. Market participants are optimistic that a portion of such allocations may make their way to Asia as spot material in Q3. In Asia, operating rates are expected to remain steady for much of Q3, as integrated chlor-alkali margins for both downstream PVC and caustic soda remain generally favourable.

Demand for EDC in Asia is mostly dependent on the performance of main derivative PVC. The PVC outlook is for Q3 is mixed. PVC demand from the major import market of India is largely expected to remain dampened due to the monsoon season, but may improve towards late Q3 if vaccination rollouts and other measures are effective. Sentiment in Asian countries may remain cautious due to lingering concerns from coronavirus infections.

Europe

EDC supply is expected to be stable or higher in Q3. Global demand for downstream PVC has fallen as a result of resurgent coronavirus cases in India, which is likely to reduce demand for EDC and which might allow for higher supply via imports. The timing of production issues in Europe to be resolved is unclear but supply is expected to improve through August.

EDC demand may decrease in Q3. Business activity typically falls in August due to the summer holidays, with the European tourism industry expected to rebound. However, underlying construction demand is expected to remain strong in the second half of the year. Spot demand is expected to remain a very small proportion of EDC consumption, with the majority of capacity integrated into downstream PVC production systems.

US

Ongoing efforts to restore production continued through Q2 and were still in the works as Q3 got underway. The production issues that stem from the February freeze were keenest at chlor-alkali production plants. That has continued to impact EDC production and kept supply tight and spot business at reduced levels throughout Q2 and going into Q3. Production is expected to see significant recovery in August.

Demand for EDC is expected to remain strong on robust demand for derivative PVC in both the North American and international markets. Constrained EDC production has limited production of PVC even as domestic demand has outstripped historical levels and limited PVC exports to just above half of their usual levels. Low interest rates on borrowing and lifestyle changes have brought a resulting boom in construction that is driving PVC and EDC demand.

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We offer the following regional Ethylene dichloride analysis and news coverage to keep you informed of factors and developments affecting prices in the Ethylene dichloride marketplace.

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    Price Reporting – More information about the price reports we publish on Ethylene dichloride

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Working closely with you to understand your strategies, challenges and ambitions, the ICIS consulting team deliver tailored advice and solutions to suit your unique requirements. With many years’ experience of guiding business leadership teams, we show you how market conditions can make a positive or negative impact on your long-term plans.

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ICIS expert consultants can provide your organisation with the insight, intelligence and data needed to build and grow your business in China. We can help you to gain a clear view on the short and long-term supply and demand picture in the chemicals, energy, iron and steel, non-ferrous metals and paper and pulp markets in China.

Methodology

ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.

Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.

Over 25 years of reporting on key chemicals markets, including Ethylene dichloride, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.

Ethylene Dichloride EDC Methodology
The main end use for EDC is in the production of vinyl chloride monomer and this accounts for over 95% of consumption.

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About Ethylene dichloride

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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