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.
Updated to Q4 2019
Northeast Asian spot supply for vinyl chloride monomer (VCM) remained tight due to production disruptions in the third quarter. A South Korean producer had to manage its inventories ahead of a 150,000 tonne/year downstream expansion in January 2020, leading to tighter-than-usual spot export availability. Its 170,000 tonne/year VCM capacity expansion will only come on line in February 2020. Strict environmental controls in China also led to tighter domestic supply of VCM in the country.
Limited supply in China’s domestic vinyl chloride monomer (VCM) market saw buyers in the country turn to the spot import market. Market players’ views subsequently remained bullish despite a slow downstream polyvinyl chloride (PVC) market for much of the quarter. PVC market sentiments saw an uplift in late December, when trade tensions between the US and China began to ease.
European vinyl chloride monomer (VCM) supply was stable or lower in the fourth quarter of 2019. There were some technical issues at the Stade, Germany plant which reduced production of VCM in December, with lower demand for some downstream products of the chloralkali and chlorvinyl industries also reducing capacity utilisation for feedstock chlorine. Merchant demand for VCM is very low in Europe and the market did not become significantly tighter.
European vinyl chloride monomer (VCM) demand was somewhat lower in the fourth quarter of 2019 because of seasonal and end of year trends. Demand typically falls towards the end of the year because of buyers and producers reducing their stock positions. In addition, the downstream construction industry sees lower activity because of colder weather in Europe. Structurally speaking, VCM spot demand is weak because most capacity is integrated into downstream production systems.
US supply of vinyl chloride monomer (VCM) is usually controlled by internal demand by integrated producers of polyvinyl chloride (PVC). But a planned PVC production expansion was delayed in September, freeing some VCM for spot markets early in the fourth quarter. Additionally, a US producer and exporter of VCM was heard to have production problems in December that scaled back output and reduced export volumes.
Demand for VCM is dictated by production of derivative PVC. The fourth quarter is typically the decline from the peak demand period during the summer months and the third quarter. Demand for US VCM, both domestically and for exports, softened during the fourth quarter in the usual seasonal demand decline.
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VCM production takes place in an integrated balanced process, comprising three units, direct chlorination, oxychlorination and ethylene dichloride (EDC) cracking.
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.
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