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 2020
Supply for VCM decreased in Q4 after operating rates at LG Chem’s cracker in Yeosu, South Korea unexpectedly shut down in November, resulting in lowered run rates at the company’s VCM unit in the same complex. Brief technical issues in December at several Asian producers further curtailed spot supply in the regional, leading to tight availability.
Demand for VCM improved in Q4, amid a resurgent downstream polyvinyl chloride (PVC) market which was further constrained by tight global supply. Downstream PVC consumption improved in many Asian countries, due to a recovery in construction and manufacturing activities as the coronavirus situation improved. Positive coronavirus vaccine news in late 2020 further bolstered market confidence.
Supply was low in Q4 on the back of production issues. INOVYN’s plant in Norway was on force majeure between September and December. Spolana’s plant in the Czech Republic was shut down through most of October.
Demand was broadly stable in Q4, as December saw a smaller-than-usual decrease in downstream demand. Demand in the downstream PVC market also recovered compared to earlier in the year, although it remained below par compared to 2019 levels. In addition, high prices for export PVC boosted demand for VCM output at some plants and supported chlor-alkali operating rates.
Supply grew as Westlake Chemical returned its 980,000 tonne/year plant in Lake Charles, Louisiana, to near full production. The plant was shut in August after Hurricane Laura flooded the region. The outage took months to return to fuller production as tight supply for the derivative PVC drove prices higher for the polymer. While growing, other planned and unplanned outages constrained overall supply.
Global and domestic demand grew alongside demand for derivative PVC. Stronger-than-expected construction activity kept PVC demand high well into what is usually a seasonal winter lull. It kept PVC prices firm and US VCM producers favoured internal use of VCM to manufacture PVC and capitalise on the stronger margins of the polymer, rather than to sell into spot markets.
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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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