Product profile: VCM


A lack of investment in additional VCM capacity to feed new PVC production is tightening global markets, and utilisation rates and prices are set to climb over the next four years


Vinyl chloride monomer (VCM) is used almost exclusively (about 99%) in polyvinyl chloride (PVC). The rest is consumed in vinylidene chloride and chlorinated solvents.


Availability of VCM has been tight this year, particularly in the first half, as the market suffered from a series of unscheduled outages as well as reduced output because of ethylene and chlorine feedstock constraints. Exports have been limited with only small business done into Turkey. Some small import volumes have moved into Europe from the US and Middle East, but supply in both these regions has also been tight.

Most production problems are resolved and feedstock availability has improved in quarter three, but players say supply remains tight and stocks are low. Demand from PVC is said to be healthy. Vintron's new 330000 tonne/year unit at Knapsack, Germany, started up in quarter two, replacing an older 105000 tonne/year plant.



European contract prices have risen continuously this year on the back of supply constraints. Numbers between E380-400/tonne FD NWE at the beginning of the year have climbed to a range of E590-600/tonne FD NWE in September. Export volumes have been limited with prices of about $490/tonne fob realised for business in Turkey.


Most commercial production is based on ethylene, which has largely replaced the original acetylene route. Ethylene is reacted with chlorine to make ethylene dichloride (EDC). The EDC is then converted to VCM by thermal cracking, and the hydrogen chloride by-product can be recycled to an oxychlorination plant to make more EDC.

Several attempts have been made to develop ethane-based processes with only EVC having some success so far. EVC is testing its new catalytic process to produce VCM directly from ethane in a pilot plant in Wilhelmshaven, Germany, and, once technical issues are resolved, a commercial scale plant could be onstream in 2004. EVC claims a 20-30% reduction in production costs across the PVC chain while the process decouples VCM/PVC production from the ethylene cracker.

Health and safety

VCM is a colourless gas with a mild, sweet odour. It is soluble in most organic liquids and partially soluble in water. It is highly flammable and will form explosive mixtures with air. It can irritate the eyes and skin and is harmful if inhaled or absorbed. Prolonged exposure depresses the central nervous system and affects the lungs, liver and kidneys. It is a confirmed human carcinogen.


European demand growth is at GDP rates and at about 4%/year on a global basis. A shortage of VCM (and chlorine) is a key issue for the industry as less VCM expansions have been announced than PVC additions. Additional VCM capacity of 1.9m tonne/ year in 2001-06 is much less than the 4.3m tonne/year of PVC announced in the same period, CMAI has noted. As a result, VCM operating rates will continue to accelerate, and prices will escalate quickly with the possibility that spot prices could exceed PVC prices.

Most new investment is planned in China, and two projects are being studied in Qatar and Iran. In Europe, Borsodchem is raising production to 320000 tonne/year in 2004. Petkim's expansion to 152 000 tonne/year is under way and due online in 2003.

Sources say more consolidation is needed in Europe, which still has far too many players. Several companies are looking to sell but with no takers. No firm deals are expected in the short term although talks are continuing among many players. It is thought more likely that first moves will come from second and third tier players.

European VCM capacity, '000 tonne/year
Company Location Capacity


Tarragona, Spain 185


Wloclawek, Poland 300


Lav'ra, France 460
St Auban, France 125


Kazincbarcika, Hungary 185


Schkopau, Germany 330


Oswiecim, Poland 25

Eko Chemicals

Thessaloniki, Greece 20


Porto Marghera, Italy 250
Porto Torres, Italy 90
Ravenna, Italy 100
Runcorn, UK 300
Wilhelmshaven, Germany 350


Krk, Croatia 160

JSC Kaustik

Sterlitamak, Russia 130


Kalush, Ukraine 370


Tessenderlo, Belgium 580

Norsk Hydro

Rafnes, Norway 460
Stenungsund, Sweden 130

Novacke Chemicke Zavody

Novaky, Slovakia 64


Rimnicu Vilcea, Romania 160


Aliaga, Turkey 142
Yarimca, Turkey 55


Fos, France 375


Botlek, Netherlands 520


Jemeppe, Belgium 260
Ludwigshafen, Germany 100
Rheinberg, Germany 255
Tavaux, France 260


Neratovice, Czech Rep 135


Marl, Germany 350


Martorell, Spain 270


Gendorf, Germany 300


Knapsack, Germany 330

ZA Tarnowie

Tarnow, Poland* 86

* Plant closed early 2002

SOURCE: ecn/cni