About 95% of ethylene dichloride (EDC) is used to make vinyl chloride monomer (VCM), most of which goes into polyvinyl chloride (PVC) production. Many EDC plants are integrated with VCM production.
The remaining EDC goes into the manufacture of chlorinated solvents.
There has been no improvement in demand for EDC in Europe this year, say players. The sector is very heavily dependent on the fortunes of PVC, which has been badly hit by the slump in the construction and automotive sectors, and consumption remains weak.
Supply has lengthened and is now higher than demand. This contrasts with a tight market in the second quater (Q2) and Q3, when chlor-alkali, and hence EDC, production was cut back severely because of plummeting caustic soda values. Caustic has since recovered, prompting more supply of chlor-alkali and EDC.
Several production problems persist in Europe up and down the chain. French producer Arkema had to prolong its force majeure last week on PVC because of VCM production problems at Lavera, France. US producer Dow Chemical declared force majeure in early October on caustic soda after technical issues at Schkopau, Germany, at the same time as the UK's INEOS ChlorVinyls lifted its PVC force majeure in Norway after a 10-week outage.
Spain's Ercros has closed its plant in Huelva, Spain, this year as part of a restructuring program across Europe.
European prices have recovered from the historic lows seen in early 2009. Spot prices in early October were $430-440/tonne, although levels were dropping below $400/tonne mid-month because of weaker ethylene prices, as well as falling downstream VCM and PVC spot numbers.
EDC is made by the chlorination of ethylene in one of two processes: direct chlorination using pure chlorine and ethylene, or oxychlorination, where ethylene reacts with chlorine in hydrogen chloride. Many EDC/VCM plants use a combination of these processes to consume the hydrogen chloride by-product from cracking EDC to VCM. A high-temperature direct chlorination process has been developed by VinTec, owned by German producer Vinnolit, and commericalized in 2006 at Belgian producer LVM.
Sources expect the market to fall further in Q4, with no improvement predicted until mid-2010. Europe has more than enough capacity to meet its present and future needs, with any extra only likely from small debottleneckings. New investment is focused on the Middle East and Asia.
More consolidation is forecast, particularly in eastern Europe, where quality and infrastructure problems hamper business. Confusion persists over EDC operations in Italy and it is doubtful that some plants will restart as a result of financial and political wrangling.
The European PVC sector remains oversupplied and rationalization is still required.
WEST EUROPEAN EDC CAPACITY '000 TONNES/YEAR
|Dow Chemical||Schkopau, Germany||255|
|Eko Chemicals||Thessaloniki, Greece||45|
|Evonik Industries||Lulsdorf, Germany||150|
|INEOS ChlorVinyls||Rafnes, Norway||735|
|Safi||Porto Torres, Italy||160|
|Societe du Chlorure de Vinyle de Fos||Fos, France||610|
|Vinyls Italia||Porto Marghera, Italy||400|
|SOURCE: ICIS PLANTS & PROJECTS|
Profile last published November 10, 2003
For the latest market prices and reports on more than 120 commodity chemicals from the leading independent pricing and market intelligence service, please visit ICIS pricing
Get an entire year's worth of chemical
The chemical profiles published in ICIS Chemical Business during 2008 are available on USB stick. For more details or to order, email: Sarah Creswell