CEH Report

Table of Contents

Abstract

Vinyl chloride monomer (VCM) is used primarily for the production of polyvinyl chloride (PVC) homopolymer and copolymer resins. From 2004 to 2007, global consumption of VCM grew by about 5.5% per year as a result of strong demand for PVC, mainly for construction end uses. In 2008, the global business started strong but after October, deteriorated significantly as a result of the global economic crisis. In the United States, industry operating rates were about 50% in December 2008 and January 2009.

The following pie chart shows world consumption of vinyl chloride monomer:

Consumption of VCM will remain dependent upon the performance of the PVC business, which is expected to increase globally at an average annual rate of 5.4% from 2008 to 2013 as the world recovers from the economic crisis of 2008–2009. Growth rates in such developing regions as the Middle East and China will be considerably higher than in traditional developed economies like Western Europe, North America and Japan.

VCM is made principally by the pyrolysis of ethylene dichloride (EDC); the EDC is derived from ethylene, which is made by the cracking of natural gas or crude oil fractions. Most VCM units are integrated with EDC production. In China, most VCM is produced by the hydrochlorination of acetylene; the acetylene is produced from calcium carbide which in turn is derived from coal. This process became more attractive from 2003 to mid-2008 when crude oil prices rose significantly. However, in the latter part of 2008, crude oil prices fell by two-thirds, making the EDC route more attractive. By the end of 2008, China was importing EDC-derived VCM and PVC while many acetylene-based VCM producers were operating at very low rates.

Major VCM expansions are planned in the Middle East, Russia and China, but many plans will be delayed or cancelled as a result of the economic crisis. In China, expansion of acetylene-based technology has been curbed by the plunge in crude oil prices; the EDC route is also more environmentally friendly, produces higher-purity product, and consumes 50% less energy and less water. As a result, the Chinese may satisfy growing demand for PVC by importing more VCM and/or PVC, depending upon crude oil prices.