Published May 2017
Vinyl chloride monomer (VCM) is one of the world’s most important and largest commodity chemicals. VCM is used primarily for the production of polyvinyl chloride (PVC) homopolymer and copolymer resins. PVC has the advantage of being utilized in conversion and fabrication processes with great flexibility, such that end products cover a wide range, including pipe and fittings, profiles and tubes, siding, wire and cable, windows, doors, floorings, film and sheet, and bottles. While the most important ultimate end-use markets are commercial, residential, and nonresidential construction, a wide variety of PVC converted products are also utilized in agricultural, electrical (wire and cable), and health care markets. The vinyls chain, comprising ethylene dichloride (EDC), vinyl chloride monomer (VCM), and polyvinyl chloride (PVC), is a key component of the global petrochemical and thermoplastics sectors. The vinyls industry—and VCM, as part of the vinyls chain—has a history of change; manufacturers have exited and/or consolidated, and new firms have been created over the decades. Manufacturing technology has been improved from the standpoint of safety, the environment, quality, and scale of production.
The following pie chart shows world consumption of vinyl chloride monomer:
In 2016, Northeast Asia was the largest consumer of VCM, accounting for over half of the world’s VCM demand. China is the largest overall player in the VCM market, with 43% of the total global capacity and about 38% of total global production 2016. China also leads the world in VCM consumption, accounting for 40% of global demand in 2016; demand will continue to grow by 3.7% annually through the forecast period to 2021.
The second-largest consumer was North America, representing 19% of global demand, with the United States being the main driver in the region. The United States is the second-largest overall player worldwide, and maintains a low production cost position in chlorine and ethylene raw materials. The movement toward lower natural gas and feedstock costs for the vinyls chain in the United States and Canada, via shale gas, is solidifying the North American position as one of the world’s lowest-cost VCM producers.
In 2016, the total volume of VCM exported globally represented 7% of world production. The largest exporters are North America and Northeast Asia, which together account for 84% of the world’s VCM exports. Over the next five-year period, VCM trade is expected to decline by about 0.6% per year as more vinyls producers become integrated. VCM trade is challenging because of logistics, as VCM is a gas that needs to be shipped and stored liquefied under pressure, requiring expensive LPG ships for its transportation.
Over 99% of total global VCM consumption in 2016 was used for PVC production; VCM, therefore, follows the PVC market trend very closely. Demand for VCM is expected to grow at an average annual rate of about 3% during 2016–21.