Published November 2015
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 applied 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 is also utilized in agricultural, electrical (wire and cable), and health care markets. The vinyls industry and VCM, as part of the chain, have 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.
VCM is among the top twenty largest petrochemicals in terms of world production. The vinyls industry and VCM, as part of the chain, have a history of change; manufacturers have exited 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. Ethylene dichloride (EDC), manufactured by chlorination and oxychlorination, is the feedstock for VCM production when made with ethylene. VCM is also produced directly from acetylene, a process long utilized in China—one of the largest consuming countries.
The following pie chart shows world consumption of vinyl chloride monomer:
China is the largest player in the VCM market, with nearly half of the total global capacity and about 38–39% of total global production and consumption in 2015. The United States follows as the second-largest 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.
The VCM market remained under immense downward pressure at the beginning of 2015 from a combination of weaker demand in Southeast Asia and the impact of a weaker PVC market. Also, the market is absorbing additional supply from Tosoh’s recent expansion project in Japan. However, in general, global vinyls demand is recovering, with most regional demand back on track to achieve trend-line growth. The recent drop in energy prices should have a positive impact in stimulating resin demand across the global market despite a marginal decline in forecast world GDP growth. Continued investment in infrastructure and construction spending, especially in developing economies, should help boost the world vinyl demand.
Demand for VCM is expected to grow at an average annual rate of 3.7% during 2015–20. Consumption of VCM will remain highly dependent upon the performance of the PVC business.