Published February 2012
The vinyl chain (EDC/VCM/PVC) represents an important part of the petrochemical industry. An important monomer within the chain is vinyl chloride (VCM), which is used primarily for the production of polyvinyl chloride (PVC) homopolymer and copolymer resins. PVC has the advantage of being utilized in conversion and fabricating 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.
VCM is among the top twenty largest petrochemicals in 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. While China is a very large manufacturer, the United States remains the largest VCM manufacturing region because of its low-production-cost position in chlorine and ethylene raw materials. The movement toward lower natural gas and feedstock costs for the vinyl chain in the U.S. and Canadian region, via shale gas, appears to be solidifying the region's position as one of the world's lowest-cost producers.
The following pie chart shows world consumption of vinyl chloride monomer:
In the early 2000s, the U.S. Gulf Coast lost some of its competitive advantage in vinyl chain (chlor-alkali/EDC/VCM/PVC) production because of the increase in natural gas prices. The United States has regained some of the advantage, as crude oil prices have risen to a ratio of 25–30 times that of natural gas. This disparity between oil and gas prices has been widened with the increasing commercialization of shale-derived gas and natural gas liquids. Cheaper natural gas and ethane have not only yielded lower ethylene costs than the predominantly naphtha-fed ethylene in much of the rest of the world, but has also resulted in lower process costs in the chlor-alkali production chain.
Consumption of VCM will remain 99% dependent upon the performance of the PVC business, which is expected to increase globally at about 4.5% annually from 2010 to 2016, as the world continues to recover from the financial and economic crisis of 2008/2009. VCM growth in developing regions like the Middle East, China and the CIS will be considerably higher than in traditionally developed economies like Western Europe, North America and Japan.
VCM expansions had been planned in the Middle East, Russia and China, but many of these plans have been delayed as a result of the economic crisis. In China, expansion of coal-based acetylene-based technology proceeded at nearly 20% per year during 2005–2010, but is likely to slow to about 7% per year over the next six years. China plans to increase VCM production by 8% per year to supply an increasing share of demand for PVC, but will continue to import substantial quantities of both VCM and PVC.