Published May 2019
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 2018, 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 more than 40% of the total global capacity, production, and consumption in 2018. The second-largest consumer was North America, 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.
Over 99% of total global VCM consumption in 2018 was used for PVC production; VCM, therefore, follows the PVC market trend very closely. Other markets for VCM include vinylidene chloride, produced by the reaction of VCM with chlorine, and use as a comonomer in the production of vinyl chloride/vinylidene chloride copolymers. These other uses are mainly in the United States, Western Europe, and Japan.
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. In 2018, the total volume of VCM exported globally represented about 7% of world production. The largest exporters are North America and Northeast Asia, which together accounted for more than 80% of the world’s VCM exports in 2018. The Middle East is also an important source of the world’s VCM export supply, with the advantage of low-cost production located near major markets. The major importers are China, India, and Southeast Asia. Over the next five-year period, VCM trade is expected to decline as more vinyls producers become integrated.
Overall, China will be one of the faster-growing regions for VCM demand during the forecast period, with a projected average growth of about 4.5% per year over the next five years. Consumption will rise at the fastest rates in the Indian Subcontinent and Africa during 2018–23, with expected average growth of about 13% and 10% per year, respectively.