SINGAPORE (ICIS)–Asia’s protracted supply
constraints for ethylene dichloride (EDC) may
persist for the near-term, but deep-sea
availability may increase from Q1 2021 if
producers’ chlor-alkali operating rates improve
in the US.
“Spot demand for EDC in Asia has structurally
been limited, but the combination of price
surges for downstream polyvinyl chloride (PVC)
and limited deep-sea availability has caused
EDC demand to remain buoyant,” noted a market
participant.
Global PVC prices have seen a general uptrend
in H2 2020, amid a recovery in downstream
demand as well as a sharp tightening of supply.
In the week ended 18 December, average prices
for PVC in southeast Asia have almost doubled
to $1,235/tonne CFR (cost & freight) SE
(southeast) Asia since its 2020 lowest of
$620/tonne in May, ICIS data showed.
EDC demand in Asia has subsequently remained
supported by PVC’s sustained uptrend, with
average prices in southeast Asia at $520/tonne
CFR SE Asia in the week ended 18 December. The
current prices are over triple its 2020 lowest
value of $140/tonne back in May, ICIS data
showed.
Most sellers in Asia have little to no spot
material on hand to offer. Plant operating
rates at US producers have remained capped on
weakened demand for caustic soda, with limited
deep-sea availability to other regions.
Integrated producers are also likely to tie EDC
production to the production of PVC.
Selling indications of $550/tonne CFR SE Asia
and above received limited buying interest in
the week.
Deep-sea material from the US may become more
available during Q1 2021, with higher
chlor-alkali plant operating rates recorded for
November after months at near-record low
production levels.
US material availability to Asia markets has
been structurally limited by demand from Brazil
to support PVC production after a major
chlor-alkali outage in that market.
Thumbnail photo: EDC is an intermediate
chemical in the production of PVC, which is
used in the construction sector (Bevil
Knapp/EPA/Shutterstock).
Additional reporting by Bill Bowen
Focus article by Jonathan Chou
