PVC

POLYVINYLCHLORIDE 2007 – 2011 In the capacity segment the world’s total PVC capacity grew from about 40 million tons in 2007 to cca. 46 million tons in 2011.In Asia the continent’s PVC capacity was about 25 million tons accounting for about the 63% of the total global PVC capacities,when within Asia the Chinese total PVC capacities accounted for about cca. 65% of the total Asian PVC capacities,although actually the Chinese PVC capacities could be somewhat bigger,since there is not included a great many number of small and uneconomical Chinese PVC assets.Thus in Asia,but also in the world China is an even stronger determining factor,than in the branch of commodity polyolefins.In between 2007 and 2011 the Chinese PVC capacities annual growth rate was about 7,2 % and at the same time the Chinese PVC plants’ operating rate was gradually sinking from about 85% in 2007 to 58% in 2011 at an annual production growth rate of 5,6% in between 2007 and 2011,which indicates the massive PVC surplus capacity as well as PVC industry structural deficiencies of China in the period between 2007 and 2011.Under the aegis of the Chinese PVC industry restructuring program in the future China will construct PVC capacities whose nameplate capacities will be at least 0,3 million tons per year of PVC. At the same time it is expected the prevalence of the calcium carbide based PVC cap[acities will remain at least by 2022. At the same time still in Asia,the Indian PVC capacities stood at cca. 1,35 million tons in 2011,which accounted for cca. 3% of the total global PVC capacity.Despite the Chinese massive PVC capcity surplus the Indian PVC capacity growth was 4% in the period between 2007 and 2011,but on the other hand this growth of Indian PVC capacity in 2007 and 2011 given its relatively small incremental size,did not have any impact on the overall Asian PVC balance in between 2007 and 2011. In regard of these facts it so surprprise,that the Korean and Japanese PVC capacities manifested an annual growth rate of 0% and -3,4 5,respectively,although in the latter case of Japan the tragic events of March 9,2011 had a devastating effect on some spheres of the country’s petrochemical industry,too.In Europe the continent’s PVC capacity dropped from cca. 7,7 million tons in 2007 to 7,4 million tons in 2011;thus in 2011 the European PVC capacity accounted for about 16% of the total global PVC capacity. In between 2007 and 2011 the European continent lost about 0,3 million tons of PVC primarily because of the ongoing struggle of the construction market and partly because of the low profitability in the attached electrochemical unit as well as because of weak pricing.In addition,most PVC capacity closures are expected in Europe with the most vulnerable being some Eastern European plants but also some West European plants will be under threat of closure. Thus in between 2007 and 2011 the continent’s PVC capacity growth rate was about -0,8%.In the same period the Middle East PVC capacity grew by 13,2%,approaching the cca. 1,1 million tons in 2011 which accounts for about 2% of the total global PVC capacity. In this periof of 2007 and 2011 the African PVC capacity remained steady. In North America the total PVC capacity dropped from cca. 8,4 million tons in 2007 to cca. 7,9 million tons in 2011,when the persistent crisis of the US housing market had an adverse effect on the North American PVC plants operating rate generating PVC oversupply between 2007 and 2011,when this PVC surplus was exported. Thus the North American PVC capacity growth rate was -1,2 % between 2007 and 2011. In 2011 the North American PVC capacity accounted for about 17% of the total global PVC capacity.In Central and South America the PVC capacity growth rate was a modest 0,6%. In the PVC production sector,the global PVC output grew from 35 million tons in 2007 to cca. 36 million tons in 2011,when in 2011 the total global operating rate of the PVC facilities was about 78%.This decent global PVC production growth was exclusively due to China’s imbalanced PVC industry operation in between 2007 and 2011. Thus in this period the total global PVC output growth rate was about 0,4%,driven by the Chinese construction and housing industry growths;in China proper the PVC production growth was about 5,6%,when as opposed to the commodity polyolefins industry,China is fully self-sufficient in the PVC industry and market sectors. Concurrently it can be stated,that in 2011 the Chinese PVC output of cca. 12,3 million tons accounted for about 35% of the total global PVC output and about 65% of the total Asian PVC output,despite the fact,that for instance in 2011 the chines total PVC capacity operating rate was estimated to be 58%,as it is already jotted down in the PVC capacity segment. Despite the Chinese dominance in the Asian PVC production the Indian as well as Vietnamese PVC outputs were recorded to display solid production growth rates of 7,3% and 10,1%, respectively. In Europe, the continent’s PVC production dwindled from cca. 7,5 million tons in 2007 to 6,2 million tons in 2011,which accounts for 17% of the total global PVC output.In terms of PVC production growth this implies a -3,6% PVC output growth rate. The Middle East PVC production grew from 0,55 million tons of PVC in 2007 to cca. 0,67 million tons in 2011,which was cca.2% of the total global PVC production in 2011,implying a cca. 4% production growth. The region of the CIS countries’s PVC output grew from cca. 0,6 million tons in 2007 to cca. 0,75 million tons in 2011,which accounted for about 2% of the total global PVC production in 2011 at an annual output growth rate of 4,3%,driven by the domestic construction as well as housing and infrastructure development sectors.In North America the total PVC production fell from cca. 6,7million tons in 2007 to cca. 6,0 millin tons in 2011,when the contraction of the domestic market caused by the housing sector was especially striking.The created oversuplied amount of PVC was exported to foreign markets. Thus in the period of 2007 and 2011 the North American PVC output growth rate was about -2,3%. In 2011 the North American PVC output accounted for cca. 17% of the total global PVC production.Finally in Central and South America the annual PVC output growth rate was about -1,4%,which in absolute numbers meant a cca. 1,8 million tons of PVC output in 2011,which in turn accounted for 5% of the total global PVC output . In the PVC consumption segment, the global PVC consumption grew from cca. 35 million tons to 36 million tons.The Asian PVC consumption rose from cca. 15,5 mil;lion tons in 2007 to cca. 19,5million tons displaying a growth rate of consumption cca.4,8%.In 2011 the Asian PVCconsumption accounted for 56% of the total global consumption.In Asia the Chinese PVC consumption,driven by the housing sector as well as the construction industry and the infrastrcure expandin sectors grew from cca. 9,7 million tons in 2007 to cca. 13 million tons in 2011,thus in 2011 the Chinese PVC consumption accounted for about 36% of the total global PVC consumption,at a consumption growth rate of 6,2%.Stioll in Asia the Indian PVC consumption was cca. 1,3 million tons in 2007 which increased to cca. 2 million tons by 2022.Thus in 2011 the Indian PVC consumption volume accounted for abou 6% of the total global PVC consumption. In 2007 the Euroipean PVC consumption was about 7,6 million tons which sank to cca. 6,2 -6,3 million tons by 2011;thus in 2011 the European PVC onsumption accounted for 17%-18% of the total global PVC consumption. The commodity polyolefin industry and market woes were replicated in the PVC sector,too.And more bad news will follow for the European/not just/ PVC industry. The Middle East PVC consumption grew relatively massively from cca. 0,8 million tons in 2007 to cca. 1,15 million tons in 2011 a tan annual consumption growth rate of 7,2%. In 2011 the Middle Eastern PVC consumption accounted for about 3% of the total global PVC consumption;undoubtedly the growth of PVC consumption was associated with the expanding infrastructural industry. The African PVC consumption in 2011 was about 1 million tons,that is cca. 3% of the total global PVC consumption. Also the region of the CIS countries produced a healthy PVC consumption growth,driven by the construction and housing industry segments.Thus in 2007 the total PVC consumption amounted to cca. 1,15 million tons ,which increased to cca. 1,45 million tons by 2011.Thus in 2011 the CIS region’s PVC consumption accounted for about 4% of the total global PVC consumption. The course of the PVC consumption in North America between 2007 and 2011 demonstrates the depth of the economic problems there. Thus in 2007 the continent’s PVC consumption was about 6,15 million tons to nosedive to cca. 4,45 million tons in 2011 ,as a result of the credit crunch and other collateral damages. Thus in 2011 the North American PVC consumption accounted for about 12%-13% of the total global PVC consumption ,at an annual growth rate of -6,2% between 2007 and 2011. Lastly,the Central and South American PVC growth rate was 2,1% between 2007 and 2011 ,when in 2011 the continent consumed about 2,7 million tons of PVC accounting for a cca. 7,5% of the total global PVC consumption. 2012 - 2022 In the form of so called pivot tables of CAPACITIES PRODUCTION AND CONSUMPTION there are contemplated and submitted three scenarios of polyvinylchloride global production and consumption future . BASE SCENARIO In the capacity segment,according to this scenario,the world total PVC capacities will expand from cca. 47 million tons in 2007 to 57 milliion tons in 2022.This golabal capacity expansion will be driven by Asia/in particular by China/,but the Chinese capacity expansion rate will be relatively moderate because of the anticipated simultaneous rebuilding of the country’s PVC production asset structures,where the share of the bigger plants with nameplate capacities above 0,3 million ton per year will be much higher,that at present.It is expected the smaller PVC capacities in China will be relatively shortly eliminated and the entire PVC production industry will be rebuilt ,when as mentioned already before,there will be constructed plants with capacities of several hundred thousand of tons per year only1,2.There will be built larger PVC plants based on acetylene as well as ethylene.In conformity with the base scenario the rebuilding of the Chinese PVC industry will last several years and the country’s annual capacity growth between 2012 and 2022 will be about cca.2 %2 . This base scenario assumes the coal/calcium carbide based PVC technology will be dominant in the future too ,however this dominance will be much less than the present cca. 75%3 /currently about 75%-77% of PVC capacity is based on calciumcarbide as raw material/. In India,there will be a double digit annual PVC capacity growth4 ,a long overdue capacity expansion for the country. Japanese and Korean PVC capacities remains steady or even some capacity reductions could be possible5 . Another Asian country with substantial PVC capacity increase ,albeit from a very low base could be Vietnam.According to this base scenario,in Europe there is anticipated a capacity cut of some hundred thousands of metric tons magnitude5 ,when the most vulnerable regions of the continent are seem to be parts of Central East Europe ,France and Italy6. In Africa it is believed the planned new capacities and existing capacity expansion specifically in Egypt will be built by 20157 with some unexpected capacity additions/although not very likely/;in Africa the PVC capacity annual growth rate of 6,1% will be driven by the development of the infrastructural construction industry. For the region of the countries of the CIS region this base scenario predicts that the planned PVC capacity additions including those ones in joint ventures will be completed by 20178 to be followed with some rather courageous new capacity additions taking advantage of the local raw materials as naphtha and/or natural gas ethylene and rock salt on the raw material side and on the other hand the growing demand of the housing market sector as well as the infrastructural sectors. In conformity with this base - to optimistic scenario for the region of the CIS countries,the PVC capacity annual growth rate between 2012 and 2022 will reach about cca. 8,6%,when some elder PVC plants will be closed and dismantled. For North America,particularly the US and Canada the startup of the planned shale gas based ethylene crackers will make feel their impact in the US and Canada too alongside with the slowly rcovering housing market ;which will result in an annual PVC capacity increase of at least 1% or more9. In North America these anticipated capacity increases, especially during 2016 and 2017 are somewhat tricky and misleading,since these new capacities based on shale gas ethylene will step in as a replacement of already closed costly naphtha ethylene based PVC plants.Furthermore this means North American capacity increases from relatively high base.Still in connection with North America,as an impact of the shale gas as ethylene raw material there is a possibility of building new PVC capacity in Canada,too based on US supplied ethylene /or shale gas for that matter/. By definition this scenario assumes there will be no environmenta and/or technoeconomical difficulties with the technologies based on shale gas. In South America,particularly in Brasil,the annual capacity increase might approach cca. 6%10 ,led by Solvay Indupa and Braskem investments. In the production segment ,as outlined in this base scenario,the Chinese annual PVC production will grow by about 3,2% driven by the domestic market demand,that of India’s PVC production growth rate will be cca. 11% between 2012 and 2022.In 2022 the Chinese PVC production will account for cca. 39% of the total global PVC output reaching cca 1,5 million tons in 2022,,at the same time , for that matter ,the Asian total PVC output will account for 59% of the total global PVC output.The European PVC output will manifest an annual 1,5% drop of PVC output between 2012 to 2022,which in terms of absolute numbers means a production drop from cca. 6,3 million tons in 2012 to 5,3 -5,4 million tons of PVC in 2022,thus in that year the European PVC production will account for 10% of the total global PVC production. The African PVC production wwill be growing strongly by 9,5% per year and is assumed this will be concentrated mainly to the Maghreb and North Africa. In 2022 the total African PVC production will account for cca. 2,5%-3% of the total global PVC production. The CIS countries PVC output is projected to grow by about 8,0% to 8,5% per year between 2012 and 2022,driven by the development of the domestic housing market as well as the development of the rural and urban infrastructures; in 2022 the region ofr the CIS countries will produce about 2,7 million tons of PVC accounting for about 5% of the total global PVC output.North Americaְs’s output will grow by 2,5% to 3,0% per year,when the continent’s PVC output will be about 8,2 million tons accounting for 16% of the total global PVC output.It isd believed a considerable part of this /supposedly relatively cheap/PVC will be exported ,since the domestic market still will not be able to absorb greater amount sof PVC. The South American growth led by Brasil will be cca. 4,5% per year,when in 2022 the continent’s PVC production will account for 6% of the total global PVC output. In the consumption segment, according to this base scenario,the world’s total global PVC consumption will grow from cca. 38 millioin tons in 2007 to 50 – 51 million tons in2022,presenting an annual consumption growth rate of 2,6%.By 2022 then Asian total PVC consumption will reach cca. 29 to 29,5 million tons accounting for cca.58% of the total global PVC consumption,at a consumption growth rate of 3,1%.In Asia the Chinese consumption will reach 20 million tons of PVC by 2022,which will be 69% of the total Asian PVC consumption.The Chinese PVC consumption annual growth will be 3,1%,driven by the domestic market.In this period China retains its PVC self-sufficiency.In the same period the European PVC consumption of 5,8 million tons in 2007 will grow to cca. 6,1 million tons accounting for 12% of the total global consumption at a modest growth rate of 0,4%,which implies a struggling consumption segment. The African PVC consumption will grow from cca. 1 million tons in 2007 to cca. 1,7 million tons in 2022,when the continent remains a net PVC importer especially from North America. The North American PVC consumption’s growth rate will be 1,1% and it is assumed that in this period of 2007 and 2022 the continent will be a net PVC exporter.In absolute numbers the continents’s PVC consumption in 2022 will be 5,1 million tons accounting for about 10% of the total global PVC consumption. The Central and South American PVC consumption will grow from 2,9 million tons in 2007 to 3,4 million tons by 2022,accounting for 6%-7% of the total global PVC consumption. OPTIMISTIC SCENARIO In conformity with the optimistic scenario the total global PVC capacity will be 62 million tons in 2012,exceeding the base scenario’s 2022 PVC capacity by 5 million tons.Acording to this scenario the global PVC capacity growth driver will be Asia/including China and India/,when the continent’s total PVC capacity will be cca. 37 million tons in 2022,accounting for 60% of the total global PVC capacity.According to this scenario the Chinese capacities annual growth rate will be about 3 %,while those of the Indian ones cca.11,1%,starting to grow from a relatively low base of 2012.Also according to this scenario the Chinese effective PVC capacity in 2022 will be larger by about 2,3 million tons than that in the case in the basic scenario. In this scenario India’s surging PVC capacities are the same as in the case of base scenario.Subtotal Asian capacities will be larger by about 4 million metric tons in 2022 than in that in the same year of the base scenario,accounting for 80% of the global PVC capacity growth in 2022 in comparison with the same year of the base scenario. In this scenario Europe’s PVC industry still remains depressed,but with signs of improvement by 2022,assumingly thanks to to more readily accessible raw material sources/perhaps in North Africa/;in 2022 the European PVC capacity reaches 6,5 million tons accounting for about 10% of the total global PVC capacity. The Middle East capacities annual growth between 2012 and 2022 would be about 3,8% ,when in 2022 the region’s PVC capacity will be 1,62 million tons accounting for 2%-3% of the total global PVC capacity.It is supposed this additional capacity will be located in Iran and will be based on either ethane or naphtha ethylene. The annual PVC capacity growth would approach cca. 8,6% in the region of the CIS countries/which compares well with the base scenario’s capcity/ accounting for about 4,5% -5% of the total global PVC capacity. The North American annual capacity growth rate would be 1,6 % reaching a total of cca.9,4 million tons in 2022,accounting for 15% of the total global PVC capacity. /note: at this point the more detailed distribution and quantity of the shale gas based ethylene is not known,but still there are indications that most of this ethylene will be exported to Asia and Latin America,South America and the rest would be absorbed by the slowly growing US market for the production of PE,PVC,MEG and HPEO-highly purified ethyleneoxide,still allowing relatively large derivative capacities getting on stream/. In this optimistic scenario South American annual growth rates would remai