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Thursday, March 15, 2018

Prospects for the Global Chlorine Market – Same Question Everywhere: What To Do With the Chlorine?

Chlorine in its elemental form is highly reactive and thus mostly consumed as it is produced. This consumption pattern is in stark contrast to caustic soda, which is easily stored and transported making it a fully fungible commodity. When demand growth for caustic soda outpaces demand growth for chlorine, chlor-alkali producers look for additional outlets of incremental chlorine production in order to satisfy caustic soda demand. This presentation provides insight into the various chlorine derivatives that can provide the needed incremental chlorine consumption.

Presentation by:
Chuck Carr
Vice President, Inorganics, IHS Markit
Chuck is the business leader for the Inorganics group, which covers the Chlor-Alkali, Vinyls, Soda Ash, and Bleaching Chemicals areas. Mr. Carr joined IHS Markit in 2006 and was previously Sr. Director Global Olefins. Prior to joining IHS Markit, Mr. Carr had a 21 year career with Total Petrochemicals USA with experience in refinery engineering/operations, purchasing, plastics logistics, and olefins commercial activities.


  1. New Delhi, January 25, 2018: Lately the global as well as domestic prices of caustic soda have risen sharply by ~35-45% in 9M FY2018 following healthy demand growth and lower supplies due to plant closures in Europe and China. The one of major two reasons for this is a decision by the European Union in December 2013, discontinuing the Mercury process for chlor-alkali units (~26% of total Europe capacity) beyond December 11, 2017. However, conversion to Membrane cell technology being an expensive exercise which along with high cost of power in these countries made conversion unviable for several units, consequently leading to the shutdown of mercury cell plants in Europe and thereby capacity loss. This is expected to keep Europe in short supply over the medium term.
    Globally, the chlor-alkali industry is driven by demand of chlorine as its major derivative PVC is used largely in the housing market, and since chlorine is a co-product of caustic soda, the demand and offtake of chlorine impacts the production of caustic soda. This is, however, in contrast to the Indian market where caustic soda enjoys a relatively more mature and developed market than that of chlorine. Due to restrictions in sea borne chlorine trade, domestic chlorine prices are largely unrelated to global chlorine prices unlike import-parity prices for other commodities

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  3. Elementary chlorine is not traded across region, but its derivatives such as EDC, VCM and PVC
    are traded extensively across the world. The two major net chlorine equivalent exporters in the
    world are North America (NAM) and Northeast Asia (NEA).
    • NAM chlorine equivalent export is projected to expand from 2.5 million metric tons to almost 3.0
    million metric tons by 2021 via increases in EDC and PVC export volumes to Southeast Asia,
    India and South America. NEA chlorine equivalent export largely consists of VCM and PVC being
    shipped out to SEA and the Indian subcontinent, respectively.
    • The European import and export position is projected to be almost balanced by 2021. Its net PVC
    export position will be "neutralized" by its requirement to import EDC from outside the region
    within the next five years.