Download Report IHS CEH Report : Chlorine-Sodium Hydroxide (Chlor-Alkali) (Chemical Economics Handbook 2019)
PDF by S&P Global Commodity Insights; IHS Markit
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Format: PDF Language: English Pages: 244 Publisher: S&P Global Commodity Insights; IHS Markit Publitshion date: 2019 ISBN: 91708
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Description
Chlorine and caustic soda (sodium hydroxide) are two of the most important commodity inorganic chemicals, and together are normally referred to as chlor-alkali.A majority of chlor-alkali capacity is built to supply feedstock for the vinyl chain (EDC, VCM, PVC), and is typically consumed near the point of manufacture. Caustic soda is generally produced as a coproduct, and any surplus is supplied to the export market. Chlorine demand is driven by the construction sector, while caustic soda demand is driven by the manufacturing sector. The Minamata Convention on mercury, which entered into force as of 16 August 2017, restricts/reduces the use of mercury and will impact both chlor-alkali production (phaseout of mercury cell process) and consumption (restrictions on China's acetylene-based PVC industry). The vinyl chain represents about one-third of total global chlorine consumption, with China alone accounting for more than 12%. China will continue to drive the global market.
This chlor-alkali report presents world capacity, production, and consumption of both chlorine and caustic soda (sodium hydroxide, NaOH) by region and application for 2010–18, with a forecast to 2023. It does not cover the production of potassium hydroxide (KOH), but includes the chlorine produced from this process.
Global chlor-alkali consumption is a function of global economic growth or decline. Chlorine demand is driven by the construction sector, while caustic soda demand is driven by the manufacturing sector. Chlorine consumption is largely dependent on the vinyl chain, which includes production of EDC, VCM, and PVC. Demand for chlor-alkali roughly follows worldwide GDP; however, aggregate global growth or decline does not account for the differences in regions, masking the stronger growth in developing countries versus mature (developed) economies.
Several trends have impacted the chlor-alkali market. The first is the pace at which China has reached a position of self-sufficiency in both chlor-alkali and polyvinyl chloride (PVC) capacity. Chinese coal has provided a low-cost method to produce both carbon and chlorine. Much of China's recently added PVC capacity is produced from VCM via acetylene (instead of from EDC), owing to the low availability of ethylene in the country. However, future VCM production will be impacted by the Minimata Convention on Mercury calling for catalyst replacement (a mercury-based catalyst is used for converting acetylene to VCM). The treaty contains a specific clause relating to VCM, which states that after its effective date (16 August 2017), new VCM plants will not be allowed to use a mercury catalyst, and that all VCM plants have to switch to a mercury-free catalyst within five years after a technically and economically viable alternative becomes available. As a result, there will be no future expansions of acetylene-based VCM/PVC.
The second factor is the reduced cost in the United States for natural gas owing to the shale oil/gas boom. Most US ethylene crackers are based on natural gas, and in particular along the US Gulf Coast (USGC). As a result, the United States regained its low-cost advantage for producing chlor-alkali and the vinyl chain, with only the Middle East having a lower cost basis. Most European and Asian countries consume naphtha to feed their ethylene crackers, which is more expensive than natural gas. As a result, the United States, and in particular the USGC, will have a highly cost-competitive position over the next five years for the production of chlor-alkali and the vinyl chain.
The world is under increasing pressure to convert old mercury cell technology plants to membrane cell technology, or to close them altogether for environmental reasons. In an effort to help reduce global mercury pollution over the coming decades, the UN Minimata Convention on Mercury requires that mercury-based chlor-alkali plants are required to be phased out by 2025, with the possibility of two five-year extensions. The European chlor-alkali industry voluntarily agreed to phase out mercury cell technology by December 2017 as a result of environmental concerns and the high energy consumption; one producer extended this deadline but was shut by mid-2018. Mercury cell technology has declined from 7% of total global chlorine capacity in 2012 to 4% in 2018, and is forecast to decline to less than 2% by 2023.
Globally, chlorine capacity is forecast to grow at 1.5% annually during 2018–23, while production and consumption are expected to grow at 2.3% annually, leading to higher utilization rates during the forecast period. Caustic soda capacity is forecast to grow at a similar pace during 2018–23, as most of the chlor-alkali capacity conversions to KCl-based processes, which coproduces KOH instead of NaOH, are now completed. Caustic soda production and consumption are forecast to grow at 2.4% annually during 2018–23.
There are many applications for chlorine and caustic soda; please see the Additional resources section at the end of the report to view other IHS Markit reports that were used in the development of this chlor-alkali report.
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