P.1 

OAR Box 1878 

Prepped by Charmelle Mathews 

Document Number: 

65) 11-1-44 

Docket Number: 

A-90-19 

Printed 11/28/200811:47:27 AM Sheet 65 of 68 
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{fi(^A^>S^4^ Her 

A-90-19 

IM-44 

JUNE 1988 

Previous Report — November 1985 ETHYLENE DICHLORIDE 

FOCUS....Ethylene dichloride (EDC), also known ss 1,2-dichloroethane, is principally an intermediate for 

making vinyl chloride monomer (VCM), which itself is used principally to make polyvinyl chloride (PVC). 

Less than 10K of US production of EDC is used for other purposes, mostly export and producing various 

chlorinated solvents. The EPA removed EDC from its list of approved pesticide fumigants in late 1985. Except for the part of Borden's VCM plant based on acetylene feedstock, all US vinyl chloride monomer production is based on EDC, which is made from ethylene and chlorine. i.- • 

PVC demand has increased every year since 1985, and therefore so has demand for EDC. Recent growth in 

PVC stems from increased acceptance in products used in residential construction such as vinyl siding, 

used to a greater extent in new construction, as well as rigid pipe, tubing, and fittings. PVC is also 

making inroads in applications formerly served by asbestos cement, metal, and clay piping, all of which 

have been losing market share to PVC. Since 1985, US EDC demand has been in the range of 1.1 to 1.3 billion lbs./year, almost double that of recession year 1982. Capacity utilization increased to almost 8535 in 

1988, up from 43S in 1982. Net exports in 1987 were 7.5!8 of total US production, down from 8.755 in 1982. 

Capacity increases in the Far East and Saudi Arabia will reduce US export demand in the future. In 

1985, over 90% of US EDC exports went to Japan and Taiwan. The ratio in 1987 was over 92K. The relatively 

favorable economics of balanced, integrated plants to manufacture VCM will encourage additional new plant 

construction in other countries to satisfy locsl demand for VCM. The EDC produced in these plants will be 

used captively, and be made available to the merchant market only in unusual circumstances. 

OUTLOOK....The principal use for EDC as a precursor to VCM and then to PVC is likely to remain unchanged. 

With the minor use as a fumigant eliminated by EPA action, the trend is toward 98% dependence on PVC demand. As demand for PVC in other countries justifies construction of integrated plants, export demand will 

trend downward. New integrated plants represent the most cost efficient approach to new capacity at this 

time. Optimum capacity is approximately 660 million pounds per yesr, based on current technology. A balanced integrated plant employs both chlorination and oxychlorination reactions and yields VCM with chemical inputs of ethylene, chlorine, and oxygen. Domestic demand for PVC, and therefore EDC, is dependent 

principally on housing construction (about 65S) and secondarily on consumer applicstions (automotive and 

packaging). The Federal Food and Drug Administration (FDA) currently permits the use of PVC (with strict 

residual VCM requirements) in food-contact applications. As a result, increased use of PVC in bottles and 

food wrapping film can be expected. This potential increase will be tempered, however, by new and pending 

regulations covering the use of all non-biodegradable plastics because of solid waste disposal problems. 

With mature end uses and no technological breakthrough apparent, US demand for EDC will follow the 

business cycle as it affects demand for PVC. Moderate growth in new housing construction is expected. The 

next five years will probably show average growth in domestic demand for EDC of less than 555 per year. 

PRICING. ...Discounting from published list prices for EDC has been the norm for the past 25 years. Because 

of the heavy dependence on the pricing of PVC, which basically controls the price of VCM, and hence EDC, 

price increases will be possible when corresponding increases for PVC are accepted by the market place. 

Over 90% of EDC produced in the US is used captively, mostly for the manufacture of VCM. As long as a 

producer of VCM supplies his own EDC, the issue of EDC price is somewhat academic. The motivation to increase price for EDC is not as great as for typical merchant market chemicals, in that the integrated producer is increasing the price to himself, logical only if he can succeed in increasing the price to others 

of VCM or other derivatives. Export prices should increase at a faster rate than domestic values because 

of ^the relative strength of foreign currencies. However, the increase in new plant construction abroad 

wMI: "have a reverse effect on the trend for export prices. The extent to which these competing forces 

'neutralize, each other will be influenced primarily by the rate of increase of worldwide demand for PVC. 

\ 

\ 

1960 

AVERAGE PRICE RANGE 

Cents Per Pound 

ETHYLENE DICHLORIDE 

Bulk - FOB Plant 

1965 1970 1975 

A 

radeXist; 9 9 9 

AvgV^Sales'* 5 5 3 

Ex'port ^Value 

A x,y~A 

XSVWVt AND DEMAND.... Mil lions of Pounds 

11 

8 

1980 

13.75 

10 

12 

1984 

17 

11 

9 

1985 1986 1987 1988 

17 

9 

9 

19 

8 

10 

, .Estimated....Domestic US 

Capacity 

Production 

Imports 

Exports 

Demand 

1960 1965 

2640 

1267 2456 

1970 

B135 

7460 

680 

6780 

1975 

12800 

7977 

130 

7847 

1980 

16390 

11108 

22 

612 

10518 

1984 

17520 

10710 

27 

759 

9978 

1985 1986 

12101 

12101 

14 

973 

11142 

15817 

12940 

69 

583 

12426 

19 

8 

11 

1987 

15800 

12197 

38 

953 

112B2 

19 

IKE ) 

12(E) 

1989 

19 

1988 1989 

15800 

13300(E) 

120(E) 

1130(E) 

12290(E) 12000 

1991 

19 

1991 

13500 

AVAILABILITY....Only two US producers of EDC, Shell and Vulcan, do not manufacture VCM. Vulcan uses some 

EDC for chlorinated solvents and with Shell, sells the balance on the merchant market. Most EDC produced 

by the other US manufacturers is used internally for VCM, whose demand forecast for 1988 indicates a need 

for about 12.0 billion pounds of EDC. Existing capacity for EDC is adequate to supply this quantity. In 

addition to existing capacity, Occidental Chemical Corp. plans to build an 800 million pound per year EDC 

plant at Corpus Christi, TX with production starting in late 1989. Over one billion pounds of US capacity 

have been idled and could be re-started when demand is high enough. Raw material supplies have been tight 

during the past several months. Because of new EDC plant construction overseas, exports (tonnage and relative prices) are likely to decline in the future. 

y 
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PRODUCERS AND CAPACITIES - ETHYLENE DICHLORIDE - MILLIONS OF POUNDS 

v PRODUCER 

Dow Chemical 

Dow Chemical 

Formosa Plastics 

Georgia-Gulf 

BF Goodrich Chemical 

BF Goodrich Chemical 

Occidental Chemical 

Occidental Chemical 

PPG Industries 

Shell Chemical 

Vista 

Vulcan 

LOCATION 

Freeport, TX 

Plaquemine, LA 

Baton Rouge, LA 

Plaquemine, LA 

Calvert City, KY 

La Porte, TX 

Deer Park, TX 

Convent, LA 

Lake Charles, LA 

Deer Park, TX 

Lake Charles, LA 

Geismar, LA 

TOTAL 

19BB CAPACITY 

2700 

1700 

600 

1600 

1000 

1585 

165 

800 

2700 

1400 

1200 

350 

15800 

Based on announced capacities and trade estimates. Occidental Chemical is building 

an EDC unit next to a chlor-alkali plant purchased from DuPont at Corpus Christi, TX. 

Start-up of the 800 million pound facility is scheduled for mid-1989. A major portion 

of its output is planned to go to the export market, after internal needs for VCM 

production are satisfied. 

END USES....Ethylene dichloride is a colorless, chloroform-like liquid used mainly for the production of 

vinyl chloride monomer (VCM). Currently, only one US VCM plant (Borden) still uses the addition of HCl to 

acetylene process to make vinyl chloride monomer. Polymers of VCM and co-monomers have a variety of general purpose and specialized plastic applications. Although there are new outlets in electrical and electronic applications, polyvinyl chloride is generally a mature industrial material. There are now two principal markets, flexible and rigid, with about equal tonnage for both types. PVC pipe and construction profiles typify rigid applications, whereas packaging films, calendered sheeting, and vinyl-coated fabrics 

are major flexible products. Athletic goods, toys, and under-the-hood automotive components molded from 

plastisols are important flexible products. 

VCM production now accounts for approximately 98% of EDC consumption in the US. Chlorinated solvents, 

including perchloroethylene, trichloroethylene, and 1,1,1-trichloroethane, account for about 1%. Miscellaneous applications include vinylidene chloride and lead anti-knock blends. Dow and Carbide produce ethyleneamines from EDC. Carbide also produces ethyleneamines starting with ethylene oxide rather than EDC. 

END USE PATTERN - 1988 ESTIMATE 

DERIVATIVE 

Vinyl Chloride Monomer 

Chlorinated Solvents 

Miscellaneous 

PERCENT 

98 

1 

1 

MANUFACTURING....Until about 17 years ago, EDC was isolated as a by-product in the chlorohydrin process 

for manufacturing ethylene oxide. Ethylene oxide is no longer produced by the chlorohydrin route in the 

US. Since late 1970, all domestic EDC has been made by the chlorination or oxychlorination of ethylene. 

Most EDC is produced as an intermediate in the integrated manufacture of vinyl chloride or chlorinated 

solvents, although some EDC is also isolated for synthesis of other derivatives or for shipment. Most VCM 

is produced by a balanced process that includes both chlorination and oxychlorination steps. The benefit 

of this balanced process is that chlorine, ethylene, and oxygen are the only feedstocks required. Hydrogen 

chloride required in the oxychlorination step is generated within the system. Adjustments to the relative 

flow rates of specific constituents is possible when desired. For example, hydrogen chloride generated 

elsewhere could be utilized as an external feedstock if doing so is economically advantageous. The stoichiometry of the balanced process is: 

000000000000000000000000000000000000000000000000000000000 

Chlorine - 0.63 lbs. 0 EDC 0.89 lb 

5» 0 > .Chlorination. $> 

0 / 

0 / 

0 / 

Ethylene - 0.48 lbs. 0 / EDC 0.77 lb 

$> 0 —. ->• .Oxychlorination. -^ 

0 

0 Recycle / 

0 < -

0 HCl 0.58 lb 

0 

0 

0 

0 Vinyl Chloride - 1.0 lb. 

0 

0 

0 

0 

0 

0 

000000000000000000000000000000000000000000000000000000000 

ENVIRONMENTAL ASPECTS....The EPA classifies EDC as a probable human carcinogen. An effort to reduce vent 

gas emissions from EDC processing plants c^n be expected, most likely by converting from air to oxygen in 

the oxychlorination plants. Doing so will reduce the volume of vent-gas significantly. The 1987-1988 ACGIH 

recommended exposure limit is 10 ppm for an 8-hour time-weighted average. 

To the best of our knowledge, the information contained herein is accurate. However, we 

do not assume any liability whatsoever for the completeness or accuracy of this report.