Trichloroethylene Oversupply in China

By Zheng Jiebin, China Chlor-Alkali Industry Association

Growth of capacity & output

Trichloroethylene (TCE) is used mainly to clean metal or as a raw material in manufacturing other chemicals. Both production and sales of TCE were brisk from the 1960s to the early 1970s. Due to displacement by the use of other products, consumption was reduced and output started to drop in the mid-1980s. With the signing of the “Montreal Protocol”, the demand rapidly increased for TCE as a substitute raw material in the production of more complex chemical raw material intermediates and the refrigerant HFC134a, so consumption returned to earlier levels and stabilized.
With increased protection of the environment, the consumption of TCE in cleaning metal has declined in recent years. Owing to increased demand for refrigerant HFC134a, however, the consumption of TCE in the manufacture of chemical raw materials is going up. Especially in China, TCE is mainly used as a raw material for refrigerants and the related demand is quite big.
In the initial development of the TCE sector the domestic supply was typically short. Despite a constant increase of output, it has never caught up with growing domestic demand – the import volume even grew for many years. But in recent years, the import volume has declined somewhat. Table 1 shows the volume of TCE imported to China during 2005-2015.
China’s TCE capacity is close to 600 kt/a, according to incomplete statistics. With constantly increasing capacity and output, China is already fully self-sufficient and the varied demands of consuming sectors can be met.

Undifferentiated demand

The application of TCE in China is heavily concentrated in the refrigerant sector. Demand is therefore dominated by that sector. As the growth of demand is much slower than the growth of the supply, oversupply has become prominent. Figure 1 shows the TCE supply/demand trend in China during 2007-2015.


China made around 300 kt of TCE in 2015, according to China Chlor-Alkali Industry Association. In the slack market, most TCE producers were losing money. The low overall operating rate of the sector reflects suspension of production at some TCE units.

Reduction of prices

Due to prominent oversupply and shrinking demand, the market prices of TCE have slid constantly from the peak in 2010 of over RMB10 000/t to less than RMB5 000/t, down over 50%. Figure 2 shows the price trend of TCE in China during 2012-2015.


Table 1    Trichloroethylene volume imported to China, 2005-2015  (ton)

Year    2005    2006    2007    2008    2009    2010    2011    2012    2013    2014    2015
Amount    23 078    32 493    43 989    47 616    31 467    4 829    274    0    0    0    4 174








Refrigerant prices have recently dropped from a high level, so the TCE market has gone into decline. Due to chlor-alkali firms’ need to balance chlorine utilization, however, the construction of new TCE units has by no means cooled down. TCE oversupply is therefore already serious.
The TCE sector in China will adopt technical innovation as a driver, highlight capacity reduction and cost reduction, and restructure and upgrade the industry.