Wedonay.com Report on Mar 7th, Shin-Etsu Chemical recently announced a capacity expansion plan at its Plaquemine, Louisiana plant in the United States, with an investment of $3.4 billion. This initiative aims to add ethylene cracker, chlor-alkali, and vinyl chloride monomer (VCM) units, expected to be completed by 2030. This may exert supply pressure on U.S. VCM producers such as Olin Corporation.

According to information released by the company, the project will be constructed in phases, starting with the addition of a new 625,000 tons/year ethylene cracker, along with 310,000 tons/year of chlor-alkali and 500,000 tons/year of VCM units. Shin-Etsu Chemical's existing Plaquemine plant has capacities including 500,000 tons/year of ethylene, 1.96 million tons/year of caustic soda, and 2.76 million tons/year of VCM. This expansion will further enhance its integration capabilities in the chemical sector.

Shin-Etsu Chemical has long relied on external suppliers for upstream raw materials and has a VCM procurement agreement with Olin Corporation. In 2023, the two parties were involved in a legal dispute over supply issues, and the court ruled in favor of Shin-Etsu Chemical in February this year, awarding $57 million in damages. Once the new project is operational, Shin-Etsu Chemical is expected to achieve self-sufficiency in its vinyl chain, which may increase VCM market supply and exert competitive pressure on Olin Corporation.

Olin Corporation has a VCM capacity of 835,000 tons/year at its Freeport facility but is not fully integrated into PVC production. The company has partnered with Kem One to sell PVC in North America but lacks domestic PVC assets. If VCM sales face obstacles, Olin may reduce its chlor-alkali utilization rate, affecting its approximately 3.9 million tons of caustic soda production in North America.