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The Operation Rate of Chinese Chlor-alkali Industry Fell Below 60%, 2008-2009 - Since the 21st century, Chinese PVC productivity rises prominently, from 3.2 million tons in 2000 to 15.84 million tons at the end of 2008 with the growth rate of 500%. The productivity expansion of calcium carbide process PVC saw a high growth rate of 650%. Meanwhile, Chinese PVC apparent consumption was increased from 5.944 million tons in 2001 to the highest of 10.26 million tons in 2007. However, it was reduced to 8.71 million tons in 2008 due to the financial crisis. The productivity expansion growth rate was much higher than that of the demand. In 2009, there are 9 PVC producers carrying out construction and expansion in China, increasing the productivity by 1.67 million tons. By November 2009, Chinese aggregate PVC productivity was 17.48 million ton/year. It is forecast that Chinese PVC productivity will reach about 20 million ton/year by the end of 2010, aggravating the overcapacity.


Influenced by the global financial crisis and the excessive development of Chinese chlor-alkali industry in recent years, Chinese chlor-alkali industry falls into recession since 2008Q4. Pressured by the downstream demand reduction and domestic overcapacity, Chinese chlor-alkali industry enters the tough adjustment stage. One of the main downstream industries of the chlor-alkali industry – the aluminum oxide industry consumes over 11% of the total caustic soda consumption. Nevertheless, the operation rate of Chinese aluminum oxide industry is less than 55% at present, directly reducing the demand for caustic soda. It is similar in other chlor-alkali downstream industries such as paper pulp and synthetic detergent.   


In November 2009, Chinese PVC production was 793,000 tons, rising by 66.5% compared with 476,000 tons in November 2008. From January to November of 2009, Chinese PVC production amounted to 8.324 million tons, growing by 8.6% compared with 7.664 million tons in the same period of 2008. In November, Chinese calcium carbide production came up to 1.441 million tons, increasing by 72.3% YOY; from January to November of 2009, Chinese calcium carbide production totaled 13.741 million tons, rising by 4.7% YOY.


In November 2009, Chinese caustic soda production amounted to 1.827 million tons, rising by 52.9% YOY and 2.5% on the month-on-month basis. From January to November of 2009, Chinese caustic soda production was 17.628 million tons, growing by 6.8% YOY. According to statistics of Chinese caustic soda production in recent months, Chinese caustic soda industry enters the recovery and stable growth stage. However, owing to the insufficient downstream demand, the caustic soda growth rate remains low.


The average operation rate of Chinese chlor-alkali industry was only 60% in 2008 and it is estimated to continue to fall in 2009. Nevertheless, many chlor-alkali projects are still put into operation in 2009: 300,000 ton PVC and 300,000-ton caustic soda projects of China Pingmei Shenma Energy Chemical Group Co., Ltd; 200,000 ton PVC and 200,000 ton caustic soda projects of Shaanxi Beiyuan Chemical Industry Group Co., Ltd; 200,000 ton PVC and 200,000 ton caustic soda projects of Guangxi Tiandong Jinsheng Chemical Co., Ltd Phase I; 400,000 ton PVC and 400,000 ton caustic soda projects of Inner Mongolia Junzheng Chemical Co., Ltd; 150,000 PVC and 150,000 ton caustic soda projects of Inner Mongolia Wuhai Chemical Industry Co., Ltd; 120,000 ton PVC and 120,000 ton caustic soda projects of Hongli Chemical Co., Ltd; 100,000 ton PVC and 100,000 ton caustic soda projects of Guangxi Liuzhou Chemical Industry Group Co., Ltd; 200,000 ton PVC project of Gansu Yingchuan. Moreover, there will be new projects started or put into operation in 2010-2012: 450,000 ton PVC and 320,000 ton caustic soda projects of Xinjiang Zhongtai Chemical Company Ltd; 400,000 ton PVC project of Shandong Xinfa Chemical Co., Ltd; 300,000 ton PVC project of Hanwha to be operated in 2010; 1 million ton PVC project of Anhui Hwasu Corporation which is under construction and is scheduled to be operated in May 2011.


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