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Research Report on China Polyvinyl Chloride (PVC) Industry, 2017-2021


In the 21st century, the growing PVC industry in China poses increasing influence on that of the globe. In recent years, China becomes the world's leading PVC manufacturer and consumer. The output volume of PVC reached 16.10 million tons with a slight decline YOY in China in 2015.

Meanwhile, the aggregate consumption of two major PVC consumption fields including tubing and pipes together with profiles, doors and windows accounted for over 50% of the total. The tubing industry developed rapidly while the proportion of PVC tubing declined. The downstream demand declined with the development area of real estate, leading to declining output volume of the profile industry. In China, the profile industry is intense in enterprise competition and low in requirements on raw materials so calcium carbide method PVC is widely applied at present. In contrast, major downstream users of ethylene method PVC concentrated in high-end sheet materials especially in fields such as medical treatment, food packaging, electric and artificial leathers with relatively stable demand.

According to CRI, as an energy-intensive industry, the sustainable development of the PVC industry is subjected to prices of energy and raw materials, the development of the chlor-alkali industry and petrochemical industry as well as environment protection policies in China. In recent years, the development and distribution of PVC manufacturers expanded to raw material concentrated areas, and the production capacity transferred from eastern regions with high costs to central and western regions with lower costs. With the increasingly mature production processes and local government support, the production capacity of PVC expanded rapidly from 2003 and experienced gradual saturation from 2005. The overcapacity deteriorated from 2008 with slump growth rate of production capacity. Under the promotion of "Government Investment Project of CNY 4 Trillion", the new production capacity of PVC remained large from 2008 to 2012. According to CRI, the production capacity of PVC exceeded 25 million tons in China by the end of 2014. Chinese government implemented policies to phase out outdated capacity in 2015, leading to slight decline of PVC production capacity.

In the early 2015, the international crude oil dropped sharply, and PVC prices declined to the lowest compared to that of 2008 accordingly in China. The PVC market experienced rebound for three months from March to May in 2015. Up to the middle May, the average price of East China SG-5 rebounded to 5,920 CNY/ton increasing by 970 CNY/ton compared to the early 2015 due to the demand recovery, high prices of calcium carbide as major raw materials and declining supply of centralized maintenance of PVC enterprises. With the slump economic situation, demand and declining crude oil prices, PVC prices presented a trend of sharp decline from the middle May up to the end of 2015, breaking the record as the lowest for many consecutive years by average price.