English
Breaking new records, Polyvinyl Chloride output is skyrocketing!
Created on 08.21
In recent years, China's PVC production capacity has expanded rapidly, with output continuing to grow. From January to May 2025, the cumulative domestic PVC output exceeded 10.0168 million tons, achieving a historic breakthrough of surpassing the 10-million-ton mark. The steady growth in output is closely related to the continuous growth trend of PVC production capacity in recent years. In the first half of 2025, Xupu Chemical (500,000 tons) and Shaanxi Jintai (300,000 tons) put their plants into operation as scheduled, while other plants were either delayed or started trial production in the second half of the year. According to preliminary statistics, Tianjin Bohua's 400,000-ton/year plant will be put into operation in July, Fujian Wanhua's 500,000-ton/year plant will start mass production in July, and Haiwan Chemical also plans to put its 200,000-ton/year plant into operation in July. In addition, Jiahua's 300,000-ton/year plant and Gansu Yaowang's 300,000-ton/year plant are planned to be delayed until the second half of the year for trial operation at an appropriate time. On the basis of the historically high production capacity, there will still be more than one million tons of new plants put into operation in the second half of the year, which will undoubtedly bring a huge increase in output for the second half. With such a huge production capacity base, what will the trend of the PVC market be in the second half of the year? Let's take a brief look at the fundamentals!
Calcium carbide prices fall, cost support weakens
Since June, calcium carbide prices have continued to decline. Coupled with the downward trend of coal prices, which has reduced the power costs of self-owned power plant enterprises, the production cost of PVC has moved downward. At the same time, the rebound in caustic soda prices has driven the recovery of the comprehensive profits of chlor-alkali enterprises. Enterprises have weakened the independent cost constraints of PVC through the strategy of "compensating chlorine with alkali".
Capacity expansion, high inventory levels, and unabated supply pressure
In 2025, the polyvinyl chloride industry is still in a period of rapid capacity expansion, with the planned annual new capacity reaching 2.9 million tons. In the second half of the year, there are still about 1.7 million tons of capacity to be released, and the supply side of the industry will continue to increase. Although it is currently in the traditional maintenance season, the operating rate of the industry remains at a high level of about 72%. In addition, after the maintenance season ends in June, the operating rate is expected to rebound rapidly to the annual peak, further releasing supply elasticity. At the same time, weak demand has led to slow inventory digestion, and inventories have continued to accumulate at high levels, resulting in increasing supply pressure.
Weak real estate industry hinders PVC demand
From January to April 2025, real estate development investment fell by 10.3% year-on-year, and the decline in new construction area reached 23.8%. The continuous bottoming of the real estate industry has dragged down the core demand for PVC. There is an obvious lag in the transmission of policy stimulus to end products. The tight capital chain of real estate enterprises has led to slow project construction progress, and downstream product enterprises such as pipes and profiles have weak orders. The average operating rate of the industry is only maintained at a low range of 40%-50%. Weak end demand coupled with slow inventory digestion, the PVC industry chain is facing the structural contradiction of "upstream capacity expansion and downstream volume reduction".
Comprehensively, the current PVC market is affected by multiple negative factors, and the weak pattern will continue in the short term. In the medium and long term, the oversupply situation in the fundamentals of PVC will still intensify. New capacity will be concentrated in the third quarter. Domestic demand is hardly optimistic. Although there are still certain opportunities for exports, they cannot reverse the fundamental contradictions. The macro environment is expected to be weak, and the U.S. economy is facing the risk of stagflation. It is necessary to pay attention to whether subsequent loose policies can bring a phased boost to the macro economy. Overall, it is expected that the macro and fundamental expectations of the PVC market in the second half of the year will be poor, and it may maintain a weak volatility.
Contact
Leave your information and we will contact you.