China PVC Powder Exports Reach a Record High in 2023
Preface: In 2023, China’s PVC powder export volume increased constantly. China’s PVC producers were active in promoting sales to make up for China’s domestic consumption shortage. Demand from India and Southeast Asia was passable. In 2024, China’s PVC powder exports may remain high amid price advantages and fairish international demand.
PVC powder exports are expected to reach a record high in 2023.
SCI reckons that the PVC powder export volume will possibly be 2,257.8kt in 2023, up 14.86% Y-O-Y, reaching a record high. From 2019 to 2023, the PVC powder export volume increased constantly, especially after 2021, the export volume increased significantly compared with the past. The export volume rose rapidly from 2021 to 2023 mainly due to the following reasons. First, the PVC powder supply in the U.S. shrank notably affected by extreme weather in 2021 and 2022. Second, on January 31, 2022, India’s anti-dumping policy against China’s PVC powder officially expired, and the domestic PVC powder exports to India increased significantly. Third, China’s domestic PVC powder exports had a more obvious price advantage. In 2022 and 2023, China’s PVC powder prices hovered at lows due to oversupply.
China’s PVC powder export volume in 2023 shows an upward trend. According to GACC, China’s PVC powder exports reached 1,907.8kt from January to October 2022, up 8.68% Y-O-Y. There are three waves of export order increases during this year. From the end-2022 to January 2023, backed by bullish expectations for China’s economic growth and the slowdown of the Fed’s interest rate hike, China’s PVC powder rebounded, stimulating foreign buyers’ purchasing. In July and August, as intensive unit maintenance in the U.S. and Formosa Plastics dragged down the global supply, China’s exports ushered in the opportunity. In late October, with India and other overseas inventories being digested, a new round of procurement cycle was released, propping up China’s PVC powder export volume. The increment in export volume eased the market supply pressure to some extent and also became a major variable in the market price changes.
China’s PVC powder producers were active in promoting exports and India, and other developing countries showed higher demand, so China’s PVC powder export volume increased in recent years.
PVC powder producers were active in promoting exports under oversupply pressure.
In recent years, China’s PVC powder prices dropped affected by oversupply, benefiting exports. From 2019 to 2023, China’s PVC powder fundamentals turned oversupply from a tight balance. From 2019 to 2021, the supply and demand of PVC powder were in a tight balance, but from 2022 to 2023, the PVC powder market saw an oversupply due to decreased demand. About 60% of the downstream demand for PVC powder is related to the real estate industry. With the real estate market weakening, the real estate industry-related demand shrank accordingly. In addition, the intensive release of new capacity in 2023 exacerbated the oversupply, weighing on the PVC powder market. In 2023, China’s PVC powder market hovered at RMB 5,600-6,500/mt, reaching a record low. China’s PVC powder producers were active in promoting exports.
Overseas developing countries increased capital expenditure and increased demand for base materials.
In recent years, overseas developing countries increased capital expenditure, propping up the demand for base materials. The export volume of some base materials saw a notable increment. Overseas developing countries especially India have shown a significant increase in the import of PVC powder from China, and this trend is expected to continue in the future.
2018-2023 China PVC Powder Main Export Destinations
Source: GACC
In 2024, China’s PVC powder industry is expected to see oversupply, while the demand growth rate in overseas developing countries may be passable, so SCI reckons that the PVC powder export volume will likely climb further.
In 2024, PVC powder supply pressure will possibly stay high. First, the existing capacity is high. Second, 1,600kt/a new units are planned to come online in 2024. Third, China’s domestic PVC powder consumption may be in the doldrums. Therefore, excessive supply is likely to weigh on the PVC powder market, which may give wings to exports.
There are bullish expectations for the demand increase in overseas developing countries. From 2021 overseas developing countries imported more base materials from China affected by higher capital expenditure. Capital expenditure in overseas developing countries is expected to ramp up, so the demand for China’s base materials, including PVC, will likely be relatively passable in the future.
On the whole, it is estimated that China’s PVC powder export volume will possibly increase further in 2024. However, the demand from the U.S. may decline, which will likely influence the international PVC powder market. India’s trade policy on China’s PVC powder should also be noticed.
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