China PVC Capacity Utilization Rate Likely to Decline
Preface: In the next three years, the growth rate of China PVC powder may remain high. The capacity utilization rate of existing units is likely to be squeezed amid oversupply and the commissioning of newly added units.
The PVC powder market will possibly stay capacity expansion cycle in the next three years.
The PVC powder market will possibly register a capacity expansion cycle from 2023 to 2026. The capacity growth rate in 2023 is estimated to be 6.81%. The capacity growth rate in 2024, 2025, and 2026 will probably be 5.6%, 4.87%, and 3.52% respectively. Therein, the increment in the ethylene-based PVC powder units is notable. After newly added calcium carbide-based PVC units are put into operation, the increment in the calcium carbide-based PVC units may decline significantly in the long term, and the unit proportion of the mercury-free process may increase.
The capacity utilization rate of existing units is likely to be squeezed with the commissioning of newly added units.
The capacity utilization rate of PVC powder was 84.07% in 2021, reaching a record high. The main reasons were as follows. First, China’s PVC powder export volume surged due to the unplanned shutdown of foreign units. Second, China’s domestic consumption was fairish. Thus, PVC producers held operating rates relatively high in 2021. However, in 2022, the PVC powder market price declined. Some units ran unstably due to profit losses and accidental incidents, so the PVC powder output and capacity utilization rate saw a Y-O-Y drop. In 2023, the PVC powder output may rise, but the capacity utilization rate is expected to dip. Newly added units came on stream, propping up the output. However, PVC powder prices hovered at lows amid soft demand. PVC producers cut operating rates or shut units down for maintenance due to profit losses.
In the next three years, the increment in the PVC powder downstream demand is expected to be limited. The capacity utilization rate may shrink constantly amid capacity expansion. Calcium carbide supply, excess oversupply, and profit losses will possibly restrict the PVC powder industrial operating rate. A couple of existing capacity may be replaced by newly added capacity so that excess capacity may register to rebalance.
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