PVC Global Competitive Landscape Analysis
Introduction: In recent years, the oversupply of China’s PVC market has been worsening, and exports have become a key solution to address the excess supply. China’s PVC exports hold a certain price advantage, with export volume growing rapidly. While exports are expected to maintain an upward trend in the future, they will also be affected by policies periodically.
Exports serve as a crucial way to resolve the oversupply in China’s PVC market. Over the past five years, China’s PVC exports have seen rapid growth, as PVC producers have actively participated in international competition.
In the global PVC trade pattern, the net outflow regions are the United States, Northeast Asia, and Western Europe. Driven by the fast-growing export volume, China is expected to become the world’s largest PVC exporter by 2025.
The PVC industry in Western Europe has relatively weak overall competitiveness. Firstly, costs remain high - electricity costs in Western Europe are over RMB 1 per kWh when converted into RMB. Additionally, 90% of Europe’s ethylene needs to be imported, making it the most expensive globally. Secondly, Western Europe has a large number of aging PVC units, leading to high maintenance costs and a long-term low capacity utilization rate of 60%-70%. Thirdly, stricter environmental protection policies in Europe, such as the REACH Regulation and Industrial Emission Directive, have further increased production costs. Currently, the chlor-alkali industry in Europe has begun to enter a phase of successive shutdowns.
The PVC industry in the United States enjoys relatively strong cost advantages. On one hand, ethylene costs are low: the main feedstock for U.S. ethylene is ethane, a by-product generated in large quantities during shale gas extraction. This makes ethane the primary feedstock for U.S. ethylene, keeping ethylene costs at a global low and indirectly lowering PVC costs. On the other hand, electricity costs in the United States are also relatively low. The U.S. has long been the world’s largest PVC exporter, but its export volume may be surpassed by China by 2025.
In recent years, China’s PVC export volume has grown rapidly, and it is expected to overtake the United States as the world’s largest PVC exporter by 2025. China’s PVC production is dominated by the calcium carbide method. Leveraging its coal resource advantages, China maintains relatively low feedstock costs. Moreover, China has abundant power resources, with electricity prices also at a relatively low level globally. Additionally, China’s PVC industry has faced severe oversupply in recent years; PVC producers rely on profits from producing caustic soda to offset losses from producing PVC, and the long-term loss-making sales of PVC have further strengthened China’s competitive edge in PVC exports.
In terms of quality, China’s calcium carbide-based PVC is slightly inferior to overseas ethylene-based PVC, but its price advantage fully offsets this quality gap. Furthermore, India’s anti-dumping measures against PVC are about to take effect. According to the anti-dumping arbitration results, China will face the highest anti-dumping duties, which will have a certain impact on China’s future PVC exports and may reshape the direction of its export flows.
Overall, relying on its cost and price advantages, China’s PVC resources will continue to occupy a crucial position in the global PVC competitive landscape in the future. With the gradual withdrawal of European enterprises, Ukraine’s post-war reconstruction, and the steady growth of global demand, China’s PVC exports will continue to increase. However, affected by the potential implementation of India’s anti-dumping measures, there may be certain changes in the direction of its exports.
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