China PVC Prices Rose amid Upgrade of Anti-Involution
Introduction: Recently, with strong macro sentiment, the assessment of old equipment in the petrochemical and chemical industry has become a hot topic in market transactions, leading to a rise in PVC prices. However, China’s PVC market fundamentals remained weak, and no significant signs of improvement have been seen in the long-term fundamentals. Going forward, whether there is further promotion on the policy front needs to be paid attention to.
Recently, the assessment of old equipment in the petrochemical and chemical industry has become a hot topic in market transactions. The assessment notice was jointly issued by five ministries, including the Ministry of Industry and Information Technology. According to the notice from the state ministries, equipment in the petrochemical and chemical industry that has reached the designed service life or has been in operation for more than 20 years is classified as old equipment, whereas the previous general standard was 30 years. This was widely spread after the market closed on July 18, followed by a significant rise in commodity futures. As of the close on July 21, the Wenhua Commodity Index saw an intraday maximum increase of nearly 2%. Driven by this sentiment, PVC futures also rose.
The reason why this incident triggered a rapid market rise is that it was regarded by the market as a further upgrade of the anti-involution drive. The context of anti-involution is summarized as follows:
July 2024 Politburo meeting: First proposed preventing involutionary competition.
December 2024 Central Economic Work Conference: Upgraded to comprehensively governing involutionary competition.
Since mid-May 2025, party media such as People’s Daily and Qiushi have intensively published articles related to anti-involution.
June 23, 2025: General Office of the Ministry of Industry and Information Technology, General Office of the National Development and Reform Commission, General Office of the Ministry of Ecology and Environment, General Office of the Ministry of Emergency Management, and General Office of the State-owned Assets Supervision and Administration Commission jointly issued the Notice on Carrying Out the Assessment of Old Equipment in the Petrochemical and Chemical Industry (Gongxin Ting Lian Yuan Han [2025] No. 254).
July 2025 Central Financial and Economic Commission's Sixth Meeting clearly required governing low-price disorderly competition and promoting the withdrawal of backward production capacity.
July 16-17, 2025: Hunan, Shandong, and other regions successively forwarded the notice on the assessment of old equipment issued by the five ministries on June 23 and arranged for implementation.
July 18, 2025: Xie Shaofeng, Chief Engineer of the Ministry of Industry and Information Technology, mentioned that work plans for stabilizing growth in ten key industries, including steel, non-ferrous metals, and petrochemicals, are about to be introduced. The Ministry of Industry and Information Technology will promote key industries to focus on adjusting structures, optimizing supply, and eliminating backward production capacity.
It can be seen that although this incident attracted significant market attention on July 18, the traced policy is the notice from the five ministries on June 23, which is in line with the recent anti-involution policies and forms a resonance. What impact does this policy have on the PVC industry?
Commissioning Time of PVC Units
The identification of old equipment by the five ministries mainly refers to equipment that has been in operation for more than 20 years. SCI has sorted out and surveyed the current operational status of PVC units.
As of May 30, 2025, PVC units that have been in operation for more than 20 years amount to 2,180kt/a, accounting for 7.63% of the total current capacity. Among these, 250kt/a units are in a long-term shutdown state.
In addition, among the PVC units within a service life of less than 20 years, 1,600kt/a units are in long-term shutdown. These units may restart at any time if the PVC industry profits recover.
The Impact on PVC Fundamentals Is Relatively Limited
From the current information, the notice of the five ministries on the assessment of old petrochemical and chemical equipment has a relatively limited impact on the fundamentals of the PVC industry. This is mainly reflected in the following four aspects:
1.Even if identified as old equipment, the opinions in the current notice of the five ministries only involve renovation and upgrading.
2.Only 2,180kt/a of PVC units meet the criteria for old equipment, among which 250kt/a units are in a shutdown state. The actual operating equipment that has been in use for more than 20 years is 1,930kt/a.
3.There may be certain disputes in the identification process of old units. PVC producers have continuously upgraded and transformed long-term operating equipment, and the final assessed capacity will be announced by the official.
4.There are 1,600kt/a of long-term shutdown units with a service life of less than 20 years, which may resume production at any time if PVC profits recover.
Overall, the recent trend of the PVC market is more affected by macro sentiment. The short-term fundamentals have not improved at all; on the contrary, the PVC inventory has continued to rise, warehouse receipts have gradually increased, and delivery storage capacity has once again become tight. In the long run, the fundamentals also lack obvious improvement expectations. However, the macro atmosphere has been strong since the second half of 2025, and related products such as coking coal and coke have risen rapidly. Going forward, it needs to continue to pay attention to whether there is further policy promotion on the macro front.
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