2020-2024 China PVC Powder Fundamentals Overview
Introduction: From 2020 to 2024, PVC powder supply-demand fundamentals turned from relative balance to oversupply. PVC powder prices saw a notable fluctuation and dropped to a 9-year low from highs. PVC powder supply-demand fundamentals may turn from oversupply to relative balance and enter a new cycle transaction in the following five years.
From 2020 to 2024, PVC powder supply-demand fundamentals turned from relative balance to oversupply, dragging down PVC powder prices. From 2020 to 2021, the supply and demand of PVC powder were in tight balance, but from 2022 to 2024, the PVC powder market saw oversupply due to decreased demand. In 2021, the PVC powder market price was boosted by reduced feedstock supply and PVC output, and Q3 of the year saw prices continuously reaching new historical highs, which was RMB 14,493/mt in October. From H2 2022 to 2024, China’s real estate industry entered an adjustment phase, and the PVC demand from pipe and profile industries slowed down, intensifying the supply-demand mismatch.
2020-2024 China PVC Powder Supply and Demand Balance
In the next five years, after the concentrated commissioning of new PVC powder units, the growth rate of the PVC powder supply may slow down. The oversupply in the PVC powder market may first strengthen and then ease. However, during this transaction phase, the PVC powder market may face supply-demand pressure.
In the next five years, 4,440kt/a units are planned to come online. However, with the supply-demand mismatch intensifying, PVC powder prices may remain low. Some units may be eliminated amid long-term profit losses. Thus, the growth rate of the supply may first rise and then slow down. In 2025, 3,000kt/a units will likely be put into operation.
China’s real estate market mainly consumes existing housing currently, with the main goal being decreasing inventory. The demand related to the real estate market may remain weak. Consumer goods will likely be the main driver for the PVC demand in the short term. However, it will take some time for its proportion to increase, so it is expected that the growth rate of domestic demand will remain at a low level in the future. In addition, exports will be an important method to make up for domestic demand.
In the next five years, the oversupply in the PVC powder market may first strengthen and then ease. In the next two years, inventory pressure may be the key price driver. With the outdated capacity being eliminated, the supply pressure of the PVC powder market may be eased gradually.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
