Commissioning of Ethylene-Based PVC Units is Delayed
Introduction: The delayed commissioning of some new ethylene-based PVC units has temporarily eased supply pressure in Q2, but a concentrated commissioning of new capacity may hit in Q3. Given that autumn maintenance scales are typically smaller than spring turnarounds, supply pressure is expected to intensify in Q3 compared to Q2.
As of May 2025, China’s PVC powder capacity reached 28,570kt/a, up 2,870kt or 11.17% from 2020. 3,000kt/a PVC capacity is planned to come online in 2025, which may intensify supply pressure. From January to May 2025, 800kt/a of PVC units have been put into operation, including 500kt/a ethylene-based PVC unit at SP Chemicals and 300kt/a calcium carbide-based PVC unit at Shaanxi Jintai Chemical.
2,200kt/a units are planned to come online in H2 2025, with 1,700kt/a units expected in June-July. However, due to declining PVC prices and widening losses, some producers have postponed the unit startup.
Since H2 2022, the PVC powder market has gradually shifted into oversupply, with prices reflecting the supply-demand balance. For example, as of May 8, 2025, the mainstream SG-5 ex-works price in Changzhou (East China) was RMB 4,680/mt, down RMB 1,186/mt YoY.
2025-2029 Planned PVC Powder Capacity Expansion
Profits from producing PVC powder by different processes showed various trends.
Remarks: Chlorine gas costs are factored into calculations below.
Profits at PVC producers who purchase VCM were decent, with losses occurring only sporadically in recent two years.
Profits at PVC producers who are matched with calcium carbide plants in Inner Mongolia face moderate losses. Falling coal prices dragged down semi-coke prices constantly, so the costs of calcium carbide dropped. Most Inner Mongolian PVC producers are matched with captive calcium carbide units, keeping costs manageable.
Heavy losses are seen in PVC producers who purchase calcium carbide and who use imported ethylene. In contrast, producers with self-supplied ethylene, including SP Chemicals, Wanhua Chemical (Yantai), and Shandong Hengtong (coal-to-ethylene), face lower cost pressure.
Below are profits across different production processes and ethylene sources:
Profits from Producing PVC Powder by Different Processes in Apr 2025
Profits from Producing Ethylene by Different Processes in Apr 2025
Overall, although the delay in the commissioning of some new ethylene-based units has temporarily alleviated supply pressure in the second quarter, the adjusted startup plans indicate a concentrated release period in the third quarter. Considering that the scale of autumn maintenance is typically smaller than that in spring, if PVC producers do not schedule additional maintenance, supply pressure in the third quarter is expected to increase significantly compared to the second quarter.
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