China PVC Paste Industry Operation Status
Introduction: China’s PVC paste market turned from tight balance to oversupply from 2020 to 2023. In 2024, the industry experienced robust supply and demand growth. However, operational pressures in the future cannot be underestimated.
Overview of the PVC Paste Industry Chain
As for the production method, based on different feedstock, the production methods are divided into the calcium carbide method and the ethylene method in China. Most of China’s PVC paste producers adopt the calcium carbide method influenced by the rich coal resources in China. Some PVC producers have their own calcium carbide plants to produce feedstock, while others purchase calcium carbide externally. Calcium carbide-based PVC paste producers are mainly concentrated in coal-rich regions such as Northwest, Northeast, and North China. The production mostly using outsourced or imported ethylene and VCM is usually called the ethylene method. Ethylene-based PVC paste producers are mainly located in East China, where feedstock transport is more convenient. In 2024, Cnsig Inner Mongolia Chemical Industry expanded its calcium carbide-based PVC paste capacity by 10kt/a, and China’s PVC paste capacity rose to 1,505kt/a, with 965kt/a calcium carbide-based capacity (64.12%) and 540kt/a ethylene-based capacity (35.88%).
PVC paste is widely used in soft material applications due to its excellent pasting and dispersion properties. Its main applications include: coating, dipping, spraying, and foaming processes. It is widely used in artificial leather, decorative materials, flooring leather, wallpapers, industrial conveyor belts, sports flooring, paints, adhesives, toys, medical disposable gloves, daily decorative materials, electrical appliances, and power tools.
Profitability Trends in the PVC Paste Industry
From 2020 to 2024, profitability across the PVC paste industry chain fluctuated significantly. From 2020 to 2021, profits were decent. In 2020, due to force majeure factors, the profit of PVC paste and PVC glove industries increased significantly. Backed by tight feedstock supply, profits from producing calcium carbide in 2021 rose notably. In 2022, demand weakened. Profits from producing PVC paste shrank due to the decrease in downstream orders. In 2023, profitability declined further across upstream, midstream, and downstream sectors. In 2024, calcium carbide prices hovered at lows, while the average price of PVC paste inched up, so the profit improved.
PVC Paste Industrial Chain Gross Profit
Future Adjustments in the PVC Paste Resin Industry
PVC paste demand from downstream enterprises can hardly increase notably in the next few years. PVC glove enterprises may have higher bargaining power over feedstock, as they may exercise stricter cost control over feedstock restricted by demand and costs.
Ongoing weak demand will possibly impact both PVC paste and calcium carbide industries. Newly added PVC paste capacity may intensify the supply-side pressure. The calcium carbide market may see a tug-of-war between supply and demand. Fluctuations in supply and demand dynamics will likely continue to cause frequent price fluctuations. Calcium carbide supply will possibly increase. The PVC industry may weigh on the calcium carbide market. Given these factors, the PVC paste and calcium carbide industries will need to accelerate structural adjustments and optimization to align with market conditions and enhance overall profitability.
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