China PVC Powder Capacity Change
From 2019 to 2023, the capacity of PVC powder steadily increased, with the growth rate slowing down in 2021 and 2022, and the capacity increase in 2023 being the fastest in the past five years. The capacity growth was partly due to the high profitability of the industry before 2021, which led to a high enthusiasm for expansion. On the other hand, with the expansion of China’s large-sized ethylene units in recent years, the matched capacity for ethylene-based PVC powder increased. From 2021 to 2022, the commissioning of some PVC powder units was postponed. In 2023, the new capacity was released intensively, making the capacity growth rate the fastest in the past five years. At the end of 2023, China’s PVC powder capacity reached 27,820kt/a, with an increase of 5.3% Y-O-Y. The net increment in capacity for 2023 was 1,400kt/a. There was 1,700kt/a newly added capacity, while 350kt/a capacity was eliminated. The 100kt/a capacity at Changzhi Huojia Industry was technically transformed to produce PVDC, and the 100kt/a unit at Henan Shenma Chlor-Alkali Development was eliminated. The 100kt/a unit at Yangquan Coal Industry Group Xiyang Chlor-Alkali Chemical Industry and the 50kt/a unit at Wuhu Ronghui Chemical were eliminated. Capacity data at Sinopec Qilu Petrochemical, Anhui Huasu Corporation and Yunnan Provincial Energy Investment Group was corrected.
China PVC Powder Capacity Concentration Ratio Analysis
By the end of 2023, there are 68 PVC powder producers in China. Producers with large-scale units are limited, while most are with small and medium-sized units. Among them, the capacity of the top 10 producers inched down and accounted for 38.79%, still indicating a high capacity concentration ratio, and units will gradually develop towards the direction of large-scale. Producers with large-scale units have a greater discourse power, and their unit maintenance and changes have a greater impact on the mentality of market participants.
From the perspective of the regional concentration of PVC powder capacity in China, it had no large change in 2023, and the capacity was still concentrated in the three major production areas of Northwest China, North China, and East China, with a total capacity of 23,650kt/a, accounting for 85.01% of China’s total. Specifically, the newly added capacity in 2023 was mainly in North China, East China, and South China. PVC powder capacity in coastal regions increased, mainly because coastal regions are convenient for serving domestic and foreign trade markets. However, the capacity in Northwest China still accounted for the largest proportion, mainly because local producers have obvious scale advantages, and there are many leading enterprises. Meanwhile, Northwest China is not only the main production area of PVC powder but also the main production area of feedstock calcium carbide. Most enterprises have supporting calcium carbide units, so their advantages of cost and feedstock supply stability are obvious.
China PVC Powder Capacity Analysis by Production Technology
For foreign PVC powder producers, PVC powder is produced via the ethylene method. The upstream feedstock is traced back to crude oil and shale gas, mainly because crude oil and shale gas resources are abundant in the overseas market.
As China is abundant in coal resources and lacks gas resources, China’s PVC powder producers mainly adopt the calcium carbide method. However, in recent years, with stricter approval of new projects of PVC powder produced via the calcium carbide method, the newly added capacity of calcium carbide-based PVC powder was limited, while more ethylene-based PVC powder enterprises expanded their capacity. Therefore, the proportion of ethylene-based PVC powder capacity increased year by year. In 2023, the net increment in the carbide-based PVC powder capacity was 190kt/a, and the carbide-based PVC powder capacity accounted for 74.91% of the total, down 3.25 percentage points from 2022. The newly added capacity of ethylene-based PVC powder was 1,210kt/a, with the proportion rising to 25.09%, up 3.25 percentage points Y-O-Y.
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