Introduction: In the
past five years, China’s PVC paste market fundamentals shifted to oversupply
gradually. In 2024, both supply and demand remained decent. In the next five
years, the oversupply may intensify, weighing on the PVC paste market price.
In the
past five years, the supply-demand structure of China’s PVC paste market
changed constantly.
In 2020,
affected by the emergency, the demand for glove materials surged, leading to a
notable increase in PVC paste demand. Thus, China’s PVC paste market saw a
tight balance most of the time and saw the supply falling short of demand in
some months. In 2021, some newly added units were put into operation, while the
demand for glove materials weakened. From Q3 2021, operating rates of end
industries underperformed. PVC paste demand failed to increase in the
traditional peak season, and China’s PVC paste market began to see an
oversupply. From 2022 to 2023, China’s domestic consumption was soft, and the
supply pressure persisted, intensifying the mismatch between supply and demand.
In 2024, China’s PVC paste supply rose notably, while the demand from
downstream industries increased. Both supply and demand remained decent.
In 2024,
China’s PVC paste industrial operating rate remained high, propping up the
output. In addition, the demand from glove product industries went up, and the
demand for general materials also moved up. In Q1, downstream enterprises
actively stockpiled before the Chinese New Year holiday. After the holiday, the
producer inventory piled up as the digestion pace of feedstock inventory was
slow. From Q2 to early Q3, intensive PVC paste unit maintenance dragged down
the operating rate, while the demand from glove product industries went up. In
Q3, the demand was tepid. The hot and rainy weather in summer affected the
operations of downstream enterprises in southern China. In addition, with the
restart of PVC paste units, the market supply gained, so the supply pressure
warmed up. In Q4, the PVC paste industrial operating rate remained high, while
downstream demand was fairish, so the supply-demand mismatch was not obvious.
2020-2024 China PVC Paste Supply-Demand Balance Data
Unit: kt
|
2020
|
2021
|
2022
|
2023
|
2024
|
Capacity
|
1,425.0
|
1,535.0
|
1,535.0
|
1,495.0
|
1,505.0
|
Output
|
1,066.6
|
1,043.9
|
1027.6
|
1,069.6
|
1,195.0
|
Operating
rate
|
74.85%
|
68.01%
|
66.94%
|
71.55%
|
79.40%
|
Import
volume
|
128.6
|
84.6
|
77.8
|
78.2
|
106.9
|
Export volume
|
24.6
|
77.1
|
105.9
|
146.3
|
108.2
|
Apparent
consumption volume
|
1,170.6
|
1,051.4
|
999.5
|
1,001.1
|
1,193.7
|
Balance
ratio
|
21.73%
|
46.00%
|
53.58%
|
49.28%
|
26.08%
|
Source: GACC, SCI
The
oversupply in China’s PVC paste market may intensify in the next five years.
Capacity
and output forecast: In Q4 2025, 160kt/a PVC paste capacity is
expected to come online. The commissioning of new capacity may be late, which
may give limited support to the annual output. In 2026, newly added capacity
will possibly strengthen the supply pressure. From 2027 to 2029, some outdated
capacity may be eliminated.
Import and
export forecast: Overseas fundamentals and policy changes may influence import
and export data. In 2025, the demand for imported glove materials and high-end general
materials may be decent. However, with the commissioning of new capacity, the oversupply
in the PVC paste market will likely strengthen. Thus, the import dependence
degree will likely move down. As for exports, producers will actively promote
exports to ease supply pressure. With the diversification of export trading
partners, the export volume may remain at a high level.
Consumption
volume forecast: PVC paste downstream enterprises may show different
trends. The foreign demand for PVC glove products can hardly surge and remain
stable. The general materials demand from the automotive industry-related industries
such as back painting and interior segments is expected to be steady. The
coating cloth industry will likely increase due to the demand for new product
development. However, the prosperity of the leather industry may decline affected
by the replacement of PU leather and other materials. The proportion of the
wallpaper industry in PVC paste consumption may shrink further due to the
impact of emerging products.
On the whole,
the oversupply of China’s PVC paste market may worsen in the next five years,
which may weigh on the market price. Exports are the key point to easing
domestic supply pressure.