Asia Pacific Polyvinyl Chloride (PVC) Market Analysis, By Demand, By Types, By Applications and Forecast Report Till 2032

Asia Pacific Polyvinyl Chloride (PVC)

Polyvinyl chloride (PVC) is a polymer that is derived from vinyl chloride monomer (VCM). The production of PVC involves different methods such as suspension polymerization, emulsion polymerization, or bulk polymerization. Among these methods, suspension polymerization is widely preferred in Asia. After polymerization, PVC requires the addition of various additives before it can be transformed into different products, regardless of whether it is in rigid or flexible form.

In Asia, PVC can be manufactured using two main feedstocks: ethylene or calcium carbide. The PVC produced from calcium carbide is also known as acetylene-based PVC, as acetylene is an intermediate produced from calcium carbide. The PVC industry in China stands out as most of its plants primarily produce carbide-based PVC, which differentiates it from other countries where ethylene-based PVC is predominantly manufactured. This distinction can be attributed to the abundant availability of coal in China, which serves as a key raw material for the production of calcium carbide.

In the Asian market, PVC is extensively used in two main forms: rigid and flexible resins. Rigid PVC finds widespread use in the production of pipes, door profiles, windows, roof tiles, conduits and automotive components. On the other hand, flexible PVC, which contains plasticizers, is commonly used for applications such as electrical insulators. The construction sector accounts for approximately half of the overall demand for PVC in Asia.

Asia Pacific Polyvinyl Chloride (PVC) Demand-Supply

China holds the position of being the largest consumer and producer of PVC not only in Asia but globally as well. With an annual PVC capacity of over 26,000 kilotons, China's apparent demand was approximately about 20,000 kilotons, according to Prismane Consulting’s Demand and Supply Database, indicating an excess capacity of around 6,000 kilotons.

The rapid spread of the coronavirus pandemic in the first half of 2020 resulted in an unprecedented decline in PVC demand as governments implemented nationwide lockdowns, leading to restrictions on movement and economic activities.

China was among the first countries to recover from the pandemic, witnessing improvements in downstream manufacturing activities as early as April 2021. This enabled buyers within the country to import substantial volumes in the second quarter of 2020, while many other countries still faced reduced downstream activities and complications due to the ongoing pandemic and lockdown measures.

Revival in China's domestic construction sector has been facilitated by government stimulus packages. As restrictions outside of China have gradually eased, Asia is expected to experience tight spot availability due to an ongoing month-long turnaround by a northeast Asian producer in August and limited deep-sea availability from the United States. The supply of deep-sea PVC material to Asia has been constrained since July, as the domestic demand in the US construction sector began to recover.

Further tight US export volumes in 2020 & 2021 following force majeure declarations by Westlake Chemical in early September and Formosa USA in mid-August 2020. However, close to three months of force majeure, Westlake Chemical lifted the restrictions of its PVC and feedstock vinyl monomer plant in 2021. Due to the demand-supply imbalance, the prices skyrocketed in 2021 and 2022.

Polyvinyl Chloride Prices

In early 2020, as the coronavirus rapidly spread, PVC prices in Asia experienced a significant decline starting in March and reached their lowest point in early April. The prices observed during this period had not been seen since the global financial crisis in 2008.

However, as lockdown measures in Asia began to ease in the middle of 2020, PVC prices started to rise again.

It is important to note that India serves as the largest export destination in northeast Asia, and its demand, market fundamentals, and sentiment greatly influence prices and sentiments across the entire Asia Pacific region.

PVC shipments from Japan and Southeast Asia to India benefit from lower import duties, with rates of 0.7% and 5%, respectively, due to existing free trade agreements.

Despite India being in the midst of its monsoon season, the restocking activity is expected to continue as inventories at pipe facilities in the country have remained low.