Chinese PVC market awaits capacity boost in 2018-2020

In the remainder of this year and the next two years, China is planning to add around 4.75 million tons of PVC to its domestic production capacity. On top of around 400,000 tons/year of new capacity that was started up earlier this year, three more new facilities are due to come online in December.

3 plants already started up, 3 more to come in 2018

Earlier this year, Shandong Xinfa and Shandong YuShe started up their new carbide-based PVC units with respective capacities of 50,000 tons/year and 100,000 tons/year. Shandong Rui Hen’s 200,000 tons/year also came online by the beginning of 2018 and the producer’s other 200,000 tons/year unit is scheduled for start-up in December.

Among the other plants scheduled to come on stream this year are the two PVC plants of Shaanxi Beiyuan and Shandong Lutai Chemical. The units will be able to produce a total of 250,000 tons/year of PVC by December.

11 new start-ups planned for 2019 and 4 more for 2020

For 2019, sources reported the anticipated start-up of eleven new carbide and ethylene-based PVC units. The new wave expansion is expected to boost the country’s production capacity by almost 2.15 million tons/year.

The new carbide-based PVC facilities include Hebei Shenghua’s 200,000 tons/year unit, Anhui Hua Su’s 160,000 tons/year unit, Dezhou Shihua’s 200,000 tons/year unit, Ningxia Jing Yu Yan’s 200,000 tons/year unit, Zhong Yan Ji Lan Tai’s 160,000 tons/year unit, Tangshan Shanyou’s 20,000 tons/year unit, and Xinjiang Zhongtai’s two units with a total production capacity of 260,000 tons/year.

As for the new ethylene-based facilities, Ju Long Petrochemical, Qingdao Haijing, and Taizhou Liancheng will start up their units in the first half of 2019. The three facilities will have a total capacity of around 950,000 tons/year of ethylene-based PVC.

Moving into 2020, Wu Hai Zhong Lian and Jin Hui Zhao Feng are planning two carbide-based PVC units with nameplate capacities of 500,000 tons/year each. Pi Er Duo Shi’s 400,000 tons/year ethylene-based unit and Yan Tai Wan’s carbide-based unit with the same capacity are also due for start-up in 2020.

When China becomes net exporter, will pressure on global PVC prices increase?

Once completed, these capacities will move China into a net exporter. The country has already reduced its heavy dependence on imports since 2012; however, it was still the second largest importer of PVC in the world in 2017 with its total imports nearing the threshold of 1 million tons, according to data from International Trade Centre. Along with these new capacities coming on stream, the surplus of Chinese PVC is likely to look for destinations in export outlets more aggressively in the coming years.

Are there bumps in the road?

However, some sources underlined that China’s increasing pressure on carbide-based PVC production amid stricter environmental inspections may cause delays in the planned start-up of these new capacities.

In addition, others are pointing to the increasing demand for recycled materials instead of virgin polymers. This will be an important factor to watch while proceeding with these new capacities in the midst of the growing trade barriers.