PVC Exports Hit A Record High!

Mar 03, 2023

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Introduction

Domestic demand for PVC in China is weakened; Affected by weak overseas supply and strong demand, China’s PVC export increased significantly in 2022, reaching 1.966 million tons, a record high. Looking forward to 2023, China’s PVC exports may fall back due to the increase in domestic demand and weak demand at the competitive end.

China’s PVC powder industry has shown a rapid development trend in recent years, with a relatively complete PVC industry chain.

The quality and price of PVC powder have been recognized in India, Vietnam, Bangladesh and other countries, and trade cooperation has been established. At present, China is a major exporter of PVC in the world. The export volume increased significantly in 2021 and 2022, and reached a record high of 1.966 million tons in 2022. China’s PVC export growth is mainly affected by two aspects. First, the domestic real estate industry is sluggish and domestic demand is weak, and supply exceeds demand. Enterprises actively seek export channels. Second, the policy liberalization of India as a major demand country has promoted the export of PVC in China.

The weak domestic demand brought by the real estate recession has promoted the export of PVC

About 60% of PVC downstream in China is used in real estate building materials, such as pipes, doors and windows. In 2021, with the adjustment of real estate policies and the impact of health events, China’s real estate investment foam will be removed, and the real estate market transactions will significantly cool down. According to the statistics of Zhuochuang Information, the demand for PVC will decrease by 0.99% in 2021.

The domestic surplus production will lead enterprises to actively seek sales channels, and exports will significantly increase. The domestic real estate market will further weaken in 2022. In 2022, the new construction area of real estate development enterprises will be 1205.87 million square meters, down 39.4%. The cumulative completed area decreased by 15% year-on-year. Affected by this, the demand for PVC shrank. According to the statistics of Zhuochuang Information, the demand for PVC decreased by 4.9% year-on-year to 19761300 tons in 2022. The sluggish domestic demand, to a certain extent, encourages enterprises to seek export channels, thus driving the growth of export volume.

Strong overseas demand side promotes PVC export

From the perspective of overseas demand, India, as a large agricultural country, its main PVC demand comes from agricultural pipeline demand, accounting for 66% of the total demand. However, its PVC production capacity is far lower than the total demand, and it is highly dependent on overseas imports. In August 2016, the Ministry of Commerce and Industry of India imposed anti-dumping duties on Chinese PVC and other products, which seriously hindered the export of Chinese PVC film products. On January 31, 2022, the antidumping policy of the Ministry of Commerce and Industry of India on China’s PVC expired, and the cancellation of the antidumping tax enhanced the advantages of China’s PVC exporting countries, which was reflected in the data level. In 2022, PVC exported to India accounted for 29.63% of China’s exports, with a month-on-month increase of 12.3%.

Looking forward to the future, China’s PVC exports may fall, but the degree of decline is limited