By Guo Hao, China National Chemical Information Center

Producers go towards large scale, industrial concentration degree is high

Capacities of caustic soda and PVC as major products of the chlor-alkali industry in China have made a rapid increase in the past decade, the growth far surpasses the demand growth in downstream sectors and there is a status of oversupply. Under the comprehensive pressure of restructuring, phased-out capacities have started to go up.
   The production of PVC producers in China is going towards large scale. There are 20 PVC producers with a capacity of over 400 kt/a (inclusive) and their capacity accounts for 56.7% of the national total. Three super large enterprises with a capacity of over 1 000 kt/a including Xinjiang Zhongtai Chemical Co., Ltd., Xinjiang Tianye (Group) Co., Ltd. and Shaanxi Beiyuan Chemical (Group) Co., Ltd. and 7 enterprises with a capacity of 500-1 000 kt/a including Tianjin Dagu Chemical Co., Ltd., Inner Mongolia Junzheng Energy & Chemical Group Co., Ltd., Shandong Xinfa Chemical Co., Ltd., Hongda Xingye Group and Inner Mongolia Elion Chemical Industry Co., Ltd. have been formed. With the aggravation of competition and the control on sectors with capacity surplus by the state, the industrial concentration degree will make a further upgrading in future.
   The capacity of PVC in China was 22 820 kt/a in 2017, an increase of 320 kt/a over the previous year. Sixty-two enterprises made production. Table 1 shows the major producers of general-purpose PVC in China in 2017.

Table 1   Major producers of general-purpose PVC in China, 2017

   PVC projects being constructed or planned for construction in China today mainly use the calcium carbide process and the ethylene process as major processes to produce general-purpose PVC. Examples include the 240 kt/a project of Hebei Shenghua Chemical Industry Co., Ltd. that uses the calcium carbide process and the 300 kt/a project of Yantai Wanhua Chemical Group Co., Ltd. that uses the ethylene process. Table 2 shows the general-purpose PVC projects being constructed or planned for construction in China during 2017-2019.

Table 2   General-purpose PVC projects being constructed or planned for construction in China during 2017-2019

Import and export

   For long years in the past the supply of PVC in China had to be maintained through import. With the increase of the supply amount and the upgrading of the product quality, however, the export amount of PVC in China has made an evident increase. From 2014 China turned into a net PVC export country. The import amount of general-purpose PVC in China was 772 kt in 2017, accounting for 4% of the apparent consumption and an increase of 19.1% over the previous year. The export amount was 957 kt, a drop of 7.9% from the previous year. The net export amount was 185 kt.

   General-purpose PVC imported in China in 2017 mainly came from the United States, Taiwan and Japan. The total amount imported from these 3 sources was 688 kt, accounting for 89.1% of the national total. Major regions making the import of general-purpose PVC included Guangdong, Shanghai and Fujian. The total amount imported in these 3 regions was 598 kt, accounting for 77.5% of the national total. The import trade of general-purpose PVC in China was mainly made in the form of processing by imported material. As for general-purpose PVC imported in 2017, the volume of trade made in the form of processing by imported material accounted for 91.6% of the total.

Rigid products determine consumption trend

   The consumption of PVC in China has made a rapid increase in recent years. PVC is mainly used in the construction of infrastructures. Rigid PVC pipes and doors/windows are hot spots for the growth of the PVC consumption. PVC used in doors/windows, in particular, increases at a rate of over 10% each year. PVC used in flexible products increases at an annual rate of 5%.

   The apparent consumption of PVC in China was 17 870 kt in 2017, an increase of 10.31% over the previous year. The consumption structure was around 61% for rigid products and around 39% for flexible products. In the field of rigid products, profiles and doors/windows accounted for 21%, pipes and fittings accounted for 30%, rigid sheets and plates accounted for 5.5% and others accounted for 4.5%. In flexible products, films accounted for 9%, electric cable materials accounted for 6%, artificial leather accounted for 5%, flooring leather accounted for 7%, shoe sole materials accounted for 4% and others accounted for 8%.

Forecast for future supply/demand

   The capacity of general-purpose PVC in China is in an overall status of oversupply today. For a considerable period of time in future the chlor-alkali industry will continue to eliminate small-scale units and readjust the overall industrial structure. It is expected that the capacity will be kept at the present level for a period of time. The capacity of PVC in China will be 24 300 kt/a in 2020 and the operating rate of production units will be around 76%. The average annual growth of the capacity will be 2% during 2017-2020. In terms of demand, due to the slowdown of the economic growth and the cooling down of real estate and chemical sectors the future growth of the PVC demand will come down. It is expected that the average annual growth of the PVC consumption in China will be 1.8% during 2017-2020 and the apparent consumption will be 18 850 kt in 2020.