Fundamental Analysis of the Basic Chemicals Industry—PVC Operational Situation

◼ Approximately one-third of China’s PVC production capacity is concentrated in the Northwest region (as of 2025). Calcium carbide-based PVC relies heavily on energy and raw materials; the Northwest region—including Shaanxi, Qinghai, Gansu, Xinjiang, Inner Mongolia, and Ningxia—leverages its abundant coal resources to offer relatively low electricity costs. Over 90% of chlor-alkali enterprises in the Northwest operate captive power plants, compared with about 70% in North China and 50–55% in Eastern China. Historically, PVC producers primarily purchased calcium carbide externally; however, newly built facilities increasingly adopt an integrated “calcium carbide–chlor-alkali” production model—procuring coal and other raw materials directly and producing calcium carbide in-house to secure internal supply of intermediate materials. Ethylene-based PVC in China is mainly located in the southeast and central regions. With the deepening implementation of China’s dual-carbon strategy and continuously tightening environmental standards, the ethylene-based process—which offers clear environmental advantages—is entering a phase of rapid growth. Moreover, inherent process differences result in lower performance and quality of calcium carbide-based PVC relative to ethylene-based PVC. ◼ In terms of production concentration, China’s PVC industry exhibits relatively fragmented supply. According to data from ZhuoChuang Information, there are 67 PVC producers in China (measured by PVC resin output); as of 2025, the industry’s CR5 stands at 23.8%, comprising Zhongtai Chemical, Xinjiang Tianye, Bohua Chemical, Haiwan Chemical, and Xinfah Group. Overseas Supply: Global Capacity Contraction Amid Rising Cost Pressures and Declining Competitiveness ◼ European capacity faces substantial cost pressures, resulting in low operating rates. The overall competitive advantage of Western Europe’s PVC resin industry remains relatively weak—firstly due to high costs: electricity prices in Western Europe exceed RMB 1 per kWh, and over 90% of ethylene must be imported at high procurement costs. Secondly, many PVC resin facilities in Europe are aging, and capacity utilization has remained at a relatively low level of 60–70% in recent years. As of January 2026, the average utilization rate of chlor-alkali facilities across Europe stood at 65.5%, among the lowest levels in recent years. Furthermore, under mounting pressure from production costs and regulatory burdens, Europe’s chlor-alkali sector has entered a wave of capacity closures. According to Longzhong Consulting, Western Europe’s PVC capacity declined from 8.6 million tons in 2021 to 8.145 million tons in 2025. ◼ The United States enjoys a cost advantage in PVC resin production due to low ethylene costs, making it a net global exporter of PVC resin. On December 15, 2025, Westlake Corporation announced the shutdown of certain PVC resin and vinyl chloride monomer (VCM) production facilities in North America; consequently, U.S. PVC resin capacity decreased from 9.058 million tons to 8.604 million tons—a reduction of 0.454 million tons. Overseas Supply: Escalating Geopolitical Tensions (U.S.–Iran Conflict) Driving Up Costs for Ethylene-Based PVC Production Abroad and Increasing Force Majeure Shutdowns ◼ Geopolitical conflict in the Middle East has sustained upward pressure on overseas VCM monomer and PVC prices; approximately 5.6 million tons of overseas ethylene-based PVC capacity have declared force majeure. Japan, South Korea, and Taiwan, China rely heavily on imported petrochemical products.

How is the chlor-alkali chemical industry performing? What is its current development status?

Epichlorohydrin (EO) Industry | Caustic Soda Industry | PVC Industry Core Products: Caustic soda, liquid chlorine, PVC, VCM, propylene oxide; Core Competitive Advantages: Electricity cost, salt resource availability, and vertical integration. China: Accounts for nearly half of global caustic soda capacity; calcium carbide-based PVC dominates in the Northwest, while ethylene-based routes prevail in the East China region; environmental protection and energy consumption regulations are stringent, constraining new capacity additions. North America and Europe: Predominantly adopt ethylene-based PVC routes, benefiting from advantageous feedstock costs derived from oil and gas; accelerating deployment of green-electricity electrolyzers to support decarbonization—carbon reduction is a key strategic priority. Formosa Plastics (Taiwan, China): A major integrated player in the Asia-Pacific region; produces large-scale ethylene-based PVC for export and holds a pivotal position in the global vinyls value chain. Olin and Westlake Chemical represent leading North American chlor-alkali and vinyls giants; INEOS and Solvay dominate the European market; Shin-Etsu and Formosa Plastics exemplify high-end integrated players in the Asia-Pacific region; domestically, Zhongtai Chemical and Xinjiang Tianye serve as core leaders in the calcium carbide-based PVC segment.

Westlake Chemical Completes 190,000-Sq-Ft PVCO Pipe Plant in Texas

2 days ago

Westlake Chemical Corporation has completed construction of a new 190,000-square-foot PVCO pipe plant in Wichita Falls, Texas. This expansion significantly increases North American production capacity for advanced potable water conveyance materials.

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