A fresh wave of polyvinyl chloride (PVC) capacity startups in China is deepening the market's oversupply, pressuring domestic prices and spilling over to Taiwan-based producers Formosa Plastics, China General Plastics, and Liancheng. With three new plants totaling 800,000 metric tons coming online from September, the supply glut threatens to dampen the fourth-quarter performance of these key players, who are already cutting output.
New capacity adds to existing glut
China's PVC industry is commissioning three new plants: Haiwan Chemical (200,000 t/yr), Gansu Yaowang (300,000 t/yr), and Zhejiang Jiahua (300,000 t/yr), all starting trial runs from September. This adds to an already oversupplied market where total annual capacity reached about 28 million metric tons in 2024, while consumption stayed below 21 million metric tons due to weak real estate demand.
Price collapse and export spillover
Domestic PVC prices have been sliding, dragging international benchmarks down. Northeast Asian PVC prices have fallen from a 2021 peak of $1,750/mt to around $700/mt, a 60% drop and a four-year low. Chinese producers are aggressively exporting to India and Southeast Asia at low prices, further depressing global market sentiment.
Inventory buildup amid weak demand
China's PVC social inventory has climbed to 953,700 metric tons, up 11.8% year-on-year, as new supply meets lackluster demand. Although the "Golden September and Silver October" traditional peak season is underway, the real estate sector—which accounts for nearly 50% of PVC end-use—remains weak, limiting any demand recovery.
What buyers should watch
Taiwan-based producers Formosa Plastics (1.8 million t/yr capacity), China General Plastics (400,000 t/yr), and Liancheng (654,000 t/yr in Taizhou) are already reducing operating rates. If the oversupply persists, further cuts in Q4 are likely, potentially leading to a "peak season without peak" scenario. Importers and distributors should monitor China's anti-competition policy, which aims to curb overcapacity but has yet to produce concrete measures.
Source: Read the original report | Published: September 24, 2025