Over the past five years, PVC prices have exhibited a clear volatile pattern, with a relatively wide fluctuation range. In 2020, impacted by the pandemic, the supply and demand structure changed, leading to an initial decline followed by a rise in PVC prices. In 2021, the implementation of energy consumption control policies in China, coupled with concentrated production cuts by overseas companies during the Spring Festival holiday, resulted in a significant increase in my country's PVC exports. Tight domestic supply pushed prices to historical highs. Subsequently, with the decline in raw material prices, the spread of a sluggish real estate market, and the continuous release of new production capacity, PVC prices declined steadily from October 2021 to 2022. From 2023 to 2024, the PVC market entered a phase of strong expectations versus weak reality, with prices showing a pattern of more declines than increases, and the overall price center gradually shifting downwards.

After the Spring Festival in 2025, PVC market prices continued their weak and volatile trend, with the price of calcium carbide-based type V PVC in East China fluctuating between 4750-5050 yuan/ton. Concurrently, both upstream PVC supply and exports reached record highs, with domestic rush to export providing strong support. Industry inventories have been steadily declining since the Spring Festival. With new capacity coming online, trade tariff disputes, adjustments to Indian import policies, the arrival of the regular maintenance season, and the implementation of domestic consumption policies, what will the PVC market look like in the second half of 2025?

From the supply side, concentrated maintenance work at PVC production enterprises began in April 2025 and is expected to continue until August. During this period, the operating rate of PVC production enterprises is expected to fluctuate between 72% and 80%. The reduced output due to maintenance will help alleviate market supply pressure and also reduce the pressure of inventory backlog during the rainy season and the summer off-season. Affected by the Sino-US tariff dispute, PVC imports are expected to further decrease, and the substitution effect of domestic PVC products is expected to continue to strengthen.

New capacity additions will further increase market supply expectations: Fujian Wanhua's 500,000-ton new plant officially started production in April-May; Yaowang's 300,000-ton plant started production in June; Bohua's 400,000-ton and Haiwan's 200,000-ton plants are expected to enter the trial production stage in June-July; and Jiahe's 300,000-ton plant is planned for trial production in the third quarter. The output of these new capacities is expected to be concentrated at the end of the year, and after the third quarter, sales competition among domestic PVC producers is expected to intensify further.

From the demand side, domestic real estate market stimulus policies continue to be effective, and housing market demand is expected to remain stable. However, new housing starts are expected to show a long-term downward trend, while demand for new decoration and renovation is gradually increasing. Domestic infrastructure construction is expected to continue, driving traditional PVC demand. However, the uncertainty of the Sino-US tariff dispute poses a risk to the demand for PVC flooring materials, home appliances, waterproofing materials, toys, and other holiday-related items. As a result, the obstruction of PVC product exports may prevent the release of more than 700,000 tons of consumption, requiring the industry to find new export markets.

Regarding PVC exports, key attention needs to be paid to the possibility of an extension of India's BIS policy at the end of June, and the impact of the implementation of India's anti-dumping policies on imported PVC from April to September. India is my country's largest destination for PVC exports, accounting for over 40% of total exports. Uncertainty regarding its related policies may directly affect changes in domestic PVC export volume from May to September.

From a cost perspective, prices of core raw materials such as calcium carbide and ethylene are expected to continue fluctuating within a range. High raw material costs limit the downside potential of PVC prices, while weak market demand constrains price increases. Specifically, the ex-factory price of calcium carbide in Inner Mongolia is expected to be in the range of 2400-2700 yuan/ton, and the price of ethylene in Northeast Asia is expected to be in the range of 750-850 USD/ton.

Overall, in 2025, the domestic PVC market will still face numerous uncertainties both domestically and internationally, as well as the dual pressure from new production capacity within the industry. The downward trend in domestic PVC product prices is unlikely to change. At the same time, there is limited room for further cost reduction in the industrial chain, making it difficult to fundamentally improve the situation of continuous losses in the PVC industry.