China's PVC Prices Hit Two-Decade Low Amid Property Slump and Supply Glut

By November 2025, China's polyvinyl chloride (PVC) market price had fallen to approximately 4,400 yuan per tonne, reaching its lowest level since 2004. This marks a cumulative decline of over 48% from the market's peak in 2021 and remains about 500 yuan per tonne below the previous trough recorded in 2015.

As a pivotal indicator of China's chemical industry, PVC is the second most prevalent plastic and one of the five major thermoplastics. Primarily used in construction piping and film applications, its market dynamics are closely tied to broader economic trends. Over the past 21 years, China's PVC price has shown significant volatility, typically fluctuating between 6,000 and 8,000 yuan per tonne, having previously peaked at over 12,000 yuan. Since 2021, however, prices have rapidly declined, hitting a historic low of 4,300 yuan per tonne by the end of 2025.

Plummeting Profits Across Production Methods

China's PVC production employs two main feedstock methods: calcium carbide and ethylene, both involving vinyl chloride polymerisation. As prices have collapsed, industry profit margins have evaporated.

By the end of November 2025, the theoretical profit margin for calcium carbide-based PVC had fallen sharply, resulting in an average loss of 587 yuan per tonne for the 2025 fiscal year—the most severe deficit in 16 years. The sector has now operated at a loss for four consecutive years since 2022.

Ethylene-based PVC capacity has expanded rapidly in recent years, driven by efforts to reduce reliance on calcium carbide and to serve as a key chlorine sink for integrated petrochemical projects. Capacity is concentrated among large integrated operators like Wanhua Chemical.

Data now indicates that ethylene-based PVC margins have also turned negative, with a projected average loss of 170 yuan per tonne for 2025. This marks the first time this segment has fallen into loss since 2016, a direct consequence of the steep price decline.

Key Factors Behind the Downturn

Analysts attribute the historic lows to several interconnected factors:

Property Sector Slowdown: Over 60% of China's PVC is consumed by the property industry. From 2022 through November 2025, the sector's growth has markedly slowed. New housing starts plummeted by 24% year-on-year in the first eleven months of 2025. Pipe and profile manufacturers are operating at historically low production levels, drastically reducing PVC procurement.

Pronounced Supply Surplus: Rapid expansion in ethylene-based PVC has driven oversupply. By 2025, China's total PVC production capacity had surpassed 30 million tonnes. The commissioning of new projects in 2025, including Bohua's Phase II and Gansu Yaowang, further intensified supply pressure.

Falling Raw Material Costs: Synchronised declines in feedstock prices have pulled down the entire product chain. By November 2025, calcium carbide prices had fallen to approximately 2,500 yuan per tonne, down over 10% since the start of the year. Northeast Asian ethylene prices dropped to $730 per tonne, a cumulative decrease of over 15% year-on-year. Liquid chlorine prices stood at around 25 yuan per tonne, reflecting an 83% collapse since January 2025.

"Alkali Offsetting Chlorine" Mechanism: In integrated chlor-alkali plants, PVC is a key outlet for chlorine, a co-product. To ensure stable production of primary products like caustic soda, chlorine output remains constant, perpetuating high PVC supply levels and sustained market pressure.

Export Market Contraction: India's anti-dumping investigation launched in August 2025 has obstructed Chinese PVC exports to its largest overseas market. This measure has caused severe short-term disruption and may alter long-term export patterns.

Industry Structure Exacerbates Challenges

Analysts suggest the industry is facing a severe shock, with shrinking demand and high supply creating a deep market imbalance. The crisis is a concentrated manifestation of structural issues within the sector.

Currently, general-purpose PVC accounts for roughly 85% of total supply. Product differentiation is limited, with low-to-mid-range offerings dominating, leading to intense and disorderly competition. Furthermore, a geographical mismatch exists: production is concentrated in the central and western regions due to energy advantages, while major consumption hubs are in the east. Producers must absorb high freight costs, increasing operational burdens.

The supply-demand imbalance is expected to worsen before it improves. Market consolidation is seen as inevitable, with part of the industry's capacity likely to be eliminated. While the sector is expected to continue fluctuating at low levels in the short term, the long-term crisis may present an opportunity for leading enterprises to enhance their competitiveness, even as export markets seek alternatives to India.