Recently, Harry Thomas, an analyst at S & P Global Commodity Insight, said that the polyvinyl chloride (PVC) market may remain at a low ebb in the coming years. But the worst is coming to an end. Led by Indian demand, the long-term outlook for PVC is very strong.
   's long-term demand is highly optimistic.
   Harry Thomas said: "the fundamentals of PVC are very persuasive. From an investment perspective, the technical advantages of PVC resins in terms of durability and cost-effectiveness are extraordinary. " He pointed out that from the demand side, the per capita consumption of PVC resin has increased from 4.53kg per year in 2010 to 5.98kg per year in 2023, with a substantial increase over the past 13 years, but there is still great potential for growth.
& the capital investment plan of emsp;  chemical enterprises shows that PVC producers are full of confidence in the long-term future of PVC. Over the past decade, global PVC demand and production capacity have been growing at a rate of 900000 to 1.1 million tons per year. S & P Global expects annual growth to remain between 1.5 million and 2 million tonnes over the next five years. "by 2028, there will be 23 new PVC projects with a total capacity of 8.9 million tons per year," Thomas said. Of this capacity, China and India account for 2/3, while the Middle East, the United States and Southeast Asia account for 1/3. The increase in capital investment makes it clear that PVC's expected demand is more optimistic. " By 2050, an additional 30 million tons per year of PVC capacity will be needed to meet demand. "based on an investment of $4 billion to $6 billion per 1 million tons of capacity, PVC investment space is expected to be as high as $150 billion to $200 billion between now and 2050." Thomas added.
   is having some difficulties in the current market
   for the current PVC market, Thomas admitted that PVC is still very difficult. Global PVC operating rates averaged more than 80 per cent between 2017 and 2022, falling to 76 per cent in 2023 and are expected to remain at 75-78 per cent in the next few years until 2027.
   European PVC producers have been hit hardest as a result of the economic slowdown in Europe caused by the conflict between Russia and Ukraine that began in early 2022. European PVC operating rates fell from 82 per cent in 2021 to 65 per cent in 2022 and to 61 per cent in 2023. According to the European chlor-alkali industry association, upstream chlorine production fell by 24% between 2021 and 2023. "the situation has taken a turn," Thomas said. In September 2023, chlorine production in Europe increased year-on-year for the first time since December 2021, and all monthly data showed year-on-year increases in the year to January. In fact, January 2024 was the best month for chlor-alkali production in Europe in a year and a half. Therefore, we believe that the production data show that the PVC market in Western Europe will improve in 2024. "
   even the American PVC manufacturer with the lowest cost of chlorine and ethylene in the world faces a very challenging business environment. Housing construction is the main user of US PVC and has been a reliable demand driver since 2010, peaking in April 2022 but constrained by inflation and rising interest rates. "from 2010 to January 2024, the number of housing construction in the United States fell by about 30%," Thomas said. " Because of the cost advantage of the United States, American PVC producers are able to push PVC that cannot be sold in China to export markets. In 2023, PVC sales in the United States and China fell by 680000 tons, while exports increased by 570000 tons. "We expect US housing construction to continue to decline until the Fed starts cutting interest rates later this year," Thomas said. As a result, we expect US PVC demand to be flat. " The era of emsp;  India is approaching
   last year, global PVC trade volume reached a new record of 13.5 million tons, and this figure is expected to rise this year. This trade volume is equivalent to 28% of the world's PVC consumption. In terms of exports, North America has replaced Western Europe as the world's largest PVC export region, and Western European exports have dropped sharply in the past two years. China's PVC exports have surged from about 500000 tonnes in 2020 to 2.4 million tonnes in 2023, nearly half of which went to India.
   Thomas said: "the 'Indian era' of the PVC market is coming, and they have become the hottest region for vinyl products in the world. India's PVC demand has doubled in the past decade, from 2.1 million tons per year in 2013 to 4.5 million tons per year in 2023. Frankly, looking ahead, we expect them to continue to double in the next 10 years. "
   at present, India's PVC resin is heavily dependent on imports. In 2013, its total production in China was 1.2 million tons, accounting for 57 per cent of demand. By 2023, India and China's production had increased only slightly to 1.4 million tons, accounting for only 31 per cent of demand; the remaining 3.1 million tons were supplied by imports. Prudential Industries, India's largest PVC producer, has two projects with a total capacity of 1.5 million tons per year, which are scheduled to start production by the end of 2026, Thomas said. But even so, imports will continue to account for a large share of India's growing demand. Source: China Chemical Industry Daily