Polyvinyl chloride (PVC) is one of the key products of the chemical industry and, in addition to polypropylene and polyethylene, one of the most widely produced plastics. Worldwide, about 39.3 million tonnes of PVC were consumed in 2013. Market researchers at Ceresana expect demand for PVC to increase by 3.2% per year until 2021. Accounting for almost 56% of global consumption, Asia-Pacific is the by far largest sales market for PVC and will continue to develop at the highest growth rates in the future. The North American and Western European markets have returned onto a growth path after incurring severe losses in previous years.
The construction industry is the prime sales market for PVC products. The Chinese construction industry continues to grow at higher rates than in most other countries, even though dynamics are slowing down somewhat. In addition to China, India is one of the growth motors on the PVC market. Demand in India is projected to increase at an average annual growth rate of 4.9%. The USA suffered from weak domestic demand in past years, but are seeing local demand for PVC products rise again, thanks to a more positive development of the construction sector. In Western Europe, countries affected by the crisis such as Spain and Italy seem to more or less have reached the bottom of the valley. Combined with rather stable markets, e.g. Germany, France and the United Kingdom, PVC consumption in Western Europe is likely to increase by about 1% per year again.
US producers of PVC have been able to offset low domestic demand by a considerable increase of export volume. Since feedstock costs in the USA fell notably due to the shale gas boom, US manufacturers could capitalize on low prices when competing on the international market.
In Europe, weak demand in recent years led to high market dynamics: Small and medium sized producers were either acquired by competitors or disappeared from the market. As a result, some countries, e.g. Italy, ceased producing PVC altogether. While some large-scale manufacturers like Arkema sold their PVC business, Solvay and INEOS merged their divisions: The joint venture Inovyn is expected to become operational at the end of 2014. Market researchers at Ceresana believe the founding of this by far largest European PVC manufacturer to be yet another sign of increasing pressure towards market concentration.
While capacity utilization in North America and Western Europe is very high already, Asia-Pacific in particular is still exhibiting notable excess capacity. China, the worldwide largest manufacturer of PVC, is therefore capable to increase output rather easily to satisfy the rising domestic demand. Chinese producers mainly rely on coal-based vinyl chloride to manufacture PVC, whereas other countries, for example the USA, are using exclusively ethylene-based vinyl chloride.
Among the most important PVC products are pipes and conduits, at a considerable distance followed by plastic PVC profiles as well as films and sheets. Other applications accounting for noteworthy shares of PVC demand include cables and cable sheathing as well as floorings. Other industrial applications are automotive coatings, medical products like infusion bags, and shoes. While development of individual application areas will remain highly balanced in the upcoming eight years, there are various differences to be seen when it comes to world regions. The Asian-Pacific region, first and foremost India and China, is producing a comparatively large amount of PVC pipes. Turkey and Russia, on the other hand, manufacture a rather large share of profiles, resulting in PVC consumption in Eastern Europe being highest in the segment profiles. Germany also utilizes the majority of its PVC to produce profiles; the German market is currently profiting from the boom of energy efficient refurbishment.