The Supply-demand Situation in The PVC Industry Has Shifted Towards A Tight Balance

In March 2026, the supply and demand situation in the domestic PVC industry underwent a significant transformation, gradually shifting from an oversupply situation in the early stage to a tight balance state, which became the core logic supporting the market trend.
The supply side showed a clear structural differentiation.In March 2026, the supply and demand situation in the domestic PVC industry underwent a significant transformation, gradually shifting from an oversupply state in the early stage to a tight balance state, which became the core logic supporting the market trend.
The supply side showed a clear structural differentiation. The ethylene-based PVC was affected by the sharp increase in ethylene raw materials and the deep cost inversion, causing enterprises to voluntarily reduce production to avoid losses, resulting in a significant decline in industry operating rates and a continuous contraction in the supply side; the calcium carbide-based PVC had relatively stable costs and still maintained a reasonable profit margin, with operating rates remaining above 82%, becoming the main supply force in the market. The ethylene-based PVC was affected by the sharp increase in ethylene raw materials and the deep cost inversion, causing enterprises to voluntarily reduce production to avoid losses, resulting in a significant decline in industry operating rates and a continuous contraction in the supply side; the calcium carbide-based PVC had relatively stable costs and still maintained a reasonable profit margin, with operating rates remaining above 82%, becoming the main supply force in the market. Coupled with the fact that no new production capacity was added in the industry in 2026, the marginal tightening trend of the overall supply side was clear.
Coupled with the fact that no new production capacity was added in the industry in 2026, the marginal tightening trend of the overall supply side was clear.
The demand side gradually recovered as the spring production resumed, with the operating rates of downstream fields such as pipes, profiles, and foamed panels increasing month-on-month, and the orderly release of demand.The demand side gradually recovered as the spring production resumed, with the operating rates of downstream fields such as pipes, profiles, and foamed panels increasing month-on-month, and the orderly release of demand. In terms of inventory, the factory inventories were rapidly depleted, while the social inventories were still at a historical high level, but the growth rate had significantly slowed down. In terms of inventory, the factory inventories were rapidly depleted, while the social inventories were still at a historical high level, but the growth rate had significantly slowed down. The export side maintained resilience in the first quarter, effectively absorbing the domestic excess production capacity and alleviating the supply-demand pressure.
The export side maintained resilience in the first quarter, effectively absorbing the domestic excess production capacity and alleviating the supply-demand pressure.
Industry insiders pointed out that the current tight balance situation in supply and demand has been initially formed.Industry insiders pointed out that the current tight balance situation in supply and demand has been initially formed. If the ethylene-based production facilities continue to reduce production and the downstream peak-season demand continues to be fulfilled, the market supply-demand situation is expected to further optimize; however, after the cancellation of export tax rebates, the weakening of external demand may re-intensify the domestic inventory pressure, and there is still considerable uncertainty in the industry's supply and demand. If the ethylene-based production facilities continue to reduce production and the downstream peak-season demand continues to be fulfilled, the market supply-demand situation is expected to further optimize; however, after the cancellation of export tax rebates, the weakening of external demand may re-intensify the domestic inventory pressure, and the industry supply-demand still has significant uncertainties.