Global PVC demand regains momentum

According to the latest report of the ChemSystems consulting company, the global PVC demand will continue to grow in 2011, but due to the continuous production of new equipment in China, the global PVC capacity utilization rate will remain low. Chemical Systems said that the global economic recession triggered by the financial crisis in 2008 had a severe impact on the construction sector, with the construction industry in Europe and North America being particularly affected. With the gradual recovery of the economy in 2010, the global construction sector has also come out of the trough and will stimulate the growth of PVC demand.

Rapid expansion of production capacity in China

Chemical Systems said that there are differences in consumption prospects and production costs in different regions, and the regional distribution of global PVC investment is also very different. Demand remains low in North America and Western Europe, coupled with higher energy prices, which dampen local PVC investment activity. Due to the rapid growth of domestic demand and the dual stimulation of the calcium carbide process cost advantage, China's PVC production capacity is growing rapidly. Relatively speaking, the slower capacity growth in other regions of Asia is mainly due to the lack of raw materials with competitive advantages and overcapacity.

In recent years, the pace of expansion of PVC production capacity in China has never been faster. In 2003, China's annual PVC production capacity was only 5 million tons, and by 2009 it had exceeded 15 million tons, accounting for nearly 90% of the global PVC new capacity in the same period. Despite the increasingly stringent restrictions imposed by environmental regulations such as carbon emissions and mercury pollution, the rate of expansion of China's acetylene PVC production capacity has not shown signs of slowing down.

In the past two years, the calcium carbide process PVC process in other parts of the world has been largely replaced by the ethylene process, but there is still an advantage in China's calcium carbide process PVC production, because this process does not require the import of ethylene raw materials, and does not need to compete for domestic limited ethylene raw materials. . The raw materials needed for this process, such as coal and limestone, are mainly concentrated in the western part of China, and the economy in these areas is still relatively backward. Investing in the local area can not only use the rich raw material resources in the region, but also stimulate the development of the local economy.

Asia is the main force of demand growth

Chemical Systems Corporation pointed out that the rapid growth of PVC demand in two populous countries, China and India, has made Asia a major driver of global PVC consumption growth. In stark contrast to this, U.S. PVC consumption has been in a downtrend channel since 2004. However, the growth in U.S. demand and the expected recovery in U.S. demand will support future growth in North America. PVC demand in Western Europe has also been relatively weak in recent years, which is determined by the higher per capita consumption in the region and the prospect of lower GDP growth. Growth rates in Eastern Europe and the Middle East are also very fast, mainly benefiting from the advantages of raw materials in these regions. The sustained demand in the South American region is benefited from the higher GDP growth and infrastructure development in the region.

In recent years, environmental protection and safety issues as well as polyethylene replacement products have had some negative effects on PVC consumption. Some countries have already enacted legislation prohibiting the use of plasticized PVC in children's toys. In addition, polyolefins can replace PVC in cables and wires as well as some special architectural applications, slowing the growth of PVC in certain areas, but the cost advantage of PVC will continue to support its consumption in some major construction areas. increase.

U.S. exports increase substantially

Due to a large number of new capacity being put into operation, the decline in domestic demand and the obvious cost advantage of ethylene-based ethylene, the export volume of PVC in North America has increased significantly in recent years. According to relevant data, the US PVC export volume has jumped sharply from 650,000 tons in 2005 to 2.7 million tons in 2010. In 2010, US PVC exports accounted for about 60% of the global total. For a long time to come, the United States will still maintain its position as a net exporter of PVC. However, with the recovery of its domestic construction market, US PVC exports will gradually decline.

For the Middle East region, the region will maintain a net import of PVC, as current demand growth in the region has exceeded the capacity growth rate. The area mainly imports PVC from East Asia.

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