Pvc market in 2026: Full Production, Exploding Inventory, What's Happening?

As a key raw material in the basic chemical industry, the market dynamics of PVC (polyvinyl chloride) are always closely linked to the prosperity of downstream manufacturing. Around the Spring Festival of 2026, the domestic PVC market was caught in a complex situation of supply-demand game, with a high supply, high inventory, and weak demand intertwined, becoming the core contradiction affecting market trends. This article will systematically analyze the current market characteristics from five dimensions: price fluctuations, production changes, inventory accumulation, downstream operating rates, and post-holiday prospects, and predict the market trend after the holiday.

At the beginning of 2026, China's domestic PVC market showed a narrow range of fluctuations. Despite deepening industry losses, the anticipation of a cancellation of export tax rebates led to a rush to export, providing short-term support for spot prices. In the first quarter, PVC enterprises' maintenance plans decreased by 20% year-on-year, coupled with the full release of 2.2 million tons of new capacity added in 2025, resulting in significant supply-side pressure. Demand, however, was subdued. Domestic rigid products (such as pipes and profiles) saw limited rigid demand due to the Chinese New Year holiday and traditional off-season. While soft products (such as films and medical applications) had some demand, they did not create significant consumption highlights. In terms of price, ethylene-based PVC pre-sale orders extended beyond the holiday, and carbide-based domestic pre-sales were normal. However, overall demand was insufficient to absorb the increased supply, leading to a seasonal increase in industry inventory and limited upward price potential.

In January 2026, China's weekly average PVC production reached over 480,000 tons, a record high for the same period. This phenomenon is attributed to both capacity release and production strategies: on the one hand, the full commissioning of new capacity in 2025 directly increased the supply base; on the other hand, companies maintained high operating rates through the "alkali-chlorine balance" strategy, coupled with the off-season for maintenance in the first quarter, leading to a continuous rise in production. With no new maintenance plans scheduled during and after the Spring Festival, weekly output is expected to continue to hit new historical highs, further intensifying supply-side pressure.

At the beginning of 2026, third-party PVC inventory continued to accumulate, with the core contradiction being that supply growth far outpaced demand growth. The Manufacturing PMI fell to 49.3%, down 0.8 percentage points from the previous month, reflecting insufficient effective demand. Despite concentrated export orders before the festival, actual delivery volumes were limited and failed to effectively alleviate inventory pressure. After the festival, under the dual squeeze of production growth and downstream shutdowns, third-party inventory is expected to break historical peaks, forming dual pressures of "high inventory and high supply."

During the Spring Festival holiday, PVC downstream product manufacturers typically shut down for approximately two weeks. The later timing of the 2026 Spring Festival, coupled with uncertainties in pre-holiday inventory stocking in some sectors, led to a slight improvement in average industry operating rates. However, after accounting for sample adjustments of small product manufacturers affected by the sluggish real estate market, actual operating rates remained flat compared to the same period last year. Research indicates that downstream enterprises will begin to shut down sequentially from February 10th, with an estimated earliest resumption of operations on February 23rd, and peak operating rates expected in mid-March. The mismatch between demand recovery and supply growth will further exacerbate the supply-demand imbalance in the post-holiday market.

Post-Holiday Outlook: Market Predictions Amidst Multiple Variables

The PVC market will face multiple industrial adjustments after the holiday, with key influencing factors including:

1. Capacity reduction and utilization rate improvementDespite the removal of some non-operational units, actual production remained unaffected, and capacity utilization increased, indicating sustained pressure on the supply side.
2. Impact of Cancellation of Export Tax Rebates After the export tax rebate policy adjustment on April 1st, export deliveries after the holiday face risks of increased logistics costs, delayed tax rebates, and price fluctuations, making it difficult for new orders to maintain pre-holiday levels.
3. Domestic and International Maintenance Trends Domestic maintenance plans are reduced, and enterprises have a strong desire to maintain stable production. In other countries, some devices in the US and South Korea are undergoing annual overhauls, but the impact is limited, and the trend of slow growth in domestic supply remains unchanged.
4. Uncertainty in the Caustic Soda MarketPost-holiday caustic soda demand is expected to rebound, potentially driving a slight price increase and easing PVC cost pressure, but overall support will be limited.
5. Policy Implications The policy direction of the March meeting may become a market variable and requires close attention.

Overall, after the holiday, the domestic PVC market will continue to be characterized by oversupply, and the reduction in exports may further exacerbate the pressure, leading to a continuous accumulation of industry inventory. Cost support from the industry is weak, and fluctuations in the prices of calcium carbide and ethylene have limited impact on PVC. Long-term policy expectations will be a key variable. It is anticipated that spot prices will trend lower after the holiday, but if positive signals are released from the policy side, a long-term rebound cannot be ruled out. Market participants need to closely monitor supply and demand dynamics, policy direction, and inventory changes to flexibly respond to market fluctuations.