Global PVC Production Cut Expectations Continue to Rise

Editor’s NoteIn 2025, the global oil and chemical industry is generally facing serious impacts from high energy costs, constrained demand, and significant capacity expansion, with all sub-industries experiencing difficulties. At the same time, the industry is under immense pressure for low-carbon and intelligent transformation. Against this backdrop, the development trends of international segmented markets and fields in 2026 are worth paying attention to. Starting today, we will launch a series of reports titled "2026 International Petrochemical Market Outlook," gathering industry insights and forecasts on various segmented markets such as polyvinyl chloride and naphtha, to share with readers.

In 2025, the price of polyvinyl chloride (PVC) resin continued to decline, and the market generally predicted that there would be no turning point in PVC demand in 2026, while calls for production cuts were increasingly rising. A representative from S&P Global Energy pointed out that although global PVC trade volume in 2025 is expected to set a new export record, it has failed to alleviate the pressure of oversupply. The core issue is that prices have fallen to their lowest level in 20 years, causing most producers to experience losses, forcing them to seek price increases or phased production cuts in hopes of waiting for the market to recover.

On December 15, 2025, Westlake Chemical in the United States announced the closure of one of its PVC plants, further reinforcing market expectations of supply contraction and price increases at the beginning of 2026. A distributor analyzed that the decision sends a clear signal that the current cost and profit structure is no longer sustainable, and producers must take proactive and aggressive measures, even if it means enduring short-term pain.

Beyond the expectations of production cuts, the Indian market has become the core variable influencing the PVC price trend in 2026. Previously, the highly anticipated new quality control regulations by the Bureau of Indian Standards were revoked, and the anti-dumping investigations targeting multiple countries have expired without any announcement of extension. As a result, the price of PVC resin in India has seen one of the largest declines globally, with Platts Energy Information data indicating a drop of over 30% from December 2024 to December 2025. The impact of the Indian market changes on U.S. PVC exports remains a subject of debate. Some believe that U.S. manufacturers should avoid strong regional product competition in India. Indian industry insiders point out that despite calls for increased imports from the Middle East and the United States, opinions are highly divided, and Asia-origin PVC goods will continue to dominate the Indian PVC market in the first half of 2026. However, there are also viewpoints suggesting that the possibility of U.S. PVC gaining more market share has increased after India lifted the control measures.

Other regional markets show significant divergence. The European market is exhibiting cautiously optimistic sentiments, with progress in the Russia-Ukraine peace talks. If a formal agreement is reached, post-war reconstruction will drive PVC demand. The German government has committed to investing 300 billion euros in infrastructure over the next 12 years, further supporting demand growth. The Brazilian market, on the other hand, presents a complex scenario. Despite a historical low unemployment rate and increased household income driving a counter-cyclical rise in real estate project starts, PVC demand remains uncertain in recent months. Due to Brazil imposing anti-dumping duties on PVC from the United States and maintaining tariff barriers against Asia, Brazilian PVC buyers have been forced to turn to tariff-exempt countries such as Colombia, Argentina, and Egypt, which have become their largest sources of supply.

The export of PVC from the United States faces multiple tariff obstacles: The European Union will impose a definitive anti-dumping duty of 58% to 77% on U.S. PVC starting January 2026, resulting in a loss of competitiveness for its products; the Mexican government has also initiated an anti-dumping investigation into U.S. suspension-grade PVC. Despite the uncertainty surrounding tariff policies, a representative from S&P Global Energy predicts that global PVC trade volume will remain high in 2026, with no significant changes in trade flows.

At the same time, global production cut expectations continue to rise. In the Asian market, the pressure of oversupply is intensifying, and the market generally expects to improve the supply-demand balance through production cuts. Some marginal factories in Asia have already fallen into losses, indicating a high possibility of production cuts in the region. The sentiment in the U.S. market is similar to that in Asia. Previously, due to equipment maintenance and production cuts, the decline in PVC prices temporarily halted, and traders expect the tightening supply trend to continue, but no manufacturers have yet publicly announced plans to adjust their operating rates. Analysts point out that if the U.S. PVC operating rate remains around 80%, it may achieve a tight supply balance for the Latin American region; if the operating rate increases, its products will have to directly compete with Asian PVC in the African, Middle Eastern, and Indian markets.