ICIS Predicts that the Trade Flow of PVC Market will be Restructured
2025-9-23
On September 15th, ICIS released a report stating that due to geopolitical tensions and overcapacity, industry profits have narrowed and prices have fallen. In the petrochemical market, the trade flow of ethylene terephthalate (PET) and PVC is expected to undergo significant changes.
The report states that the resumption of tariffs on imported PET by the United States will put pressure on major export regions in Asia, such as South Korea, Thailand, Vietnam, Pakistan and Malaysia. To cope with the impact of tariffs, these exporters need to turn to alternative markets such as the European Union and Brazil, while they also face the risk of "Asian internal market reflux". If the substitute market demand is insufficient to digest excess capacity, some PET products originally planned for export may re-enter Asia, further exacerbating the pressure of oversupply in the region.
In addition, India¡äs ruling to impose anti-dumping duties on PVC imports, coupled with the growth of domestic PVC demand, is expected to change the global PVC trade flow. The anti-dumping duties have the greatest impact on China and the United States, with a median tax rate far exceeding $100 per ton. At the same time, Vietnamese and Middle Eastern producers are facing opportunities, as they may fill the market gap left by the withdrawal of China and the United States.
To address the issue of overcapacity, petrochemical producers in Northeast Asia are actively promoting industry consolidation. Mitsui Chemicals and Asahi Kasei are considering merging their business units, which may include ethylene and vinyl acetate monomer (VAM) facilities. According to informed sources, Mitsubishi Chemical and Asahi Kasei may decide in 2027 whether to integrate their ethylene production capacity into a single plant. If integrated and implemented, the demand for VAM imports in Japan may increase.
At the end of the report, James Wilson, Senior Analyst at ICIS Olefins, cautioned that the current downturn in the petrochemical industry is likely to continue until at least 2028-2029. Prior to this, industry profits were difficult to improve, which means that companies need to pin their hopes for recovery on the next 5 to 10 years. Capacity integration, equipment shutdown and cost reduction will be seen as necessary steps.
The report states that the resumption of tariffs on imported PET by the United States will put pressure on major export regions in Asia, such as South Korea, Thailand, Vietnam, Pakistan and Malaysia. To cope with the impact of tariffs, these exporters need to turn to alternative markets such as the European Union and Brazil, while they also face the risk of "Asian internal market reflux". If the substitute market demand is insufficient to digest excess capacity, some PET products originally planned for export may re-enter Asia, further exacerbating the pressure of oversupply in the region.
In addition, India¡äs ruling to impose anti-dumping duties on PVC imports, coupled with the growth of domestic PVC demand, is expected to change the global PVC trade flow. The anti-dumping duties have the greatest impact on China and the United States, with a median tax rate far exceeding $100 per ton. At the same time, Vietnamese and Middle Eastern producers are facing opportunities, as they may fill the market gap left by the withdrawal of China and the United States.
To address the issue of overcapacity, petrochemical producers in Northeast Asia are actively promoting industry consolidation. Mitsui Chemicals and Asahi Kasei are considering merging their business units, which may include ethylene and vinyl acetate monomer (VAM) facilities. According to informed sources, Mitsubishi Chemical and Asahi Kasei may decide in 2027 whether to integrate their ethylene production capacity into a single plant. If integrated and implemented, the demand for VAM imports in Japan may increase.
At the end of the report, James Wilson, Senior Analyst at ICIS Olefins, cautioned that the current downturn in the petrochemical industry is likely to continue until at least 2028-2029. Prior to this, industry profits were difficult to improve, which means that companies need to pin their hopes for recovery on the next 5 to 10 years. Capacity integration, equipment shutdown and cost reduction will be seen as necessary steps.