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Officials warn China's PVC overcapacity will only get worse

By: Nina Ying Sun

April 21, 2014

Despite worsening overcapacity, China still imports a million tons of PVC.

Earlier this month, the China Petroleum and Chemical Industry Federation issued an industry-wide overcapacity early warning report. The PVC resin industry will see its capacity utilization rate drop even further in the next two years.

Sun Weishan, deputy secretary-general, said new capacity continues to be built, much of it due to come on stream in 2014 and 2015, according to China Chemical Industry News.

He blamed China's investment-driven growth model for the situation, but also pointed out the overcapacity, in many cases, is "structural."

Using PVC as an example, he explained that most of China's capacity is general purpose grades. Downstream converters still rely on imports for special grade PVC resins. He said the import volume nears 1 million metric tons each year.

The early warning report has been submitted by the Beijing-based trade group to China's state council.