Annual PVC demand in China is set to overtake that of the United States this year, soaring to 16.5 billion pounds with Chinese domestic capacity surpassing 13.2 billion pounds.
By 2010, China's demand for vinyl, largely fueled by huge growth in the construction sector, is expected to climb to more than 22 billion pounds, nearly a third still satisfied by imports, according to a leading Chinese entrepreneur.
``Expansion of the building industry in the next decade will open up a vast market for plastic building materials. Between 2000 and 2005 the growth of output value for the construction sector averaged ... more than 6 percent of [gross domestic product],'' said Sompo Zhou, chairman of Zhou Dynasty International Group, a Beijing company that owns extrusion tooling producer Tongling Trinity Technology Co. Ltd.
``New urban housing will continue to climb at an annual rate of 5.4 million square feet,'' he told the International PVC Conference, held April 26-28 in Brighton, England.
Zhou said a number of major plant expansion projects are set to be completed during the next two years.
Three schemes in Eastern China are due to add nearly 2 billion pounds of vinyl resin per year. These include the Sinopec Qilu Co. Ltd.'s 815 million-pound PVC expansion at Qilu, taking its total capacity to 1.3 billion pounds; and in Ningbo, Taiwan Plastics Group is adding a 660 million- pound PVC plant, fed by vinyl chloride monomer from Taiwan, according to Zhou.
In Fuzhou, northern China, LG Chemical Corp. of Seoul, South Korea, is due to launch a new project with annual output of 660 million pounds this year and intends to raise its PVC production in China to 2.4 billion pounds by 2010.
Other projects include one at Cangzhou, where Cangzhou Chemical Industry Co. Ltd. is set to complete a complex to produce up to 880 million pounds per year of both VCM and PVC later this year, Zhou said.
Chinese PVC production is seeing more concentration with bigger plants and some producers going into integrated downstream production ventures. One new joint project is a plan for another 880 million-pound-per-year PVC plant being constructed in Hulu Island in South Liaoning province by the world's top profile maker, Dalian Shide, along with Jinghua Chemical Industrial Group. That plant will import raw materials from Saudi Arabia petrochemical group Sabic.
Dalian Shide also plans to complete northeast Asia's biggest petrochemicals complex at Shuangdao in Dalian by 2010. This will see its PVC operation on stream by 2006-07, according to Zhou.
PVC pipe is one major market. China has around 1,000 plastics pipe-making plants, equipped with more than 3,000 lines and an annual output of 3.3 billion pounds, he said.
``In the coming five years, China plans to place a large amount of investments into drainage pipe networks, thus further expanding the market for underground plastic drainage pipes,'' Zhou said. By 2010, plastic pipes should be used in 80 percent of construction drainage projects, 80 percent for heat, water and hot-water supply systems for urban buildings and 90 percent of conduit.
Window and door profiles are another major market, with PVC holding a 35 percent share of the market in China. Profile extruders are adding capacity, including the No. 1 player, Dalian Shide, which is raising capacity to 1.5 billion pounds per year. The No. 2 firm in China, Sea Snail Corp. of Wuhu, will increase its capacity to 1.1 billion pounds, according to Zhou.
Dalian Shide currently operates 294 extrusion lines and exports 44 million pounds of products. Sea Snail runs 262 lines and exports more than 110 million pounds of products, he said.
PVC imports to China from Russia, Japan and North America saw a fall in 2003 after China introduced anti-dumping measures following a government investigation. But now, imports from Europe, Southeast Asia and Latin America are being stepped up and the domestic industry is under pressure to strengthen in the face of rising foreign competition, according to Zhou.
