China's PVC Industry Facing Challenges of New Regulations

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Researched by Industrial Info Resources (Sugar Land, Texas)--Although China's polyvinylchloride (PVC) industry grew rapidly last year, it will face several challenges this year, including the implementation of new environmental and admittance policies. In 2007, PVC production reached nearly 15 million tons, up 30% compared with 2006. China produced 9.6 million tons of PVC products and consumed 10 million tons in the same year. Experts say that an additional 3 million tons will be added to China's PVC production capacity in 2008.

As the world largest PVC manufacturer, China is facing the detrimental effects of PVC to the environment. The government has issued regulations to protect the environment, putting pressure on companies that produce calcium carbide, one of the basic materials for PVC production. It is estimated that 75% of the country's PVC has been produced using calcium carbide. The new environmental regulations have caused PVC manufacturers to bear higher material costs and a loss is price competitiveness.

The government has also stopped giving special treatment to PVC companies. Lower electricity prices will no longer be offered to PVC plants, and the export tax rebate rate has been lowered to 5%.

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