The calcium carbide industry's development is deeply intertwined with energy structure and industrial policies. By 2025, it achieved transformation through quality improvement and efficiency enhancement, exhibiting characteristics such as optimized supply and differentiated demand; in 2026, the tight supply-demand balance will continue, with policies and emerging demands driving the transformation.
Price trends in 2025:
After fluctuating at high levels, prices declined, driven by multiple factors including supply and demand, costs, and policies. At the beginning of the year, the resumption of work and production boosted prices to 2,733.33 RMB/ton; in the second quarter, production restrictions in Inner Mongolia led to a supply contraction, and prices in North China rose to 2,800 RMB/ton; from the third quarter onwards, downstream maintenance and the release of new production capacity led to weak demand, and prices continued to fall, dropping to 2,300 RMB/ton by the end of the year. The price difference between Northwest China and East/South China was 400-600 RMB/ton, due to differences in resource costs and logistics, indicating strong price linkage within the industry.
Supply side:
Effective production capacity was 42 million tons/year (the same as in 2024), with a 12 percentage point increase in the elimination rate of outdated facilities with a capacity of less than 100,000 tons/year, and 3.5-4 million tons/year of zombie capacity. 80% of the newly added 2 million tons of capacity were integrated projects supporting PVC and BDO production, resulting in limited growth in marketable volume. The six northwestern provinces accounted for 88% of the capacity (Inner Mongolia 33.21%), with leading enterprises operating at over 75% capacity, while smaller producers operate at less than 50%; total annual production reached 38 million tons, a significant year-on-year increase. Exports from January to March totaled 41,000 tons (a 48.17% year-on-year increase), mainly to RCEP countries, but the sustainability of this growth is affected by Indian policies.
Demand side:
PVC accounts for 78% of calcium carbide consumption, but demand is weak due to the downturn in the real estate market and competition from ethylene-based production. BDO has become the core driver, contributing 20% to demand, with the Inner Mongolia Sanwei Phase II project boosting demand by over 25%. Annual new BDO capacity reached 1.63 million tons/year, while the expansion of PBAT/PBS further amplified indirect demand, and PVA demand remained stable.
In terms of policy, 30% of production capacity meets energy efficiency benchmarks, environmental protection costs have increased by 8%-10%, and local governments are promoting the integration of coal, power, and chemical industries; on the cost side, price reductions in semi-coke and limestone have eased pressure, but electricity costs remain high, giving self-owned power plants in Northwest China a significant advantage; technologically, enclosed carbide furnaces account for over 90% of the total, and advanced enterprises have reduced their electricity consumption per ton to 2,600 kilowatt-hours.
By 2025, the industry completed its transformation from scale expansion to quality improvement and efficiency enhancement, with price fluctuations, supply optimization, and demand differentiation as key characteristics.
Price trend forecast for 2026
SunSirs expects a "volatile bottoming-out with a slight upward trend," with a core operating range of 2,200-2,800 RMB/ton, and a price center slightly higher by 5%-8% compared to 2025. Supporting factors include: the elimination of outdated production capacity leading to supply contraction, support from emerging BDO demand, and rigid cost support; suppressing factors include: PVC profitability pressure limiting the acceptance of high prices, and the addition of new integrated production capacity increasing commodity supply. Short-term fluctuations will be affected by downstream maintenance, power policies, and the export market.
On the supply side, the newly added 2 million tons of capacity are all from integrated projects, resulting in limited increases in marketable output; all facilities with a capacity of less than 100,000 tons per year have been shut down, eliminating 2 million tons of outdated capacity, and the CR10 (concentration ratio of the top 10 companies) has risen to over 38%. Operating rates have recovered to 75%-80%, with production reaching 39-40 million tons; exports are expected to be 150,000-200,000 tons, solidifying the dominant supply pattern in Northwest China.
On the demand side, PVC demand is showing a marginal recovery (3%-5% growth), and competition from ethylene-based production remains; BDO is driving demand growth of 8%-10%, and the demand transmission from RCEP countries is also contributing, resulting in an overall demand increase of 4%-6% for the year, with emerging sectors contributing more than 25% of the total.
According to SunSirs, strict policy controls on new capacity and the deepening carbon market are increasing cost pressures; on the cost side, green electricity substitution is becoming a key factor in cost reduction for leading companies, while environmental protection costs remain high; technology is moving towards low-carbon and intelligent solutions, and integration is becoming mainstream. We recommend that companies accelerate their integration and green electricity deployment, focus on the BDO sector, and promote low-carbon technologies; regulatory authorities should coordinate capacity optimization, improve green finance, and guide companies in responding to international trade risks.
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