On January 9, China's Ministry of Finance and State Taxation Administration jointly issued the “Announcement on Adjusting Export Tax Rebate Policies for Photovoltaic and Other Products.” The product list explicitly includes PVC powder, unplasticized PVC, and plasticized PVC within the adjustment scope. The core impact provision concerns PVC exports: effective April 1, 2026, the VAT export tax rebate for PVC powder will be abolished.

Currently, the export tax rebate rate for this category stands at 13%. The policy's far-reaching implications for the PVC market are drawing widespread attention from both the industry and capital markets.

This policy will directly increase export costs. Based on the current domestic PVC powder price of CNy4,500 per ton, the elimination of the rebate will raise export costs by approximately $75 per ton.

From an export fundamentals perspective, China's PVC powder exports have become a crucial support in recent years to offset domestic demand shortfalls. Data shows that total exports reached 2.617 million tons in 2024, with projections exceeding 3.8 million tons in 2025. This sustained growth in export volumes is driven by both rising global demand and the domestic supply-exceeding-demand pattern.

Analyst noted that from an overseas perspective, signs of scrambling for imports have begun to emerge. Many overseas clients have recently initiated contact, anticipating that China's PVC supply costs will theoretically increase by 13% after April, making it difficult to secure low-priced goods thereafter. Additionally, with India's monsoon season ending, the local PVC market's traditional off-season is concluding and the peak season approaching. Coupled with earlier prices hitting historic lows, overseas markets widely expect increased transaction activity for Chinese PVC exports.

However, the domestic industry remains unconvinced. Analyst identified two core concerns: First, inventory pressure remains high. As of December 25, 2025, China's PVC social inventory reached 1.0611 million tons, surging 31.92% year-on-year to a record high. Second, the nine-day Spring Festival holiday will further accumulate inventory, while post-holiday downstream demand recovery faces a time lag.

Even if export rushes trigger short-term price rebounds, they are likely to be fleeting.

Market speculation suggested U.S. PVC supplies might replace Chinese products to fill overseas demand gaps. However, this logic is refuted by fundamental data.

U.S. PVC exports exhibit clear regional lock-in: Mexico and Canada rely on imports exceeding 60%, with 90% of their imports originating from the U.S. This indicates North America remains the core market for U.S. supplies. “If U.S. supplies were diverted to India and Asian markets, North America would face a supply gap, making large-scale substitution difficult.”

In reality, as the world's largest PVC producer, China will remain a critical supplier to overseas markets even with increased export costs.

Long-term, the export tax rebate cancellation will drive profound restructuring in the PVC industry, manifesting in four key trends. First, accelerated capacity rationalization. Outdated, high-cost production will be phased out, boosting industry concentration and expanding market share for leading enterprises. With 1.8 million tons of new PVC capacity added in 2025, total capacity reaching 30.32 million tons by year-end, the pace of capacity optimization will accelerate amid oversupply. Second, industrial structure upgrades. Cost pressures will compel enterprises to shift toward high-value-added PVC products like medical-grade and food-grade applications, driving improvements in technology and environmental standards. Third, export pattern reshaping. The proportion of overseas capacity may increase, transforming the export model from “product exports” to “capacity exports.” Fourth, domestic demand will dominate pricing. Domestic supply and demand will become the core drivers of prices, potentially reducing price volatility.

Looking ahead, short-term overseas import demand will gradually materialize, with concentrated procurement likely occurring before early April. Long-term, if the market adapts to the upward shift in China's PVC cost base, a new pricing structure may emerge, supporting overall price recovery.

As an integrated internet platform providing benchmark prices, on January 12th, the SunSirs PVC benchmark price was 4513.00 RMB/ton, an increase of 2.36% compared to the beginning of the month (4409.00 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any questions, please feel free to contact SunSirs with support@SunSirs.com.