Published June 2014
PVC is the most versatile of all thermoplastics because of the variety of its end-use forming techniques. PVC can be converted either into rigid products of considerable strength and hardness or into a variety of flexible articles when compounded with plasticizers. Rigid applications accounted for 63% of total consumption in 2013 and provide most of the growth opportunities.
PVC use is highly dependent on the construction market, as about 70% of its world consumption is for pipe, fittings, siding, windows, fencing, electrical and other applications. Also, PVC has increasingly been used as a replacement for traditional construction materials such as wood and metals, so its growth trend has been above that of the overall construction industry.
Three regions drive PVC demand—Northeast Asia (mostly China), North America (primarily the United States) and Western Europe. Together, these regions account for about 68% of world demand for PVC.
The following pie chart shows world consumption of PVC:
In the construction market, rigid PVC pipe and fittings accounted for about 68% of total PVC consumed in 2013. Once construction industries in mature industrialized countries improve from the recession, PVC demand should resume its strong growth for piping and fittings, especially for telecommunications and municipal utilities. In the developing world, PVC pipe will grow rapidly, particularly for infrastructure for drinking water, sewage and drainage.
Other leading rigid PVC applications are siding, windows, fencing and packaging sheet. In North America, PVC is used primarily for pipe and siding, while in Europe and Asia, most use is for pipe and window frames. Builders in Japan have begun to use more PVC windows, in part because of their superior insulating properties to reduce heating and cooling costs. Demand is growing strongly in China for all construction materials, as well as for consumer goods.
Global PVC consumption recovered from the 2008–2009 recession by 2011 but the vinyl inventory supply chains had been only partially refilled by the beginning of 2011. Construction—the economic activity with the closest correlation to PVC sales—has also been slow to improve worldwide, based on business skittishness. PVC consumption increased about 7.5% per year from the low in 2009 to 2011, but has increased much more slowly since then, at an average of about 3% per year during 2011–2013.
During the recession, housing starts in the United States declined. In fact, U.S. housing starts in 2009 fell to levels not seen since 1959. Also during this period, home resales, another important indicator for PVC consumption, were down to very low levels and as a result, the inventory of unsold homes remained near 4 million units through most of 2009. Although some recovery in the housing market did occur during 2010–2011 it was not until 2012 that substantial growth (above 15% per year) occurred. By 2013, PVC demand was still below the 2008 level. It will be another two years before there will be full recovery to prerecession levels.
China accounted for about 84% of total Northeast Asian consumption in 2013. PVC consumption in China began to decline at the end of 2007 and through 2008; however, it had recovered to prerecession levels by 2010. Improvement in this, the largest consuming region, was a strong 9% in 2009, followed by another 15% in 2010, led by China at 16% per year in 2008–2010. In 2010–2013, the region averaged growth of about 4% per year; the growth rate for China is a little higher at 5.5% per year.
In Japan, consumption declined to less than one million metric tons in 2009. Demand surged about 11.5% in 2010 and 5.5% in 2011, but a further decline in 2012 with only partial recovery the next year left Japanese consumption still below the 2007 level. Overall, Japans consumption of PVC will continue to decline for at least the next five years.
Japans declining market mirrors that of Western Europe, where demand has declined (5–6% per year) almost every year since 2007. In 2013, consumption was only two-thirds of the 2007 level. Western Europes demand is expected to eventually recover, but only slowly (1–5% per year) over the next five years.