The global Polyvinyl Chloride (PVC) market size was estimated at 42.08 million tons in 2015. The demand for PVC in construction applications is likely to remain strong owing to its cost effectiveness, resistance to chemical corrosion and durability. Increasing use of unplasticized PVC as a substitute for painted wood in window frames and sills will boost demand for construction over the forecast period.
Demand for polyvinyl chloride in consumer applications such as furniture, clothing, footwear and sportswear will present an immense opportunity in near future due to its low cost and water resistance compared to leather and rubber. Increasing disposable income in emerging economies of Brazil, China and India have been acting as one of the major factors driving demand in consumer applications along with electrical & electronics industry.
PVC is widely used in construction applications such as pipes, cables, floor & wall coverings, landfill liners and fencing. Superior insulation properties have led vinyl chloride polymers to be used widely in electrical wires and cables. Moreover, it is used in a range of consumer products such as toys, ceiling tiles and interior cladding. Growing demand in consumer and electrical & electronics applications will drive growth over the next six years.
Growing infrastructure in China and India will boost demand in construction applications. Both the countries are witnessing double-digit growth rates in infrastructure and building & construction sectors which paves the way for polyvinyl chloride industry. It is heavily utilized in infrastructure projects as pipes, fittings, films, tanks, wire, cables, doors, windows, sheets, etc.
India witnessed an average of 8.5% GDP growth rate between 2004 and 2009 which is termed as infrastructure development era of the country. The five years were most crucial for country since a large number of buildings, road projects, dams, metro train and other projects are initiated in this period. Every project requires vinyl chloride products which almost doubled the demand in this era as compared to previous five years.
Stringent regulatory scenario characterizes global industry for polyvinyl chloride. Britain’s government agency Medicines and Health Products Regulatory Agency (MHRA) has issued a regulatory policy regarding presence of DEHP phthalates in PVC compounds. Additionally, growing concerns regarding health hazards associated with medical grade PVC and its biocompatibility has resulted in use of alternative polymers such as polyethylene and polymethyl methacrylate (PMMA) in medical devices.
Ethylene is raw material required for production of polyvinyl chloride. Volatile price of ethylene possesses challenges to supply-demand curve. Companies such as Qatar Petroleum, Royal Dutch Shell and Saudi Polymers Co. are expanding their ethylene production capacities in Middle East to meet growing local demand.
The construction is the largest application segment for polyvinyl chloride. Construction activities are likely to grow mainly in emerging countries of Asia Pacific, Latin America and Middle East on account of increasing demand for better infrastructure facilities due to rising GDP, increasing urbanization and rapid industrialization. The construction demand has reached a saturation point in North America and Europe; thus, growth rate is expected to be negligible.
The demand for polyvinyl chloride in electrical & electronics is high and steady primarily in North America and Europe. Moreover, growing electrical & electronics industry in Asia Pacific, mostly in China, Taiwan, India, Indonesia, Philippines and South Korea are projected to boost demand over the forecast period.
PVC is used for packaging purposes such as medical devices & apparatus packaging, bottle sleeving, and packaging of electronic & other consumer products. Growing packaging industry, mainly plastic packaging sector is anticipated to exhibit positive outlook. China and India are major packaging producers globally; paving the way for greater penetration in region.
India is one of the major supplier of packaging products to Middle East region. Also, emerging economies such as Brazil and South Africa are likely to become packaging hub which creates an ample opportunity for manufacturers in the region. Rising sales of convenience foods have led to increasing demand for packaging which will drive polyvinyl chloride demand. Also, non-food packaging applications such as packaging of electronic products are likely to contribute to growth.
PVC is used in wires & cables for insulation purposes due to its flexibility and heat resistance properties. Growing construction industry in emerging countries across the globe consequently increases demand for wires and cables for electrification purposes.
Acoustic and thermal insulation properties along with its durability and workability make the polymer among most preferred plastics in automotive applications. Car manufacturers use the material for producing car interiors and for providing vinyl flooring. Moreover, there is an increasing use of plastics in aircraft components as an alternative to aluminum and other metal alloys.
It is also used in aircraft components such as instrument panels, air ducts, seat parts, window shades & reveals, light housings and personal service units. The ethylene and chlorine are primary raw materials required for production of vinyl chloride monomer (VCM). Therefore, VCM prices are affected by a shift in ethylene prices which is derived from crude oil. The crude oil prices witnessed a slump in prices in 2014 when it is dropped to a record low of USD 40 per barrel.
The drastic fall in crude oil prices has changed ecosphere of polyvinyl chloride businesses and shifted its demand due to cheap raw material. Any change in crude oil prices can create a drastic impact on global supply-demand scenario. Middle East and Africa region is a major producer of crude oil which is a raw material used for production of vinyl chloride.
The vinyl chloride monomer (VCM) is used to produce polyvinyl chloride using emulsion, bulk polymerization and suspension methods. Although, polyvinyl chloride can be manufactured from a range of hydrocarbons such as derivatives of sugar cane, coal and crude oil. A significant portion of PVC is still produced from petrochemical products produced from crude oil and hence creates a strong market for Middle East region.
Asia Pacific emerged as the leading region and accounted for 58.1% of the overall volume in 2013. It is generating highest growth in Southeast Asian countries due to growing trade activities, a weak currency and high investment in manufacturing industry. Countries such as Indonesia and Vietnam have become a food production hub of Southeast Asia that requires establishment of manufacturing facilities. The facilities will consume a significant amount of PVC products and hence creates an opportunity for resin manufacturers in the region.
In Europe, market growth can be attributed to increasing demand in Russia and Turkey. The demand is driven by increasing construction activities in these countries which fuels prevalent use in electrical & electronics sector over the forecast period. Growing demand for consumer products in region is also a factor contributing to growth.
Middle East & Africa is expected to be one of the fastest growing region owing to increasing demand in construction activities in countries such as Qatar, UAE and Saudi Arabia. Economic growth in Africa has resulted in growth of consumer industry which in turn is expected to fuel market growth over next six years.
Rising disposable incomes in countries such as Brazil and Mexico are expected to drive growth of consumer and electrical & electronics industries, which in turn is expected to fuel indsutry growth over next six years.
The global polyvinyl chloride industry is highly competitive and fairly concentrated, with top companies accounting for maximum share of the global production in 2015. Key market participants include OxyChem, Ineos Group Ltd. and Formosa Plastic Group have integrated along the value chain to produce PVC products through in-house output of ethylene
Some companies such as Shin-Etsu primarily supply vinyl chloride monomers and polymers to other firms for formulation. Companies such as Solvay S.A. along with Formosa Plastic Group, Ineos Group Ltd. among others are involved in the production of compounds such as rigid, flexible, plasticized and unplasticized PVC.
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