PVC Paste Resin Faces Good Development Opportunity

PVC (polyvinyl chloride) paste resin is a special plastic raw
material extensively used in artificial leather, leather
flooring, automobile decoration material, wallpaper, conveyor
belt, toy, impregnated plastic and glove sectors. China had more
than 10 PVC paste resin producers in 2005. The capacity was
around 350 thousand t/a, the output was around 280 thousand tons
and the consumption was around 440 thousand tons.
   PVC paste resin producers in China have introduced major
production technologies from seven foreign companies. Methods
for production include the seed emulsion process, the continuous
emulsion process and the micro suspension process. More than 30
product varieties can be produced in China.

Price advantage

China imported 150 thousand - 160 thousand tons of PVC paste
resin in 2005. Modified paste resin was mainly from the United
States, Europe and Japan. Conventional paste resin was mainly
from Russia, Korea, Japan and Malaysia. The export amount in
China was less than 10 thousand tons a year. Producers making
export mainly included Shenyang Chemical Co., Ltd., Shanghai
Chlor-Alkali Chemical Co., Ltd. and Tianjin Botian Chemical Co.,
Ltd. The export was mainly made to Southeast Asia countries.
    With impacts from the sustained high oil price in the
international market, there is no longer price advantage in
imported paste resin. The price of imported paste resin was
slightly higher than the price of domestic products from January
to May 2006. The market competitive edge of domestic products
has therefore been enhanced. At the end of May 2006, the selling
price in the international market was US$1 040 - 1 080 per ton
for leather materials, US$1 100 - 1 130 per ton for glove
materials and US$1 150 - 1 200 per ton for toy materials. The
mainstream ex-factory price of PVC paste resin in the domestic
market was RMB9 800 - 10 400 per ton.

Sound development trend

The average annual growth in the market demand of PVC paste resin
is more than 10% in recent years, being much higher than the
growth of 3% - 4% in advanced countries. At a time of the high
oil price in the international market, the price advantage of
PVC paste resin produced with calcium carbide as raw material
has begun to show itself. The demand of PVC paste resin in China
is increasing rapidly and there is a serious capacity deficit
in the domestic market. A good development opportunity has
therefore been put before the PVC paste resin sector in China
mainly using calcium carbide as raw material.

Major PVC Paste Resin Producers
            in China in 2005   (thousand t/a)
Producer     Capacity
Shenyang Chemical Co.               100
Tianjin Botian Chemical Co.         50
Chenzhou Chemical Plant             45
Shanghai Chlor-Alkali Chemical Co.    40
Shanghai Tianyuan Group              30
Anhui Chlor-Alkali Chemical Group    30
Wuhan Xianglong Power Industry Co.    20
Xi'an Chemical Co.                   10
Source: CNCIC Chemdata