With the countdown to the cancellation of export tax rebates underway, will there be a buying frenzy for PVC powder overseas?

On January 9, 2026, the Ministry of Finance and the State Taxation Administration jointly issued the “Announcement on Adjusting the Export Tax Rebate Policy for Photovoltaic and Other Products.” Effective April 1, 2026, the export tax rebate for value-added tax on photovoltaic and other products will be cancelled. The product list affected by this policy adjustment explicitly includes PVC powder, unplasticized PVC, and plasticized PVC. This means that the export tax rebate rate for PVC powder will drop from the current 13% to zero. According to Li Min, an analyst at Zhuochuang Information, this adjustment will directly increase the export cost of PVC powder. Based on the current domestic market price of approximately 4,500 yuan per ton, the export cost is expected to increase by approximately US$75 per ton after the cancellation of the export tax rebate. In recent years, China’s PVC powder exports have become an important channel for balancing domestic market supply and demand. In 2024, total PVC powder exports reached 2.617 million tons, and industry forecasts predict that exports will exceed 3.8 million tons in 2025. This export growth is attributed to expanding global demand and a relative oversupply in the domestic market. CommoPlast analyst Que Yunyun points out that, judging from overseas market reactions, the demand for advance purchases to avoid future cost increases has already begun to emerge. Some overseas customers believe that after the policy takes effect in April, the cost of Chinese PVC will theoretically increase by 13%, making it difficult to obtain low-priced products. Furthermore, with the end of India’s rainy season and the approaching peak season for PVC demand, coupled with previously historically low prices, overseas markets generally expect increased purchasing activity of Chinese PVC before April. However, the domestic industry is not optimistic about the short-term boost from the “rush to export.” There are two main concerns: first, domestic PVC inventory is at a historical high. As of December 25, 2025, domestic social PVC inventory reached 1.0611 million tons, a significant year-on-year increase of 31.92%; second, the upcoming nine-day Spring Festival holiday will exacerbate inventory accumulation pressure, and the recovery of downstream demand after the holiday usually has a time lag. The market had speculated that US PVC supplies might replace Chinese products to fill the overseas demand gap, but Que Yunyun believes this logic is untenable. US PVC exports are regionally locked, with the core market being North America. Mexico and Canada have an import dependence of over 60% on PVC, with approximately 90% of their imports coming from the US. If US supplies were to be diverted on a large scale to the Indian and Asian markets, a supply gap would emerge in North America, making large-scale substitution unlikely. As the world’s largest PVC producer, even with rising export costs, China will remain a significant supplier to overseas markets. In the long term, Li Min believes that the cancellation of export tax rebates will drive a profound adjustment in the PVC industry, potentially exhibiting four major trends: accelerated elimination of outdated and high-cost production capacity, increasing industry concentration; cost pressures forcing companies to transform towards high value-added products such as medical-grade and food-grade products, promoting industrial upgrading; prompting companies to increase the proportion of overseas production capacity, shifting the export model from “product export” to “production capacity export”; and domestic supply and demand becoming the core driver of prices, potentially reducing price volatility.