# Ethylene and PVC

Outside China, PVC is built on ethylene: ethylene and chlorine make ethylene dichloride, which is cracked to vinyl chloride and polymerised, a chain that takes about 15% of world ethylene. China makes most of its PVC from coal via calcium carbide instead, and in January to October 2025 it sent 42% of its PVC exports to India, the largest buyer on the world market.

Source page: https://www.materialinsights.org/links/ethylene-and-pvc/

[Ethylene](https://www.materialinsights.org/chemicals/ethylene/) (chemical) and [PVC](https://www.materialinsights.org/chemicals/pvc/) (chemical): 4 relationships.

## How they are linked

### 1. Ethylene via EDC and VCM

*Physical flow · Strong · Ethylene to EDC to VCM to PVC*

Ethylene is chlorinated to ethylene dichloride (EDC), which is cracked to vinyl chloride monomer (VCM) and polymerised; chlorine supplies the rest of the molecule.

- **about 0.46 t** ethylene per tonne of VCM
- **1.02 t** VCM per tonne of PVC
- **about 15%** share of world ethylene used for EDC

A tonne of PVC therefore holds a little under half a tonne of ethylene (about 0.46 t times 1.02), against about a tonne in polyethylene, because chlorine makes up the balance. That makes PVC less sensitive to ethylene prices and more tied to chlor-alkali economics.

Sources: [US Department of Energy (EERE)](https://www1.eere.energy.gov/manufacturing/resources/chemicals/pdfs/profile_chap2.pdf); [Alchem Pro](https://www.alchempro.com/industry-article/11110/global-ethylene-demand-rises-india-expands-capacity-prices-drop-sharply-in-2018-2025)

### 2. Carbide route in China

*Substitution · Strong · Coal-based acetylene replaces ethylene*

China has abundant coal, so most of its PVC is made from acetylene produced from calcium carbide rather than from ethylene.

- **about 80%** share of China's PVC capacity on the carbide route, 2019
- **over 20 Mt** China PVC output, 2019

Carbide-route plants break the link between PVC and ethylene: their costs follow coal and power, and they compete in export markets such as India against ethylene-based resin. The route is spreading to India too: Adani's planned first phase, due end-2026, is acetylene based.

Sources: [Danish Environmental Protection Agency (Miljostyrelsen)](https://mst.dk/media/n1sgngh0/analysis-of-the-chinese-pvc-industry.pdf); [ChemOrbis](https://www.chemorbis.com/en/premium-plastics-news/India-PVC-outlook-for-2026-Policy-failures-leave-market-vulnerable-to-global-oversupply/2025/12/11/954720)

### 3. Price link: upstream feed

*Cost and price · Strong · Both ways*

Ethylene supplies the carbon in PVC outside China, so resin and monomer prices share an oil-linked cost floor.

- **0.71** monthly change correlation
- **0.89** 12-month change correlation
- **0.17** fitted elasticity

Monthly price changes correlate at 0.71 and yearly at 0.89, but the proxy is a broad resin index rather than PVC alone. The low fitted elasticity of 0.17 fits the chemistry, since ethylene is less than half of PVC's mass, and the large share of world supply made by the carbide route.

Sources: [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/chemicals/pvc/correlation/)

### 4. India import dependence

*Policy · High in India · India relies on imported PVC*

India's PVC capacity is far below demand, so it imports resin, much of it from China, and trade policy decides the landed price.

- **over 3.1 Mt** India PVC imports, 2025, nearly double 2022
- **42%** share of China's SPVC exports going to India, January to October 2025

DGTR recommended steep anti-dumping duties in August 2025, but the finance ministry did not notify them before the deadline lapsed, and the BIS quality control order was scrapped in mid-November 2025. New plants from Reliance (1.5 Mt/yr), Adani (1 Mt/yr) and IOCL (0.8 Mt/yr) are due from end-2026 to 2029, so imports are likely to stay high through 2026. ChemOrbis described India in 2024 as the world's largest PVC buyer.

Sources: [ChemOrbis](https://www.chemorbis.com/en/premium-plastics-news/India-PVC-outlook-for-2026-Policy-failures-leave-market-vulnerable-to-global-oversupply/2025/12/11/954720); [ChemOrbis](https://www.chemorbis.com/en/plastics-news/India-s-ADD-proposal-continues-to-echo-through-PVC-markets-World-s-largest-buyer-reshapes-global-tr/2024/11/11/916975&isflashhaber=true)

## For investors

### Key learnings

1. PVC holds only about 0.47 t of ethylene per tonne, so ethylene price swings pass through more weakly than to polyethylene.
2. About 80% of China's PVC capacity used coal-based carbide in 2019, so Chinese coal and power costs, not only ethylene, shape the export prices India faces.
3. With duties not notified and the quality order withdrawn in 2025, Indian PVC producers' margins stay exposed to Chinese exports until new plants start from end-2026.

### What to track

- **China SPVC exports and share going to India**: A rising share signals price pressure in India (Monthly · China customs, ChemOrbis)
- **India PVC trade remedy decisions**: A notified duty would lift domestic resin prices (Event-driven · DGTR, CBIC)
- **Ethylene against carbide-route cost**: Shows which route sets the marginal PVC price (Monthly · Platts, China market data)

## For policymakers

### Key learnings

1. New Indian PVC capacity must choose between the ethylene and acetylene routes, which fixes future exposure to oil or coal costs.
2. Duties recommended but not notified, and a quality order withdrawn, show trade defence did not shape the PVC market in 2025.
3. Ethylene-based PVC also needs chlorine, so PVC plans must be matched with chlor-alkali capacity.

### What to track

- **India PVC import volume**: Measures import dependence (Monthly · DGCI&S)
- **Commissioning of Reliance, Adani and IOCL PVC lines**: Pace of import substitution (Quarterly · company filings)

## India

India imported over 3.1 Mt of PVC in 2025, nearly double 2022, and is the largest buyer on the world market; about 3.3 Mt/yr of new capacity from Reliance, Adani and IOCL is planned from end-2026 to 2029.

## Sources

1. [Energy and Environmental Profile of the U.S. Chemical Industry, Chapter 2: The Ethylene Chain](https://www1.eere.energy.gov/manufacturing/resources/chemicals/pdfs/profile_chap2.pdf), US Department of Energy (EERE) (2000)
2. [Global ethylene demand rises, India expands capacity, prices drop sharply in 2018 to 2025](https://www.alchempro.com/industry-article/11110/global-ethylene-demand-rises-india-expands-capacity-prices-drop-sharply-in-2018-2025), Alchem Pro (2025)
3. [Analysis of the Chinese PVC industry](https://mst.dk/media/n1sgngh0/analysis-of-the-chinese-pvc-industry.pdf), Danish Environmental Protection Agency (Miljostyrelsen)
4. [India PVC outlook for 2026: Policy failures leave market vulnerable to global oversupply](https://www.chemorbis.com/en/premium-plastics-news/India-PVC-outlook-for-2026-Policy-failures-leave-market-vulnerable-to-global-oversupply/2025/12/11/954720), ChemOrbis (2025)
5. [Price correlation, Material Insights](https://www.materialinsights.org/chemicals/pvc/correlation/), Material Insights (World Bank, FRED, IMF data)
6. [India's ADD proposal continues to echo through PVC markets: world's largest buyer reshapes global trade](https://www.chemorbis.com/en/plastics-news/India-s-ADD-proposal-continues-to-echo-through-PVC-markets-World-s-largest-buyer-reshapes-global-tr/2024/11/11/916975&isflashhaber=true), ChemOrbis (2024)