Global PVC trade flows face disruption amid Middle East conflict

This capacity is particularly evident in China, which has built massive production sites that now result in a surplus exceeding 20%. The global polymer industry is grappling with structural oversupply and a pivot toward buyers’ markets, further complicated by logistics bottlenecks in the Strait of Hormuz.

PVC remains the third largest polymer globally, with a 3.6% growth rate trailing slightly behind PE and PP. Moolji noted that while the global installed capacity for PVC exceeded 66-million tonnes in 2025, demand reached only 51-million tonnes.

This surplus is largely driven by a slowdown in global construction and infrastructure activity, which traditionally accounts for 60% of PVC demand. He reported that it would likely take the remainder of this decade for the global market to balance out structurally.

Moolji highlighted the immediate impact of recent geopolitical tensions in the Middle East on these trade flows. He reported that as of April 2026, over 800 vessels remained stuck near the Strait of Hormuz, a critical artery through which 1.2-million barrels of naphtha and 21-million tonnes of polymers pass daily. Moolji said it is a challenge to bring back normalcy and estimated it could take 200 days for supply chains to stabilise even if a truce holds.

For India, the conflict exposes a vulnerability to Asia-Pacific supply chains. India relies on South Korea and Japan for 55% to 75% of certain polymer imports, yet these nations are heavily dependent on Middle Eastern naphtha. Moolji predicted that these naphtha shortfalls would lead to supply gaps in the Indian market, which is currently the largest importer of PVC globally.

Structural changes in China have reshaped these global dynamics. Following a construction boom that slowed, China now has approximately 3.5-million tonnes of spare capacity that can be ramped up for the international market. Consequently, China and North America have become the primary suppliers to deficit-ridden emerging markets like India, Africa, and Latin America.

Despite new domestic capacities, India is projected to remain import-dependent through the end of the decade. Moolji estimated that India will require 4.2-million tonnes of imported PVC by 2030 to support a requirement for 78 million new homes and massive infrastructure development. 

He concluded that the industry must move away from speculation and focus on adaptability. Moolji stated that success in the current environment is driven by the capacity to adapt in a constantly changing world.