Chlor-alkali and PVC: 2025 Review and 2026 Outlook

The chloralkali and PVC industries ended 2025 facing another year defined more by structural adjustment than short-term volatility. Global construction activity remained weak, high energy costs continued to pressure European producers, and shifting policy frameworks increasingly determined where products could flow. Competitive pressure from Asia persisted across all major regions, reinforcing the industry's transition toward a structurally lower-cost supply.

A series of confirmed shutdowns and exits set the tone in Europe. Fortischem, Spolana, Arkema Jarrie, and Vencorex all left the market in 2025, while Vynova advanced the closure of its Beek site and Dow detailed its withdrawal from Schkopau. These developments underscored how sustained cost pressure and subdued converter demand have reshaped the regional operating environment. European producers faced tight margins, increasing import penetration, and a growing dependence on trade flows influenced by Asia's cost advantage.

Regional Dynamics: North America

North America began 2025 in relatively balanced conditions before operational disruptions tightened caustic soda markets. Multiple producers declared force majeure, causing export caustic values to surge sharply higher. Domestic demand from alumina, pulp and paper, and water treatment remained steady enough to prevent further escalation.

PVC demand in the United States stayed modest throughout the year. High building costs and uneven housing indicators limited domestic consumption, resulting in growth of roughly 1–2 percent. Global PVC price weakness reduced chlorine pull and helped ease caustic tightness. Operating rates generally settled in the high 70s to low 80s range, and exports remained essential for managing inventories.

U.S. trade flows shifted once again under the influence of several barriers. Brazil increased its antidumping duty to 43.7 percent, Mexico launched an investigation, and India's BIS requirement restricted access to one of the United States' largest export markets. Shipments to India fell to just over one-fifth of their 2024 level until the removal of BIS and ADD in late 2025, which is expected to reopen the route in early 2026. Turkey became a more prominent destination as sellers adjusted to changing trade patterns.

Regional Dynamics: Europe

Europe spent 2025 navigating a difficult combination of high energy costs, muted demand, and persistent import competition. Asian volumes continued to capture a larger share of converter demand. Construction investment remained soft despite some improvement in German permitting late in the year.

Operating rates were constrained throughout 2025, and ongoing rationalization reflected the sector's adjustment to a structural shift in competitiveness. Producers increasingly relied on imports and optimized operating rates to manage margins, but pricing power remained limited.

Regional Dynamics: Asia

Asia maintained its role as the most flexible and cost-competitive supply hub for both chloralkali and PVC. Prices across Northeast and Southeast Asia softened further due to an abundance of material, subdued downstream activity, and limited infrastructure spending.

China's export position strengthened after India relaxed trade barriers late in the year. South Korea continued to play a significant role in global flows, even as long-term questions persisted around petrochemical restructuring and competitiveness.

Regional Dynamics: South America

South America again displayed divergence across markets. Brazil's increased antidumping duty reshaped PVC imports, while Braskem's closure of its Maceió chloralkali facility increased regional dependence on EDC imports to support PVC production. Construction activity remained generally weak across the region.

Caustic soda consumption held steady, anchored by traditional industrial uses, but the broader market balance remained soft.

Regional Dynamics: Middle East and Africa

The debut of Qatar Vinyl's PVC production marked a significant change for the region. The new 350 ktpa plant is expected to influence the competitive balance in India and Europe, supported by shorter transportation times and competitive costs—an advantage in oversupplied global markets.

Turkey remained a key outlet for international sellers, although intense pricing pressure persisted due to competition from China, the United States, and Egypt. A reduction in Turkey's duty on U.S. PVC provided limited relief for American suppliers but offered little benefit to Europe.

Global Review: Ending 2025 in Oversupply

By late 2025, the PVC market worldwide was firmly oversupplied. Caustic soda moved closer to balance after early-year volatility but remained highly sensitive to changes in vinyls operating rates.

The reopening of India following the removal of BIS and ADD is expected to be one of the most influential factors for early 2026, particularly for U.S. exporters. Meanwhile, European capacity continued to contract, and Middle Eastern and U.S. supply played increasingly central roles in global trade flows.

Weak construction activity across most regions continued to limit demand for chlorine derivatives.

2026 Outlook: Cautious Expectations Across Both Chains

Expectations for 2026 remain muted. The caustic soda market is unlikely to experience significant demand growth, as economic softness across major end-use sectors continues to contain consumption. U.S. producers will continue to rely on exports, although improved access to India may provide some relief.

Europe is expected to face another year of constrained operating rates and limited pricing power. High energy costs, soft demand for PVC, and competition from low-cost imports leave little room for margin improvement. Additional rationalization is possible, especially for older or structurally challenged assets.

Looking ahead, the broader outlook will depend on whether construction activity stabilizes, how quickly data-center investment begins contributing to incremental PVC demand, and how efficiently the market absorbs new supply from Qatar Vinyl. The industry enters 2026, cautious yet increasingly aligned on the long-term structural adjustments necessary to navigate a fundamentally altered global environment.