India is currently the fastest growing economy in the world. Thanks to its young population and low social dependency rate, India has its own unique advantages, such as a large number of skilled workers, low labor costs and a huge domestic market. At present, India has 32 chlor-alkali installations and 23 chlor-alkali enterprises, mainly located in the southwest and eastern parts of the country, with a total production capacity of 3.9 million tons in 2019. In the past 10 years, the demand for caustic soda has grown by about 4.4%, while the demand for chlorine has grown by a slower 4.3%, mainly due to the slow development of the downstream chlorine consumption industry.
Emerging markets are booming
According to the current industrial structure of developing countries, the future demand for caustic soda will grow rapidly mainly in Southeast Asia, Africa and South America. In Asian countries, the capacity of caustic soda in Vietnam, Pakistan, the Philippines and Indonesia will increase to a certain extent, but the overall situation of these regions will remain short of supply. In particular, the demand growth of India will exceed the capacity growth, and the import volume will further increase.
In addition, India, Vietnam, Indonesia, Malaysia, Thailand and other Southeast Asian regions to maintain a strong demand for chlor-alkali products, the local import volume will gradually increase. Take the Indian market as an example. In 2019, India’s PVC production capacity was 1.5 million tons, accounting for about 2.6% of the global production capacity. Its demand was about 3.4 million tons, and its annual import was about 1.9 million tons. Over the next five years, India’s PVC demand is expected to grow 6.5 per cent to 4.6 million tonnes, with imports growing from 1.9 million tonnes to 3.2 million tonnes, mainly from North America and Asia.
In the downstream consumption structure, PVC products in India are mainly used in pipe, film and wire and cable industries, of which 72% demand is pipe industry. Currently, per capita PVC consumption in India is 2.49kg compared to 11.4 kg worldwide. Per capita consumption of PVC in India is expected to increase from 2.49kg to 3.3kg over the next five years, mainly due to increased demand for PVC products as the government of India steps up investment plans aimed at improving the supply of food safety, housing, infrastructure, electricity and public drinking water. In the future, India’s PVC industry has great development potential and will face many new opportunities.
The demand for caustic soda in Southeast Asia is growing fast. The average annual growth rate of downstream alumina, synthetic fibers, pulp, chemicals and oils is about 5-9%. The demand for solid soda in Vietnam and Indonesia is growing fast. In 2018, the PVC production capacity in Southeast Asia was 2.25 million tons, with an operating rate of about 90%, and demand has maintained an annual growth rate of about 6% in recent years. In recent years, there have been several production expansion plans. If all production is put into production, part of the domestic demand can be met. However, due to the strict local environmental protection system, there are uncertainties in the project.
Post time: May-29-2023