Northeast Securities: Prices and profits in the PVC industry are at historically low levels. With the continued evolution of the policies on mercury-free and dual carbon, it is expected to usher in a new cycle.

Northeast Securities released a research report stating that since 2022, the domestic PVC industry has ushered in a new cycle of capacity release, with industry inventory remaining high and PVC prices under pressure. Looking ahead, considering the mainstream process of calcium carbide PVC as a high-energy-consuming product, it is expected that the future planning capacity will slow down in the background of the continuous advancement of the dual-carbon policy. At the same time, under the transformation to mercury-free, the long-term adjustment pressure of calcium carbide production capacity will be faced. Small and medium-sized backward capacity is expected to gradually be cleared under environmental and cost pressures. From the demand side, with the slowdown of the real estate sector and the increase in demand for exports, soft goods, and other non-real estate sectors, overall demand for PVC is expected to maintain steady growth. The PVC supply-demand landscape is expected to improve, and prices and profits are expected to gradually recover.