Can PVC become the next electrolytic aluminum?

The PVC industry is at a critical point of revaluation. Analysts Ni Ji and Wan Li Yang from Dongfang Securities Research Institute released an in-depth report on February 8, noting that since the end of 2025, the collective movement of PVC concept stocks has attracted market attention, but the price increase of the commodity has been limited. The market generally attributes this to a rush for exports before the cancellation of export tax rebates in April. The report contrasts with electrolytic aluminum and presents a bold judgment: the factors suppressing the prosperity of PVC have fundamentally changed, and the window for asset value revaluation is opening. Divergent Energy Consumption Economics The report points out that both PVC and electrolytic aluminum are high-energy-consuming products, with electricity being a core component of their cost structure. Before 2022, the output value per kilowatt-hour of the two was basically consistent, but it has sharply diverged since then. By early 2026, the output value per kilowatt-hour for producing electrolytic aluminum had reached more than double that of calcium carbide method PVC. "The main reason for the significant divergence between electrolytic aluminum and PVC after 2022 is the change on the demand side. PVC demand has declined; electrolytic aluminum, on the other hand, has seen rapid growth in demand driven by the photovoltaic industry." Analysts estimate that by 2025, aluminum used in photovoltaics will account for 12% of domestic total demand, while PVC demand has declined, relying on exports to digest capacity. The key turning point is that the export proportion of PVC has reached 18%, which the report considers "a very important turning point." In the first three quarters of 2025, emerging markets such as India, Vietnam, and Uzbekistan contributed the main export increment, with GDP growth rates generally exceeding 5%. The report predicts that as long as the countries along the "Belt and Road" maintain growth momentum, the demand structure for PVC is expected to replicate the transformation path of electrolytic aluminum after 2022. Invisible Red Line on the Supply Side The report's more aggressive viewpoint concerns supply constraints. Although PVC does not have the "45 million tons production capacity red line" like electrolytic aluminum, the dual carbon policy has actually set stricter limits. The carbon emission value per ton of calcium carbide method PVC is only 914 yuan/ton CO2, far below the national average, and the carbon emissions in the process can hardly be reduced through green hydrogen or green electricity technologies. "Under the framework of dual carbon goals, calcium carbide method PVC can be said to be one of the least attractive products in the industry." On the overseas front, China's power generation capacity far exceeds that of the world, making replication extremely difficult. Even the investment returns for electrolytic aluminum have significantly improved, but the capacity transfer in places like Indonesia is progressing slowly. The report uses Tianshan Aluminum Industry and Beiyuan Group as samples, estimating that the net profit per kilowatt-hour for electrolytic aluminum will reach 0.21 yuan in 2024, while PVC will have almost no profit. If PVC recovers to a comparable level, it means that the net profit for dual tons (1 ton of PVC + 0.7 tons of caustic soda) will exceed 1,500 yuan