Exchange and Outlook on the Recent Situation of the EVA Market

EVA Industry in 2025: Capacity Expansion, Supply-Demand Imbalance, and Market Transformation

Slowing PV Growth Drives Capacity Expansion, Shaping EVA Market Structure: In recent years, China's PV industry has experienced decelerated growth while rapidly expanding self-sufficiency, creating structural and phased imbalances. In 2024, the PV sector slowed further, with nationwide new installations growing only 28% year-on-year—significantly lower than the previous two years. From 2021 to 2023, photovoltaic materials faced supply shortages, keeping import volumes high. However, domestic production capacity surged from 970,000 tons to 2.9 million tons during the same period, significantly alleviating the supply gap by 2024. A new round of capacity expansion began in 2025, with prices initially falling before recovering somewhat. Companies within the industry increasingly integrated upstream vinyl acetate production to enhance cost competitiveness. Concurrently, domestic capacity expansion reduced imports, creating surplus in low-end EVA. Companies actively expanded export channels to Belt and Road countries.

Private firms dominate East China expansion; tubular reactors become mainstream: Domestic capacity increased by 450,000 tons in 2024, growing at 18.37%. New capacity concentrated in East China, primarily driven by private enterprises with limited foreign investment. Imported equipment primarily features BASF tubular reactors, producing photovoltaic-grade EVA with low viscosity that meets solar material requirements; batch reactors mainly yield high-solute, high-viscosity feedstock.

Frequent price fluctuations with recovery in Q1-Q3: Domestic prices fluctuated sharply from January to August. Unlike last year's pattern of high prices followed by volatility, this year saw initial gains before declines, hitting a low in July before rebounding in August. Photovoltaic-grade material prices held an advantage in the first half, with overall prices stabilizing near the five-year average and showing recovery compared to 2024. As of last Thursday, soft material prices stood at 11,300 yuan/ton, up 24.91% year-on-year; photovoltaic-grade material prices ranged between 11,000-11,200 yuan/ton, rising nearly 16% year-on-year. Fourth-quarter prices are projected to be weaker than those in the third quarter.

Supply growth amid declining imports, with notable export foam expansion: On the supply side, 400,000 tons of new capacity came online from January to August, maintaining domestic production capacity at 3.3 million tons. Output increased, surpassing 160,000 tons in August to hit a record high. Shenghong Group emerged as the industry leader with the world's largest capacity, also topping the sector in photovoltaic output during the second half of the year. Imports began declining in 2024, with January-August 2025 imports totaling 484,800 tons—down 180,000 tons year-on-year. Exports grew to 200,000 tons during the same period, representing a 21.47% increase. The export dependency ratio rose to 8.9%, while the import dependency ratio fell to 22%. Imports primarily originated from South Korea, Taiwan, China, and Thailand, while exports were mainly destined for Vietnam, Africa, and North American countries. Foam materials constituted the primary export category, with a slight increase in photovoltaic exports observed in August.

Strong demand for profit recovery and high growth in photovoltaic installations: Industry profits showed significant recovery from January to August, with an average profit of approximately 1,677 yuan, a 30% year-on-year increase. Profits were higher than those of high-voltage materials for most of the period, leading many industry facilities to prioritize EVA production. On the demand side, policy stimulus drove supply shortages for photovoltaic materials from January to May. Demand slowed in June and July, but August saw tight supply and rising prices due to expectations of export tax rebates, overseas plant maintenance, and domestic production schedule adjustments. New photovoltaic installations reached 223.25 GW from January to July, an 80% year-on-year increase.

Fourth-Quarter EVA Market Outlook: Ample Supply, Uncertain Demand, and Price Pressure

Fourth-quarter capacity expansion reinforces supply surplus: Effective capacity is projected to reach 3.54 million tons by end-2025. Key fourth-quarter developments include:

- Lianhong New Energy (20.290, -0.83, -3.93%) plans to achieve mid-construction for its 200,000-ton facility by end-September and commence mass production in October; Zhejiang Petrochemical plans mid-October commissioning with shipments targeted for December; Sinochem Quanzhou's 40,000-ton expansion undergoes maintenance and retrofitting in early December. Hanwha Korea's 300,000-ton facility commenced trial runs on September 25, achieving mass production in October with supplies to China. October supply may increase, while Hanwha's 300,000-ton output in November will significantly impact foam material supply