2026 Outlook Report for the General Plastics Industry

December 25th News

In the past 2025, influenced by factors such as foreign trade policy differences among countries and recurring geopolitical rifts, the bulk plastic market remained complex and volatile. At the same time, China's plastic industry is in a phase of capacity expansion cycle transition. Against the backdrop of a long-term slowdown in the global economy, whether China's general plastic industry can make further progress and whether the market trend can stabilize and rebound. This forecast report will provide you with an outlook on the direction of China's general plastic industry in 2026.

Under the category of general-purpose plastics, the main products include polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), polystyrene (PS), and acrylonitrile-butadiene-styrene copolymer resins (ABS). The core advantage of their "general" name lies in their wide application, low cost, and large production volume. Whether as necessities of daily life, in industrial production, or as financial products, they hold an irreplaceable and significant position, thus they are also referred to as major plastic varieties in China.

China's Landscape

• A major production and consumption country in China

China’s plastic market boasts enormous consumer demand. Since the beginning of the new century, China’s plastics industry has achieved leapfrog development, with significant advances in both product variety and output volume. In particular, over the past five years, statistics show that in 2020, China’s total output of primary-form plastics exceeded 100 billion tons for the first time. From 2020 to 2024, the average annual growth rate remained above 5.14%, enabling China to maintain its position as one of the world’s major plastic production bases, accounting for roughly one-third of global output. Moreover, in the recently concluded year 2025, the annual output growth reached a groundbreaking level of over 11%, surpassing the initial forecast.

• Import dependency continues to decline

As China’s production capacity and output continue to rise, the country’s demand gap for plastics has been gradually filled, and the degree of import dependence has declined year by year. In the first 11 months of 2025, China’s cumulative import volume of primary-form plastics reached 24.281 million tons, marking a new high despite a 7.8% year-on-year decline. The cumulative import value totaled US$36.1623 billion, down 9.2% from the previous year. With newly added production capacity accelerating its substitution for traditional imports, coupled with tariff policies and trade tensions that are forcing a reduction in the proportion of externally sourced materials, it has become certain that China’s primary-form plastics imports will remain in negative growth for the fifth consecutive year. Based on this ongoing negative growth trend, China’s full-year import volume of primary-form plastics in 2026 is likely to stay below 25.3588 million tons. However, among imported categories, the domestic substitution rate is relatively high for basic-grade plastics, while it remains low for high-end grades.

• One dominant player with many strong competitors downstream

Downstream Consumption Distribution of General Plastics

From the perspective of downstream consumption structure in China, in the first three quarters of 2025, China's plastic processing enterprises produced a total of 59,373,000 tons of plastic products. Among them, the production of films reached 13,935,000 tons, with the share of consumption decreasing by 0.5% to 23.5%; followed by daily-use plastic products at 3,869,000 tons, with the proportion also decreasing by 0.5% to 6.5%. The remaining nearly 70% of the plastic products market was occupied by artificial leather, plastic weaving, building materials, and other plastic products. Notably, the sudden rise in demand from the new energy vehicle, consumer electronics, and smart home sectors has driven the growth of the specialized material market. The overall consumption distribution shows a pattern of one dominant player and multiple strong players, with the industry's consumption generally healthy and stable. The demand side in China has shown a certain stabilizing effect.

Challenges and Opportunities

• Demand growth potential and rapid industry expansion in China

Although the industry has been significantly affected by various factors in recent years, the demand for general-purpose plastics downstream remains resilient despite fluctuations. According to relevant estimates, the apparent consumption growth rate of the plastic industry in China is expected to be around 6% in 2025. The steady growth in the consumption of traditional plastic products and the development of emerging plastic industries will bring significant growth potential to China's general-purpose plastic industry.

Commissioning rate of general-purpose plastics in China over the past two years

Meanwhile, China's general plastic production capacity is still in a state of rapid expansion. Currently, China is entering the second expansion cycle for the plastics industry from 2026 to 2029. According to a summary of relevant investment and construction plans, except for PVC, the expansion of PP, PS, and ABS in 2026 will all be more than 10%, with PE reaching as high as 27.31%. It is expected that the new capacities of various types by the end of the year will mostly be less than the 2025 full-year commissioning capacity, indicating that the expansion of China's plastics industry is experiencing a transition from "rapid and aggressive growth" to "stable growth."

Although the pace of expansion has relatively slowed down, the performance of the plastic market in recent years shows that the growth rate of China's general plastic market demand does not match well with the capacity release. The imbalance between supply and demand in China is becoming increasingly evident, and the Chinese plastic market is entering a "deepening period of overcapacity," with the contradiction of mismatched supply and demand at risk of becoming long-term. It can be seen that the opportunities and challenges for the future plastic market in terms of supply and demand lie in the competition between the release of demand potential and the supply of goods. It is expected that market competition will become even more intense.

• Expansion of export markets and fluctuations in the foreign trade environment

As the number of overseas trade windows for domestically produced plastics continues to grow, an increasing number of plastic enterprises are choosing to further tap into emerging overseas markets. According to statistics, China’s exports of plastic products reached 78.021 billion U.S. dollars in the first three quarters of 2024 alone, and totaled 100.809 billion U.S. dollars for the entire year of 2023—nearly tripling compared to ten years ago, firmly establishing China among the world’s major plastic-exporting countries. This transformation underscores the remarkable progress made by domestic plastics manufacturers in cost control, product variety coverage, and supply-chain integration. This wave of export expansion is driven both by China’s surplus production capacity seeking overseas outlets and by the infrastructure upgrades under the Belt and Road Initiative. Additionally, it benefits from multiple favorable factors, including the shift of the Southeast Asian home appliance and automotive industry chains, as well as declining sea freight costs, all of which have significantly enhanced China’s regional competitiveness. Expanding into overseas markets and riding on the coattails of growth in foreign economies undoubtedly represents a new blue ocean opportunity for China’s plastic enterprises.

The factors causing the decline in China's plastic products export value in 2025 include not only objective reasons such as reduced external demand, but also the constraints imposed by the rise of trade protectionism. Although in the second half of 2025, China and the U.S. agreed to extend the suspension of additional tariffs for one year, the downward pressure on China's exports to the U.S. continues to increase under the existing high tariff levels of nearly 30-40%. Data from the first 11 months show that China's plastic products exports to the U.S. decreased by 18.3% year-on-year. Additionally, tariff barriers like the European "carbon surcharge," which use environmental protection as a pretext for trade protection, have not diminished their impact on plastic foreign trade. The uncertainty of tariff policies is expected to persist in the long term. The plastic industry must overcome these difficulties and ensure the smooth overseas sales of domestically produced plastics.

• Industrial Upgrading and Remote Cost Factors

Since 2016, China's general plastics industry has entered a new stage of high-quality development. Plastic polymer enterprises have begun to pay more attention to extending into the upstream raw materials sector and expanding into the downstream product processing sector, with the process of industrial integration accelerating continuously. Currently, the proportion of integrated production of major plastic varieties in China has reached as high as half, and the overall quality of Chinese plastic enterprises has been improving year by year. This model of industrial integration has advantages such as reducing production costs and enhancing the ability of enterprises to withstand risks.

Oil and gas are important raw materials and energy sources for the general plastics industry. Industrial integration has brought cost reduction and efficiency improvement, while also more deeply binding the plastics industry with the distant upstream market. However, China is constrained by its resource endowment of scarce oil and gas, making the cost pressure in the general plastics industry largely dependent on imported oil and gas. In recent years, due to the disruption caused by international geopolitical tensions, market concerns have fluctuated, and energy prices have been highly volatile. Against the backdrop of recurring geopolitical disputes in the Middle East and Europe, the production and sales of bulk plastics in China in 2026 face even greater uncertainty.

Outlook and Forecast

• Price forecast

According to the commodity market analysis system, by the end of 2025, the prices of China's five major general-purpose plastics have fallen across the board, with a significant price decrease compared to the beginning of the year. The current general-purpose plastic index is at 631 points, breaking below the five-year low of 653 points on April 6, 2020. Although deepening consumption in traditional plastic products is an important growth point for China's general-purpose plastics, the performance of plastic prices in 2025 also reflects the insufficient demand elasticity in traditional fields. At the same time, the supply environment with a large base capacity in China is still developing, and the lag in consumption growth is likely to lead to a continued decline in unit prices. Therefore, it is expected that the market in 2026 will not see a significant recovery, and prices will remain relatively low.