Polycarbonate Industry Sees Remarkable Recovery in Q1 2026, Supply-Demand Restructure Boosts High-Quality Industrial Upgrading

BEIJING, March 23, 2026 /PRNewswire/ — Entering 2026, China’s polycarbonate (PC) industry has emerged from the long-standing dilemma of overcapacity and sluggish profits, embracing a booming upward cycle driven by a reshaped supply-demand landscape. The sector has witnessed a sharp rebound in profitability in the first quarter, with accelerated progress in high-end and green transformation, making it a standout segment in the domestic chemical new materials industry.

A pivotal shift has taken place on the supply side, as the industry has fully halted capacity expansion. Following years of rapid capacity growth, China’s PC production capacity is approaching 4 million metric tons, accounting for nearly half of the global total. Previously, rampant overcapacity of low-end products had trapped the industry in cutthroat price competition for a long time. Notably, no new PC production facilities are scheduled to launch in China in 2026, bringing capacity growth to a standstill. Coupled with optimized operation of existing plants, the capacity utilization rate has steadily improved, effectively easing market supply pressure and reversing the long-standing oversupply situation.

Diversified demand drivers have underpinned the market recovery, with the new energy sector emerging as the core growth engine. Amid the continuous rise in new energy vehicle penetration rate, PC has seen surging demand in applications such as battery pack casings, automotive optical components and interior structural parts, thanks to its advantages of light weight, high strength and flame retardancy. Meanwhile, demand from traditional sectors including electronic appliances, optical sheets and medical consumables has steadily recovered. Domestic PC products, supported by cost advantages, are rapidly expanding into overseas markets in Southeast Asia, South America and other regions, with rising export volumes further broadening market space. Industry estimates suggest that China’s PC demand will maintain a year-on-year growth rate of around 4% in 2026, sufficient to absorb existing production capacity effectively.

Profitability has improved drastically, putting the industry on a sound development track. As of early March, the average gross profit margin of domestic PC production has exceeded 1,100 yuan per metric ton, surging nearly 20 times compared with the same period last year, while product prices have rebounded steadily to a two-year high. On one hand, the loose supply of raw material bisphenol A has kept corporate cost pressures under control, giving integrated enterprises with full industrial chain layout a distinct profit edge. On the other hand, the market has bid farewell to vicious price competition, and enterprises are shifting their focus to technological research and development. The localization of high-end special PC, non-phosgene green PC, bio-based PC and other premium products has accelerated, gradually breaking the foreign technological monopoly.

Industry insiders noted that the PC sector is currently transitioning from scale expansion to quality improvement. Going forward, the industry will continue to focus on breakthroughs in high-end grades, green process upgrading and overseas market expansion to shake off low-end competition and achieve high-quality development, with the overall industry prosperity expected to remain high throughout the year.