[Introduction] In January 2026, the Ministry of Finance and the State Taxation Administration announced the cancellation of VAT export tax rebates for photovoltaic products effective April 1. As the core raw material for photovoltaic films and the primary encapsulation material for solar modules, EVA film accounts for over 50% of global EVA demand. This policy adjustment will profoundly impact the EVA industry through three pathways: cost transmission, demand restructuring, and technological iteration. Short-term pain coexists with long-term upgrading opportunities.

Short-term: “Rush exports” drive demand, with prices rising before falling

According to analysis by China Plastics Online, the policy's nearly three-month buffer period has directly triggered a concentrated release of short-term demand across the PV supply chain. Overseas customers, anticipating a roughly 9% price increase for modules after April, have rushed to place advance orders and stockpile inventory. Domestic module manufacturers, aiming to secure tax rebate benefits, are ramping up production and deliveries to full capacity, with a concentrated customs declaration surge expected in January-March. This trend directly impacts upstream suppliers: photovoltaic film manufacturers must simultaneously increase EVA procurement to meet module production demands, driving short-term supply-demand tightness for photovoltaic-grade EVA.

Market performance indicates that prices are likely to rise further as January-March demand peaks, compounded by maintenance at some peripheral facilities. However, this demand growth is temporary. If overseas end-user absorption capacity fails to expand accordingly, a temporary “demand vacuum” may emerge in April, putting downward pressure on EVA prices. Additionally, the pace of EVA capacity expansion will alleviate short-term tightness. By the end of 2025, China's effective EVA capacity reached 3.54 million tons, with further new capacity set to come online in 2026. This supply elasticity is sufficient to offset short-term demand spikes.

Medium to Long Term: Industry Consolidation Reshapes Demand Structure; Technology and Cost Become Core Competitiveness

(1) Demand Side: Shift from “Volume Growth” to “Quality Enhancement,” Increasing Share of High-End Materials

The termination of tax rebates marks the end of the “subsidy-driven” era in the photovoltaic industry. The low-price competition model is unsustainable, compelling companies to shift from “price wars” to “value wars.” This transformation directly impacts EVA demand structure: On one hand, to enhance product premiums, module manufacturers will increasingly favor photovoltaic films with high conversion efficiency and strong weather resistance. This will drive EVA producers to upgrade the performance of their photovoltaic-grade products, leading to a sustained increase in the market share of high-end photovoltaic EVA. On the other hand, increased industry concentration will expand procurement volumes for leading module manufacturers, concentrating EVA market orders among top suppliers. EVA producers with technological advantages (such as Shenghong Group and Lianhong New Energy) are expected to benefit from this consolidation.

Simultaneously, a potential slowdown in photovoltaic export growth may temper the overall expansion pace of EVA demand. However, stable growth in domestic photovoltaic installation demand (new installations from January to July 2025 increased by 80% year-on-year) and the expansion of export channels to Belt and Road countries will partially offset the impact of declining overseas demand, supporting stable EVA market operations.

(2) Supply Side: Overcapacity Pressure Intensifies as Industry Enters “Quality and Efficiency Enhancement” Phase

The EVA industry is in a capacity expansion cycle, with a supply-loose pattern expected to persist long-term. The demand restructuring triggered by the cancellation of PV export rebates will further intensify differentiation within the EVA sector: Enterprises with cost advantages and technological barriers can withstand price pressures through scaled production and premium pricing for high-end products. Conversely, technologically lagging SMEs producing only low-end commodity materials will face challenges of insufficient capacity utilization and compressed profit margins, potentially accelerating industry consolidation.

In summary, the impact of the PV export tax rebate cancellation on the EVA market essentially reflects the industry's transition from “scale expansion” to “high-quality development.” In the short term, the “export rush” will drive temporary demand growth for EVA, though supply-demand mismatches may trigger price volatility. Over the medium to long term, the coexistence of demand structure upgrades and supply surplus pressures will propel the EVA industry into a profound adjustment phase focused on “enhancing quality and efficiency.”

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