Polyaluminium Chloride Price Index 2026: China Production Trends

Solid polyaluminium chloride (industrial grade, content ≥28%) was trading at approximately 1,720 RMB/MT (approximately USD 237–242/MT) in the Chinese domestic market in January–February 2026, according to SunSirs commodity price data. The primary driver holding prices flat is a surplus of domestic supply against subdued post-Lunar New Year demand, with feedstock hydrochloric acid prices remaining weak at approximately 107–110 RMB/MT. Prices are expected to consolidate through Q1 2026, with a moderate upward bias possible in Q2 as municipal water treatment tenders resume and operating rates lift.

PAC Prices in Q1 2026 — Current Levels and Recent Movement

China's domestic PAC market entered 2026 in a state of flat equilibrium. Solid PAC at industrial grade (≥28% Al₂O₃ equivalent) registered 1,711.67 RMB/MT on 1 January 2026 and climbed just 0.49% to approximately 1,720 RMB/MT by 30 January, per SunSirs. By the end of February, prices were unchanged from January's close, confirming consolidation rather than any directional move.

On international export benchmarks, the ChemAnalyst PAC Price Index placed Chinese FOB values at approximately USD 239–240/MT in December 2025, representing a modest 1.7% quarter-over-quarter gain in Q4 2025 driven by export clearing activity. In Q3 2025, APAC China PAC averaged USD 235.33/MT FOB, a 1.94% decline from Q2's USD 254/MT average. The Q2 peak was itself the result of a 7.3% quarterly rise linked to export demand and pre-monsoon procurement across Southeast Asia.

The spread between Chinese FOB export pricing and North American CFR import pricing — approximately USD 115–120/MT — reflects freight costs, import duties, and the tighter logistics environment in the US market, where late Q4 spot availability tightened despite adequate overall import arrivals.

What Moved PAC Prices in Q4 2025 and Into Q1 2026?

Hydrochloric Acid — The Dominant Feedstock Signal

Hydrochloric acid (HCl) accounts for a significant share of PAC production cost and is the single most consistent price signal in the Chinese market. In 2025, the domestic HCl market averaged approximately 110 RMB/MT at the start of the year and declined to 107.50 RMB/MT by year-end, a 2.27% annual decline, per SunSirs. Jiangsu Province is China's largest HCl production base, and the consistent oversupply in East China's chlor-alkali sector kept feedstock costs capped throughout the year.

In January 2026, HCl remained stable at approximately 107.50 RMB/MT, providing limited cost support for price increases. When HCl is weak, PAC producers face margin pressure but cannot easily push through price increases in an oversupplied domestic market. This cost-side signal reinforces the flat price environment.

Aluminium Hydroxide — The Second Key Input

Aluminium hydroxide (Al(OH)₃) is the second primary feedstock for acid-dissolution process PAC production. ChemAnalyst's December 2025 market data confirmed that aluminium hydroxide prices were stable in Q4 2025, providing no cost-push pressure in China. The stable feedstock quotations for both HCl and aluminium hydroxide meant that PAC producers had neither the cost justification nor the market conditions to push prices higher in Q4 2025 and early Q1 2026.

Producer Operating Rates and Inventory Levels

Chinese PAC producers ran at approximately 71% average capacity utilisation in Q4 2025, according to ChemAnalyst data, keeping supply adequate but not causing a glut severe enough to break prices downward. Inventories were reported at approximately 18 days of forward sales, a level that indicates balanced-to-loose supply without triggering panic selling. The Spring Festival period in late January 2026 temporarily reduced downstream procurement activity, as municipal and industrial buyers shifted to as-needed purchasing rather than building stock. This seasonal effect kept February consolidation intact.

Current Market Balance — Adequate Supply, Recovering Demand

The Chinese PAC market's supply-demand balance in early 2026 is best described as modestly long. Supply from Henan, Jiangsu (Yixing), and Shandong clusters is running normally, with no significant plant outages or force majeure events reported. Key producers including Henan Fengbai Industrial, Yixing Bluwat Chemicals, Henan Lvyuan Water Treatment Technology, and Weifang Zhongqing Fine Chemical are maintaining normal operating schedules.

Demand is in the early stages of seasonal recovery. China's 14th Five-Year Plan for water ecological environment protection continues to drive baseline municipal procurement: the plan mandates upgrading urban sewage treatment plants, treating black and odorous water bodies, and expanding sewage collection pipeline networks by approximately 80,000 km between 2021 and 2025. These projects generate recurring annual tender demand that typically accelerates in Q2 after the slow post-Lunar New Year period.

Export demand is providing a partial absorption mechanism. ChemAnalyst noted that export volumes cleared Chinese output in December 2025 even as domestic municipal procurement completed its seasonal cycle. Key export destinations include South Korea, the United Kingdom, Southeast Asia (Indonesia, Vietnam, the Philippines), and selectively the Middle East. However, overseas buyer resistance to price increases limited any upside from export interest in Q4 2025.

PAC Price Direction — What Comes Next for 2026?

Near-Term Outlook (Q1–Q2 2026): Consolidation Followed by Moderate Recovery

The base case for Q1 2026 is continued price consolidation in the 1,700–1,750 RMB/MT range domestically, with FOB export values holding approximately USD 237–245/MT. The primary supporting factors are: downstream demand resumption as industries return to full operations post-Spring Festival, gradual recovery in municipal project tendering, and potential stabilisation or modest strengthening of HCl as East China's chlor-alkali sector adjusts output.

A price lift of 3–6% from current levels is plausible in Q2 2026 if municipal tenders in Henan, Jiangsu, and Shandong accelerate as expected, and if pre-monsoon export demand from Southeast Asia replicates the Q2 2025 pattern. The Q2 2025 seasonal uplift was 7.3% quarter-over-quarter, driven precisely by these twin effects.

Upside Risk — Infrastructure Acceleration and Export Demand

China's continuing investment in urban wastewater treatment infrastructure represents the structural upside catalyst. If municipal tender volumes front-load into Q2 2026 ahead of summer construction deadlines, domestic absorption could tighten available supply faster than producers can ramp. Simultaneously, Southeast Asian and Middle Eastern buyers operating under tightening discharge regulations are expanding PAC procurement under multi-year contracts. The Asia-Pacific water and wastewater treatment market was valued at approximately USD 176 billion in 2025 and is projected to grow at 7.7% annually through 2035, per Tradeasia market intelligence, which underpins sustained export pull for Chinese-origin PAC.

Downside Risk — Overcapacity and Weak Domestic Tenders

The structural concern in the Chinese PAC market is persistent overcapacity relative to domestic demand growth. China accounts for more than 40% of global PAC consumption volume but also dominates production, meaning any slowdown in infrastructure spending — whether from local government budget tightening or project delays — leaves producers unable to clear volume except through export price concessions. If China's domestic municipal tenders are delayed into H2 2026 due to fiscal consolidation at the local government level, the 71% operating rate could erode further and export FOB prices could soften toward USD 225–230/MT.

Procurement Recommendation for PAC Buyers in 2026

Buyers in Southeast Asia and South Asia sourcing Chinese PAC should treat the current Q1 2026 window as a favourable procurement period. Prices are at or near the bottom of the 12-month cycle, feedstock costs are soft, and Chinese producers are motivated to move export volumes ahead of the Q2 seasonal tightening. Locking in term contract pricing for H1 2026 volumes at current FOB levels of USD 237–245/MT provides meaningful downside protection against the Q2 seasonal uplift that materialised at +7.3% in 2025.

For buyers in North America, the CFR pricing of approximately USD 359/MT reflects the logistical premium of sourcing from China. Evaluating dual-source strategies — including Indian producers such as Kanoria Chemicals & Industries and Gujarat Alkalies and Chemicals — is advisable for buyers who experienced supply disruptions from Asian port congestion events in Q3 2025.

Spot purchasing at current levels is appropriate for immediate needs. For volumes covering Q2–Q3 2026, index-linked or quarterly-priced term contracts are preferable to pure spot exposure, given the seasonal demand uplift that has historically materialised in Q2 across Asian markets.

Conclusion: Key Signals and Buyer Action Steps

Polyaluminium chloride prices in China entered 2026 stable and range-bound, with solid domestic PAC at approximately 1,720 RMB/MT and FOB export values near USD 239–240/MT. Feedstock HCl remains soft at approximately 107.50 RMB/MT, producer utilisation is running at ~71%, and inventories are modest but adequate. Demand is in seasonal recovery, with municipal infrastructure tendering expected to accelerate in Q2 2026 under China's 14th Five-Year Plan mandates.

Three buyer action steps for Q1–Q2 2026:

1. Lock in H1 2026 term contract volumes now, while Chinese FOB offers remain at the seasonal floor (~USD 237–245/MT) and producers are motivated to clear export inventory before domestic demand recovers.
2. Monitor HCl pricing in Jiangsu Province as the leading indicator. A sustained HCl price recovery above 115–120 RMB/MT would signal tightening cost floors and provide early warning of price increases with a 4–6 week lag to PAC finished goods.
3. Assess dual-source exposure across Chinese and Indian origin suppliers. Indian exporters — supported by firm Southeast Asian and Middle Eastern demand and tighter post-May inventory positions — offer an alternative pricing benchmark and supply security buffer for buyers who cannot absorb the logistics risk of single-origin dependence on China.

Frequently Asked Questions

What is polyaluminium chloride (PAC) currently trading at in China?

Solid PAC at industrial grade (≥28% Al₂O₃) was priced at approximately 1,720 RMB/MT (~USD 237–242/MT) in the Chinese domestic market in January–February 2026, per SunSirs. On an FOB export basis, prices were approximately USD 239–240/MT in December 2025 per ChemAnalyst, with prices broadly flat since Q3 2025.

What are the main factors driving PAC prices in China in 2026?

Three factors are currently dominant. First, hydrochloric acid pricing in Jiangsu and East China's chlor-alkali belt sets the primary cost floor; HCl has been flat at approximately 107–110 RMB/MT through early 2026, capping producer cost escalation. Second, domestic demand seasonality — particularly the post-Lunar New Year slowdown followed by Q2 municipal tender acceleration — creates consistent intra-year price cycles. Third, export demand from Southeast Asia and the Middle East provides a secondary clearing mechanism that tightened and supported prices during Q2 2025 before softening in Q3.

Is PAC price going up or down in 2026?

The base case is flat-to-moderately-higher through mid-2026. Prices are expected to hold near 1,700–1,750 RMB/MT domestically in Q1 before a possible 3–6% seasonal uplift in Q2 as municipal project tendering accelerates and pre-monsoon export demand reactivates. The key downside risk is continued local government fiscal tightening delaying Chinese infrastructure tenders, which would keep producer utilisation below 71% and sustain export price pressure.

What is the best time of year to buy PAC from China?

The seasonal low in China-origin PAC pricing typically falls in Q1, specifically January–February, when post-Lunar New Year demand is weakest and producers are motivated to place export volumes. The seasonal high occurs in Q2, driven by domestic infrastructure project acceleration and pre-monsoon Southeast Asian procurement. Buyers targeting lowest-cost windows should target Q1 term contract execution for Q2–Q3 delivery.

Should PAC buyers use term contracts or spot purchasing in 2026?

For buyers in Southeast Asia and South Asia covering six months or more of forward volume, term contracts executed in Q1 2026 at current FOB levels are preferable to full spot exposure. The Q2 2025 seasonal uplift of 7.3% demonstrates that buyers relying entirely on spot in the April–June window face material price risk. Buyers with smaller or more variable volume requirements can supplement term coverage with spot, but the current Q1 window — with soft feedstocks and motivated exporters — is the most favourable procurement moment in the annual price cycle.

How does hydrochloric acid pricing affect PAC prices in China?

HCl is a primary raw material in PAC production, reacting with aluminium hydroxide or alumina to form the polymeric aluminium chloride complex. HCl price moves typically pass through to PAC finished goods within four to six weeks. With HCl at approximately 107.50 RMB/MT in early 2026 — near the lower end of its recent range — production cost pressure is limited. A recovery in HCl toward 120–130 RMB/MT, driven by tightening chlor-alkali output or stronger downstream demand for chlorine derivatives, would be the primary catalyst for a cost-push PAC price increase in H1 2026.