In 2025, the polyurethane industry underwent profound transformation and restructuring, driven by both global economic realignment and the wave of green transition.

Mergers and Acquisitions

(1) Europe Emerges as Integration Hub, Global Landscape Undergoes Profound Adjustment

ADNOC's Acquisition of Covestro Finally Sealed

After three years of negotiations, ADNOC's acquisition of Covestro was finalized, marking the industry's most significant M&A event of the year. On December 10, 2025, the transaction—where Abu Dhabi National Oil Company (ADNOC) acquired Covestro through its international investment subsidiary XRG—completed closing following all regulatory approvals. Valued at €11.7 billion with total debt of €14.7 billion, this marks ADNOC's largest acquisition to date. To secure EU approval, ADNOC committed to amending its articles of association to remove unlimited state guarantees and share Covestro's sustainability patents with market participants—commitments valid for 10 years. This acquisition marks ADNOC's successful entry into the high-performance chemicals and advanced materials sector, demonstrating its capability to execute complex cross-border transactions.

Concurrent with the acquisition, Covestro actively advanced its own business optimization. In 2025, Covestro completed two significant acquisitions: In June, it acquired Swiss multilayer film manufacturer Pontacol, adding highly specialized cast and blown film technologies to strengthen its film business footprint in critical sectors like healthcare and transportation; In the same month, it acquired Vencorex's HDI derivatives production facilities in Thailand and the United States (U.S.: 12,000 tons/year HDI derivatives capacity; Thailand: 12,000 tons/year HDI derivatives capacity), further enhancing its global supply chain for specialty isocyanates.

Vencorex Files for Bankruptcy! HDI-Related Businesses Acquired by Wanhua Chemical and Covestro

Amid the energy crisis, European polyurethane enterprises face mounting survival pressures, with asset sales and business restructuring becoming common strategies. PTT Global Chemical's subsidiary Vencorex entered judicial restructuring due to operational difficulties, with its core HDI-related businesses being spun off for acquisition: In April 2025, Wanhua Chemical acquired Vencorex's French specialty isocyanate business through its Hungarian subsidiary Bosco Chemical, including 79,000 tons/year of HDI monomer capacity and related production facilities, with a commitment to invest €19 million by 2027. In August, Covestro took over its HDI derivative production sites in Thailand and the United States.

Dow, LyondellBasell, INEOS Accelerate Polyurethane Business Adjustments

Dow announced the permanent shutdown of its 94,000-ton/year polyether polyol unit at the Tertre plant in Belgium by the end of Q1 2026, citing weak European market demand, structural supply-demand imbalances, and import pressure from Asia; LyondellBasell and Covestro jointly decided to permanently shut down the propylene oxide/styrene monomer (PO/SM) production facility at the Maasvlakte plant in the Netherlands. This facility produced 300,000 tons of propylene oxide and 635,000 tons of styrene annually but faced persistent losses due to global structural supply-demand imbalances and high production costs in Europe. INEOS announced the indefinite shutdown of its European propylene oxide (annual capacity 210,000 tons) and propylene glycol (PG) production due to high costs and market oversupply. Operations will not resume even if chlorine supply is restored.

In November 2025, COIM completed its acquisition of Notedome, a UK-based polyurethane elastomer company. Earlier in May, COIM USA, a subsidiary of the COIM Group, acquired assets in New Boston, Texas, from Palmer International. These assets include a new bio-based polyol production line manufactured from rapidly renewable cashew nut shell oil.

(II) Domestic Operations Accelerate Adjustments

Domestic enterprises' supply chain integration has not proceeded smoothly. In April 2025, Huafeng Chemical's proposal to acquire 100% equity in affiliated companies Huafeng Synthetic Resin and Huafeng Thermoplastics for RMB 6 billion was rejected at the shareholders' meeting. This transaction aimed to achieve upstream-downstream synergy in the polyurethane industry chain but failed due to related-party transaction concerns.

Foreign enterprises are adjusting their China footprints. South Korea's Taekwang Group decided to fully shut down its spandex plant in Changshu, China (annual capacity: 27,000 tons) and withdraw from the Chinese market. Additionally, its investment project for a second spandex plant in Ningxia, China (108,000 tons/year) has been suspended.

Additionally, BASF plans to complete the integration of its Asian polyethylene terephthalate (PolyTHF®) operations into its Shanghai Caojing production base in China by 2026, while ceasing PolyTHF® production at its Ulsan chemical site in South Korea. Concurrently, the company announced it will begin offering advanced PolyTHF® 1800 production technology licensing to customers and partners. PolyTHF® is a key raw material for producing spandex elastic fibers, widely used in textiles such as swimwear, sportswear, underwear, shirts, and stretch denim.

Additionally, in December, BASF introduced a new amine catalyst, Lupragen® N 208, for polyurethane (PU) foam production. Manufactured at BASF's Ludwigshafen integrated site, it will be sold globally under the Lupragen brand.

New Product Launches

(1) Breakthrough in Green Raw Materials Accelerates Large-Scale Application

Landmark progress in bio-based polyurethane materials. Algenesis Labs introduced the world's first 100% bio-based, non-phosgene isocyanate Bio-Iso™, utilizing plant-derived dicarboxylic acids without using highly toxic phosgene throughout the process. Combined with its proprietary bio-based polyester polyol Soleic®, it enables the production of 100% bio-based TPU. This product meets ASTM D6866-24 standards, offering both exceptional durability and recyclability. Huafeng Ruixun introduced its bio-based PTMEG product, CovationBio® bioPTMEG, utilizing furfural extracted from corn cobs as raw material. This significantly reduces greenhouse gas emissions while matching the performance of petroleum-based products. Its 500,000-ton/year bio-based PTMEG project in Qidong, Jiangsu, is under construction, with the first phase of 50,000 tons expected to commence production in Q1 2026. Storopack introduced its new polyurethane foam packaging material FOAMplus® 7008-BIO, with the B-component of this polyurethane foam containing over 83% bio-based carbon content as measured.

The world's largest bio-based BDO plant has commenced operations in Iowa, USA. Operated by Qore, a joint venture between Cargill and HELM, it produces 65,000 tons of bio-based BDO annually using corn sugar fermentation technology, reducing greenhouse gas emissions by 90%. The facility will supply BASF and Lycra® on a long-term basis. South Korea's Hyosung Group has secured licensing for the bio-based BDO process and plans to invest $1 billion in Vietnam to build a 200,000-ton/year bio-based BDO plant. The first phase of 50,000 tons is expected to start production in the first half of 2026, with subsequent development of a vertically integrated bio-spandex production system from raw materials to fibers.

The industrialization of CO₂-based materials is accelerating. Changhua Chemical has pioneered the application of CO₂-based polyether in continuous flexible foam pilot production. The resulting CO₂-based foam exhibits hydrolysis resistance, yellowing resistance, and excellent mechanical properties, making it suitable for automotive interiors and home furnishings. Its subsidiary is constructing a phased project for CO₂-based polyether and high-performance polyols. with the first phase of the 80,000-ton/year CO₂-based polyether facility expected to commence operations in Q4 2025. Upon full completion, the project will achieve an annual capacity of 1.06 million tons. Anhui Putan's first phase of the 300,000-ton/year CO₂-based polycarbonate polyol project has officially commenced production, establishing the world's largest CO₂-based polyol facility. It fixes approximately 180,000 tons of CO₂ annually, with products widely applied across construction, automotive, and other sectors.

In April 2025, Sun Yat-sen University and Zhuhai Zhongguan Petrochemical Co., Ltd. signed an agreement for the “Technology Transfer Project for CO₂-Based Polycarbonate Diol Synthesis.” Both parties will jointly advance industrial-scale synthesis technology for CO₂-based polycarbonate diols, aiming to establish a 300,000-ton-per-year industrial production line at Zhuhai Zhongguan.

Recycling and regeneration technologies achieve multiple breakthroughs. Cirql® launched the Cirql rTPU50 foamed midsole, utilizing 50% GRS-certified post-industrial recycled TPU produced via supercritical foaming technology, enabling full recyclability. Xingcai Industrial's RePUra™ technology, developed with Taiwan's Industrial Technology Research Institute, chemically depolymerizes mixed textile waste into waterproof and breathable polyurethane film, enabling a “textile-to-textile” circular model. Pearl Polyurethane utilizes a sugar fermentation process to convert waste PET into polyols for rigid polyurethane foam, with initial commercial orders already delivered.

(2) Performance Upgrades for Specialty Materials and Expanding Application Scenarios

The portfolio of specialty isocyanate products continues to expand. Wanhua Chemical has introduced the Tolonate™ aliphatic isocyanate and Easaqua™ hydrophilic isocyanate series, encompassing various monomers and derivatives such as HDI and IPDI. These products offer outstanding durability, weather resistance, and self-emulsifying properties, further enhancing service capabilities in coatings, adhesives, and other fields.

Technological innovation in end-use materials remains vibrant. Loomia and AFFOA jointly launched the Gentoo flexible heater, crafted from TPU material. It maintains optimal performance even in ultra-low temperatures of -60°C, combining breathability and stretchability, making it suitable for outdoor gear and similar applications. First Graphene completed its first industrial-scale delivery of graphene-reinforced TPU masterbatch for safety shoe soles, significantly enhancing material durability under harsh conditions. Henkel introduced Technomelt PUR 6260 ECO, a bio-based polyurethane hotmelt adhesive using over 60% renewable and recycled raw materials, reducing its carbon footprint by more than 40% and suitable for temperature-sensitive substrates like automotive interiors.

(3) Production Equipment Iteration and Upgrades: Dual Enhancement in Efficiency and Environmental Performance

Innovative optimization of production processes and equipment emerged as industry highlights. B.IRD Machinery introduced an infrared rotary drum dryer, reducing TPU pellet drying time from hours to 10–30 minutes while cutting energy consumption by 70%. This effectively prevents material degradation and uneven drying issues. Henke Group developed PUR composite spray molding technology to create a floating wave energy converter hull. This hull features a sandwich structure with polyurethane foam as the core material, combining lightweight properties with high durability.

Hot Topics

(I) Domestic Capacity Expansion Accelerates, Core Raw Material Layout Picks Up Pace

Capacity expansion for key polyurethane raw materials is accelerating. Wanhua Chemical's Fujian 1.5 million tons/year MDI technical upgrade and capacity expansion project received environmental impact assessment approval, adding 700,000 tons/year of capacity. Expected to be completed in Q2 2026, Wanhua's global MDI capacity will reach 4.5 million tons/year, further solidifying its global leadership position. Hualu Hengsheng's Jingzhou base announced an EIA notice for its 300,000-ton/year TDI project, with a total investment of RMB 5.488 billion. The project includes supporting facilities for 360,000 tons/year DNT, 230,000 tons/year TDA, and 300,000 tons/year TDI, further enhancing its chemical new materials industrial chain. Lianhong Gelun achieved successful first-time startup of its 240,000-ton-per-year polyether polyol facility. Utilizing its independently developed continuous process technology, the products serve diverse sectors including home furnishings and automotive applications. Longhua New Materials commenced operations at its 330,000-ton-per-year polyether polyol expansion project. The output includes high-activity flexible foam polyether and polyether for CASE applications. Following this expansion, the company's total polyether product capacity reaches 1.29 million tons per year. Asahi Kasei Fine Chemicals (Nantong) Co., Ltd. completed its relocation within the Nantong Economic and Technological Development Zone, holding a completion ceremony on March 7, 2025. The company specializes in R&D and production of high-performance polyurethane coating curing agents (HDI polymers) and polycarbonate diols (PCD).

In October 2025, U.S. technology pioneer Novoloop® entered into a strategic partnership with Shanghai Huide Technology to jointly expand production capacity for Novoloop Lifecycled™ thermoplastic polyurethane (TPU). The two parties have signed a five-year contract manufacturing agreement.

(II) Increasingly Stringent Policy Oversight Drives Green Transition Pressure

Energy consumption and environmental standards continue to tighten. On May 1, 2025, the mandatory national standard GB 31830-2024 “Energy Consumption Limits for Toluene Diisocyanate (TDI) and Methylenediphenyl Diisocyanate (MDI) per Unit Product” officially took effect. It stipulates energy consumption limit grades and technical requirements, driving enterprises to phase out outdated production capacity and enhance energy efficiency levels. Facing pressure to phase out chlorohydrin-based propylene oxide capacity, Binhai Group's “Calcium-Based Saponification Process for Chlorohydrin-Based Propylene Oxide” passed expert review. This innovation reduces fresh water consumption per unit product to below 10 tons and waste residue generation to under 95 kilograms, preemptively meeting national policy requirements and providing a replicable solution for the industry's green transformation.

Breakthroughs in hazardous chemical transportation technology were achieved. The nation's first TDI hazardous goods rail tank container, jointly developed by CIMC Environmental Technology and major domestic chemical enterprises, successfully passed static strength and impact tests. Capable of carrying 30 tons, it significantly enhances safety compared to traditional transport methods while reducing packaging costs by over CNY10 million, accelerating the shift from road to rail for hazardous chemical transportation.

(3) Escalating International Trade Frictions Present New Challenges for Overseas Expansion

Domestic polyurethane products face trade barriers overseas. In September 2025, the U.S. Department of Commerce issued an affirmative preliminary anti-dumping determination on MDI originating from China, ruling a maximum dumping margin of 511.75%. In June, India initiated an anti-dumping investigation into TPU paint protection films originating from China. This marks the first overseas anti-dumping probe targeting this product, specifically covering surface/paint protection films manufactured using TPU. The investigation period spans from April 2021 to December 2024.

Summary

In 2025, amid profound shifts in the global economic and policy landscape, the polyurethane industry underwent comprehensive restructuring. In mergers and acquisitions, European firms accelerated asset optimization due to cost pressures, multinational giants expanded through strategic acquisitions, and domestic players sought breakthroughs via consolidation and overseas expansion. In technological innovation, green raw materials achieved scalable breakthroughs while recycling technologies flourished across multiple fronts, propelling the industry's transition from fossil-based to bio-based and circular models. Regarding industrial development, ongoing domestic capacity expansion clashed with international trade barriers, while regulatory policies compelled the sector to enhance energy efficiency.

Looking ahead, polyurethane industry development will increasingly prioritize sustainability, with bio-based materials, carbon dioxide resource utilization, and chemical depolymerization recycling emerging as core competitive battlegrounds. Global supply chains will undergo further restructuring, with regionalized production layouts becoming more pronounced. Persistent uncertainties in the international trade environment will require companies to navigate challenges through technological upgrades, product differentiation, and market diversification.

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