On January 30, Covestro announced the completion of a major capacity expansion project at its toluene diisocyanate (TDI) production facility within the Shanghai Integrated Site. This upgrade significantly increases annual TDI production capacity from 310,000 metric tons to 370,000 metric tons, representing a nearly 20% increase.

Located within the Shanghai Chemical Industry Park, the expansion required no additional land acquisition or major infrastructure investment. Instead, it achieved capacity breakthroughs through process optimization and equipment upgrades, reducing expansion costs, shortening construction cycles, and embodying green and efficient development principles. Following this expansion, the Shanghai integrated base surpasses Germany's Dormagen facility (300,000 tons) to become Covestro's largest global production site. This expansion significantly strengthens Covestro's TDI supply capacity in the Asia-Pacific region, precisely meeting the growing demand driven by the rapid development of downstream industries in the area.

In 2025, China's TDI industry achieved leapfrog development. The successful commissioning of Wanhua's new 360,000-ton-per-year capacity in Fujian laid a solid foundation for domestic TDI production growth. Concurrently, China's TDI export market demonstrated robust performance in 2025, driven by dramatic shifts in the global supply landscape. Overseas TDI capacity continued to contract as facilities operated by BASF, Japan's Tosoh, and others in Argentina and elsewhere shut down or reduced output, widening the global TDI supply gap. Against this backdrop, Chinese enterprises leveraged their stable production capacity and outstanding cost competitiveness to achieve a significant surge in exports. Export destinations concentrated in emerging markets such as Vietnam, Indonesia, Brazil, and India. Among these, ASEAN and South Asia regions, lacking local TDI suppliers, exhibited extremely high import dependency, becoming the primary markets for Chinese TDI exports.

Entering 2026, the imbalance between global TDI supply and demand intensified further, with the supply gap continuing to widen. In January 2026, global TDI production facilities undergoing maintenance accounted for 24% of total global capacity. Hanwha in South Korea and Wanhua Xinjiang successively announced temporary shutdowns of their facilities, while India's GNFC 67,000-ton facility also joined the temporary shutdown list. Combined with previous short-term shutdowns and reduced operations at TDI facilities of companies like Xinjiang Juli, Fujian Wanhua, and Gansu Yinguang, the global TDI supply side continues to tighten. Supply shortages directly drove price increases. Monitoring indicates domestic TDI prices have risen to 14,300–14,500 yuan/ton, with industry sentiment continuing to climb.

Notably, global TDI capacity expansion has stalled, with future supply growth almost entirely dependent on China. It is reported that only Covestro's Shanghai facility will add new capacity globally by 2026. Beyond that year, confirmed new TDI projects are extremely limited. Currently, only Hualu Hengsheng's 300,000-ton facility is in the planning stage, with a 24-month construction period scheduled from January 2026 to December 2027. This indicates that nearly all major global TDI projects under construction or planned in the coming years are concentrated in China. China will become the sole core source of new global TDI supply, with its capacity release schedule directly impacting the supply-demand balance and price trends in the Asia-Pacific and global TDI markets.

Overall, the capacity expansion at Covestro's Shanghai site epitomizes China's dominance in shaping the global TDI landscape. From robust export growth in 2025 to an expanding supply gap in 2026, followed by future capacity additions concentrated in China, the global TDI industry's center of gravity is accelerating its shift toward China. Moving forward, as new capacities like Huarun Hengsheng gradually come online, China will further solidify its position as the world's top TDI producer and exporter. However, it must also navigate potential challenges such as price volatility and overseas trade barriers.

As an integrated internet platform providing benchmark prices, on February 6th, the Business News Agency's benchmark price for TDI was 14,333.33 yuan/ton, an increase of 1.18% compared to the beginning of the month (14,166.67 yuan/ton).

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