After a three-month hiatus, polyurethane raw material MDI has once again triggered a wave of concentrated price hikes.

On February 25, BASF announced an immediate increase of $200 per ton for MDI products in the ASEAN region. The company attributed the price adjustment primarily to sustained increases in raw material costs. A week prior, Huntsman had raised MDI prices in the U.S. market by $260/ton, while Covestro announced a $220/ton increase for its North American MDI product line effective March 1, noting this adjustment builds upon previous price hikes.

This collective price hike comes just three months after the previous wave of increases at the end of 2025. Between November and December last year, BASF, Wanhua Chemical, and Huntsman successively raised prices in South Asia, Southeast Asia, Europe, and the Middle East/Africa regions, with increases ranging from $200 to $350 per ton.

As of February 12, domestic polymeric MDI prices stood at RMB 13,900/ton, down 26.06% year-on-year, while pure MDI prices reached RMB 17,500/ton, a 10.26% year-on-year decline.

It is reported that due to persistently high costs in energy, labor, and environmental compliance, MDI producers have generally operated at low profit margins or even incurred losses. Core industry leaders like BASF have repeatedly pushed for MDI and TDI price increases since 2025.

February is traditionally one of the peak pricing periods for polyurethane products annually. This is primarily because major polyurethane consumption markets, such as China and Southeast Asian countries like Vietnam, are in the midst of the Spring Festival holiday. Additionally, the Middle East market enters Ramadan, boosting holiday stockpiling demand. This facilitates smooth shipments for polyurethane manufacturers like MDI and polyether producers, reducing inventories to low levels.

Furthermore, TDI, another core polyurethane raw material alongside MDI, has also experienced a robust upward trend. Wanhua Chemical set its TDI distribution channel price at RMB 15,700/ton for early March, a month-on-month increase of RMB 1,200/ton, while implementing a limited supply strategy. Cangzhou Dahua followed suit, raising its March TDI price by RMB 1,000/ton to RMB 16,000/ton.

As of February 24, the domestic TDI market average price stood at approximately RMB 14,900/ton, marking a year-on-year increase of about 16%.

Both MDI and TDI rank among the bulk chemicals with the highest comprehensive barriers in the chemical industry, with their end products applied across multiple sectors including aerospace, transportation, construction, and home appliances. Their distinct molecular structures result in significantly different application domains. MDI is primarily used in rigid and semi-rigid polyurethane foams, widely applied in building insulation materials, refrigerators, and freezers requiring structural strength. TDI, meanwhile, is mainly used in flexible polyurethane foams for soft furniture applications such as sofa cushions, mattresses, and automotive seats.

In terms of capacity distribution, global MDI production is highly concentrated among five giants: Wanhua Chemical, BASF, Covestro, Huntsman, and Dow, with the top five companies (CR5) accounting for over 90% of global capacity. Wanhua Chemical leads the industry with an annual capacity of 3.8 million tons, representing 33.8% of the global market share. A similar pattern exists in the TDI sector, where Wanhua Chemical holds nearly 40% market share.

Fundamentally, supply contraction for MDI and TDI is accelerating. According to BaiChuan YingFu, as of February 12, approximately 1.94 million tons of global MDI capacity was operating at low utilization rates. For TDI, beyond the intensive maintenance cycles at major producers, multiple European plants continue facing exit pressures due to soaring energy costs. Elevated crude oil and energy prices at the cost end further support upward shifts in price benchmarks.

Simultaneously, structural shifts in demand provide long-term support for MDI and TDI price increases.

Projections indicate China's MDI consumption will reach 3.8244 million tons by 2025, with a compound annual growth rate (CAGR) of 10.9% from 2019 to 2025. Beyond traditional sectors like home appliances and automobiles, emerging applications such as formaldehyde-free engineered wood panels, building insulation, photovoltaic frames, and highway infrastructure continue to expand demand. From a supply-demand perspective, projected supply gaps of 650,000 tons in 2026 and 1.07 million tons in 2027 are anticipated. Coupled with the exit of high-cost overseas capacity and sustained demand recovery, the supply-demand dynamics remain favorable, positioning the industry for gradual upward price trends.

For TDI, driven by economic recovery and growth in the elastomer sector, global consumption is projected to grow at an average annual rate of 3.1% from 2023 to 2028, with China's consumption expanding at an average annual rate of 4.7%. Overseas supply disruptions remain frequent, with new capacity additions concentrated domestically. As overseas utilization rates gradually decline and domestic supply expands, China's share of global TDI production capacity is projected to rise from 54.7% in 2025 to 58.8% in the future.

As an integrated internet platform providing benchmark prices, on February 27, the benchmark price of SunSirs polymeric MDI was RMB 14,000.00/ton, a decrease of 0.71% compared with the beginning of the month (RMB 14,100.00/ton),the benchmark price for TDI is RMB 14,900.00 per ton, an increase of 5.18% compared to the beginning of the month (RMB 14,166.67 per ton).

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