SunSirs: Chemical Raw Material Price Hikes Stem from Rigid Cost Support and Global Capacity Contraction

“At the start of 2026, driven by factors such as rigid cost support and global capacity contraction, raw material prices have continued to rise, leading to a significant increase in our product costs. Current product pricing can no longer meet the company's normal operational requirements. After careful consideration, we have implemented varying price adjustments for our building coatings and waterproofing products. Due to uncontrollable factors in the raw material market, product prices are still trending upward.” This excerpt comes from a recent price adjustment notice issued by a Chinese new materials company.

Multiple manufacturers of emulsions, styrene, titanium dioxide, and other chemicals have also issued price adjustment notices, substantially raising prices for related products. Some enterprises have indicated they will adopt a “case-by-case negotiation” model for chemical products to address future price fluctuations and minimize losses.

Industry insiders believe this collective price surge across multiple product lines is not a short-term fluctuation but an inevitable outcome of deeply intertwined core factors: supply-demand imbalance, cyclical inflection points, policy adjustments, and global supply chain disruptions. Rigid increases in core raw material costs serve as the primary driver. Styrene, a key monomer for synthesizing styrene-acrylic emulsions, saw mainstream transaction prices nationwide climb to approximately CNY8,000 per ton by late January, marking a monthly increase exceeding 15%. Butyl acrylate, a core component of emulsions, maintained high quotations at 7,050 RMB/ton. This “cost squeeze” from upstream raw materials directly compressed profit margins for midstream manufacturers, compelling industry leaders like Bardfu and Henghe Yongsheng to successively raise prices.

Styrene's sharp price surge stems partly from concentrated maintenance or shutdowns at domestic and international styrene plants, causing temporary supply tightness. Additionally, recent stabilization and rebound in international crude oil prices, coupled with concurrent strength in pure benzene prices, have provided robust upward pressure on styrene from the raw material end. Additionally, the rapid price surge has squeezed profits in downstream industries, prompting some enterprises to plan capacity reductions or shutdowns. Combined with weaker pre-Spring Festival procurement from downstream buyers, the styrene market faces near-term demand pressures. Looking ahead, styrene prices may remain in a strong oscillation pattern in the short term. Post-Spring Festival, key focus areas include the progress of plant restarts, the release of new capacity, and the intensity of restocking by downstream buyers upon resuming operations.

Policy regulation has emerged as a key catalyst for product price increases. The “Work Plan for Stabilizing Growth in the Petrochemical Industry (2025-2026)” has implemented a regulatory framework of “limiting new additions and phasing out outdated capacity,” cumulatively driving the exit of tens of millions of tons of outdated production capacity. Simultaneously, it supports breakthroughs in high-end materials, shifting the supply-demand landscape from ‘surplus’ to “tight balance.”

On the demand side, explosive growth in emerging sectors like new energy and AI has driven surging demand for related chemical raw materials. Concurrently, traditional sectors such as real estate are experiencing a recovery, boosting demand for titanium dioxide and coating resins by 8%–10%. On the supply side, chemical plants in Jiangsu, Shandong, and other regions have successively suspended operations for maintenance, reducing effective supply. Simultaneously, structural fluctuations in the global supply chain have intensified cost pressures. Volatility in international energy prices and tightening supplies of core raw materials like MDI and TDI have further amplified price increases.

At the end of January, Panzhihua Titanium Sea and Qianjiang Fangyuan Titanium Dioxide announced price hikes. Although follow-up increases were not ideal, many titanium dioxide producers are still watching the latest price moves of major large-scale manufacturers, hoping to raise prices and stabilize both prices and the market. The main reason is that the prices of key raw materials, sulfur and sulfuric acid, remain firm, keeping titanium dioxide production costs persistently high and putting significant pressure on corporate survival.

Industry analysts predict that by 2026, the chemical sector may move beyond its current pattern of indiscriminate price fluctuations, instead exhibiting core characteristics of cyclical upward trends, structural differentiation, and tiered price increases. While the overall price center will shift upward, performance across different segments will vary significantly. Enterprises throughout the supply chain must abandon short-term reactive strategies and instead build core competitiveness through cost control, supply chain management, product portfolio optimization, and long-term planning to achieve stable operations and sustainable growth.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.