SunSirs: Widespread Price Hikes Across the Fine Chemicals Market

Recently, the global fine chemicals market has seen price increases across multiple product categories. Markets in Europe, North America, and the Asia-Pacific region have strengthened simultaneously, with prices rising for products such as vinylene carbonate (VC), polyurethane raw materials (MDI and TDI), acrylates, carbon black, and H-acid. This wave of price hikes is the result of a convergence of global factors, including plant maintenance, geopolitical cost pressures, strict regulatory requirements, and supply-demand imbalances.

Vinylene carbonate (VC) is a critical film-forming additive for lithium-ion battery electrolytes, directly influencing battery cycle life and safety. Global demand for VC is projected to reach 98,000 to 120,000 tons by 2026, representing a year-on-year growth rate of 47% to 60%—significantly higher than the 31% growth rate of the lithium-ion battery industry as a whole. On the supply side, there are rigid constraints: VC production involves high-risk processes and faces extremely high barriers to entry regarding safety and environmental standards; furthermore, new projects typically require two to three years to move from initiation to stable mass production. During a period of deep industry losses in 2023 and 2024, numerous small- and medium-sized production units in North America and Europe were permanently shut down. Currently, effective global capacity is far below nominal capacity, and nominal capacity has further contracted over the past two years due to safety rectifications and environmental upgrades. The supply-demand gap is unlikely to close in the short term; moreover, raw material inventories at downstream electrolyte and battery manufacturers have fallen below safety thresholds, and the need to replenish stocks will amplify price volatility. Since July, VC prices have surged repeatedly, currently reaching 230,000 yuan per ton.

The price of H-acid rose by 31.15% in the last week of July alone, with the average price jumping from 60,000 yuan per ton to a range of 80,000–100,000 yuan per ton. H-acid is a core intermediate for reactive dyes and certain acid dyes; approximately 60% of global reactive dye production capacity relies on H-acid as a key raw material. This price surge was triggered by tightening supply at the intermediate production stage and is now propagating downstream through the dye industry chain. Quotes for reactive dyes in European and Indian markets have begun to rise, with export order prices in Asia following suit.

Regarding polyurethane raw materials, MDI and TDI have entered a global price-hike cycle. Since the escalation of geopolitical tensions in the Middle East, BASF has issued five consecutive price increase announcements covering products such as butyl acrylate, MDI, and TDI, with adjustments spanning major global markets including Europe, North America, and Asia-Pacific. Huntsman raised prices for MDI and blended systems in India and the subcontinent by $300/tonne (effective July 27 and August 1) and for MDI in Europe and the Middle East by €250/tonne. Wanhua Chemical raised MDI and TDI prices in Southeast Asia by $200/tonne starting July 29, with the broader Asia-Pacific market following suit. This round of price increases is driven by a combination of three factors: Middle East geopolitical tensions driving up global maritime chemical shipping costs; concentrated maintenance shutdowns of multiple MDI/TDI plants in Europe and Asia squeezing short-term supply; and leading companies raising prices to restore profit margins. Three major European chemical giants—BASF, Covestro, and Huntsman—plan to shut down a combined 700,000 to 1.1 million tonnes of MDI capacity between 2026 and 2027, further tightening overseas supply. Global MDI capacity growth is projected to remain below 2% in 2026, while no new TDI capacity is expected between 2026 and 2027; consequently, both core raw materials are expected to remain in a state of tight supply-demand balance.

In the acrylate sector, BASF raised the price of butyl acrylate by $0.05 per pound in the North American market and by €80/tonne in the European market. In the carbon black sector, Cabot issued a global price adjustment notice on July 27, announcing a uniform increase of $100/tonne over July price levels across the Americas, Europe, and Asia-Pacific regions. Cabot noted that long-term carbon black prices have been low, while recent increases in feedstock oil costs have far outpaced the scope for raising carbon black prices; margin pressure was cited as the direct reason for this adjustment. The underlying logic behind this wave of widespread price hikes for fine chemicals is remarkably consistent: the costs of upstream raw materials—including crude oil, natural gas, coal, and key minerals—have continued to rise, pushing manufacturing costs beyond the break-even point and forcing enterprises to pass these costs on to downstream sectors. Whether it is the supply-demand gap for VC, maintenance shutdowns and capacity exits in the polyurethane sector, cost-driven price hikes for carbon black, synchronized increases for acrylates, the impact of H-acid intermediates, or the ripple effects across the dye industry chain, the specific drivers vary by product. Yet, they all point to a single trend: the baseline price level of the global fine chemicals market is undergoing a systemic upward shift. (Source: China Chemical Industry News)

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