The global chemical industry is witnessing a new wave of price increases, with industry leaders BASF, Covestro, and Wanhua Chemical Group Co.,Ltd. successively announcing product price adjustments, further intensifying market activity. Driven by geopolitical tensions, policy measures, steadily rising international oil prices, firm coal prices, and shifts in supply-demand dynamics, chemical and energy prices are showing a marked upward trend. Frequent price hikes by leading firms underscore the sector's recovering vitality and the reshaping of competitive landscapes.
Market leaders are accelerating price transmission. As industry bellwethers, the price adjustments by BASF, Covestro, and Wanhua Chemical directly impact global markets. Starting in February, BASF increased MDI prices by $200 per ton in ASEAN countries, following significant price hikes of up to 11% for MDI and TDI products in Europe, the Middle East, and the Asia-Pacific region. Covestro followed suit, announcing a $220 per ton price increase for MDI products in North America effective March 1. Wanhua Chemical raised prices through TDI distribution channels, with a fixed price reaching 15,700 yuan per ton in early March, a surge of 1,200 yuan per ton from the previous period, alongside limited supply. Additionally, the company had previously increased prices for polymeric MDI and pure MDI by $200 per ton in Southeast and South Asia. The consecutive price hikes by these three giants indicate a trend-driven upturn rather than short-term volatility.
The core rationale behind this round of price increases lies in the interplay between periodic supply constraints and demand recovery. In the TDI sector, approximately 860,000 tons of global capacity (24%) was idled in January 2026 due to plant maintenance or force majeure events affecting major players like South Korea's Hanwha and Wanhua's facility in Xinjiang, leading to supply tightness. After rebounding from 2025 lows, TDI prices continued their upward trend at the start of 2026. Wanhua Chemical, with an annual capacity of 1.47 million tons, firmly leads globally, accounting for over 40% of supply, followed by Covestro and BASF. Notably, global TDI capacity additions have nearly stalled, with only Covestro's technical upgrade project and Hualu Hengsheng's planned project representing minor increments. China has become the core of global supply, with TDI exports surging 53% in 2025, and over 80% of Vietnam's imports relying on China.
The MDI sector similarly exhibits a highly concentrated market structure, with five major players—Wanhua Chemical, BASF, Covestro, Huntsman, and Dow—controlling 90% of global capacity. Wanhua Chemical leads with an annual capacity of 3.8 million tons; its seventh-generation technology achieves full catalyst recovery, offering significant environmental advantages. With ongoing shutdowns of high-cost capacity overseas and 1.94 million tons of capacity operating at low utilization rates, Zhongtai Securities predicts an MDI supply gap of 650,000 tons in 2026 and 1.07 million tons in 2027, suggesting a potential systemic rise in price benchmarks.
As production capacity concentrates in China, domestic companies are gaining significant pricing power. Leveraging technological advancements and scale, Wanhua Chemical has not only solidified its leading global position in TDI but is also rapidly catching up in the MDI sector, setting an industry benchmark with its sixth-generation technology supporting 800,000 tons per single line. Concurrently, increased Chinese exports are deeply penetrating overseas markets. Southeast Asian countries like Vietnam are highly dependent on the Chinese supply chain, further strengthening the influence of "Made in China" in the global chemical industry.
The series of price hikes by these giants reflects China's transition from a "capacity giant" to a "technological power" and the ongoing restructuring of the global chemical industry landscape. The successive price increases by BASF, Covestro, and Wanhua Chemical signal both a cyclical recovery for the industry and an anticipation of future tight supply-demand balances. Against a backdrop of persistent geopolitical uncertainty, high energy costs, and strengthened technical barriers, chemical giants are using price mechanisms to consolidate their market positions. The strong rise of Chinese enterprises is poised to further accelerate the evolution of cooperative and competitive dynamics within the global chemical industry. This new wave of price increases may act as a catalyst for industry consolidation, potentially enhancing profit flexibility and market share for leading companies.
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