INTs-Empire: Boldly forecast the supply-demand landscape for polyurethanes over the next three years.

【Answer 1】 1. From the perspective of financial statements, enterprises’ pricing-support initiatives are gaining momentum. 1.1 Overseas enterprises continue to face operational pressure. First, reviewing the financial reports of four overseas companies, global chemical demand remained persistently weak in 2023 due to heightened geopolitical uncertainty and a slowdown in global economic growth; as a result, revenue and profitability for all four companies declined significantly year-on-year—by 20% to 30%. In 2024, end-market demand has shown only modest recovery. Financial results reflect this: except for Huntsman, whose EBITDA posted a relatively large year-on-year increase (on a comparatively low base), the other three companies—Covestro, BASF, and Dow—reported single-digit year-on-year changes in both revenue and EBITDA, continuing the weak trend observed since 2023. Consequently, these enterprises face substantial operational pressure. This is also evident in strategic adjustments: Covestro, Huntsman, BASF, and Dow have all launched cost-saving programs. Moreover, BASF and Dow—whose business structures are relatively complex—are optimizing their asset portfolios via asset sales and similar measures to reduce operating costs. By contrast, Wanhua Chemical has effectively smoothed cyclical volatility through new capacity ramp-ups and outstanding cost control, sustaining robust profitability. In both 2023 and H1 2024, the company maintained year-on-year growth in revenue and gross profit. Specifically for polyurethane (PU) business, quarterly data show that the downturn began in Q3 2022—especially pronounced among the four overseas enterprises. Key drivers include persistently high energy costs (particularly in Europe), which continued squeezing profit margins, and weakening downstream demand—challenging enterprises on both volume and price fronts. In 2023 financial statements, PU-related revenue and EBITDA for all four overseas enterprises (Covestro, Huntsman, BASF, and Dow) fell by double-digit percentages year-on-year. Wanhua Chemical, however, achieved counter-cyclical revenue growth by increasing volume to offset lower prices. Since 2024, the PU businesses of all five enterprises have mainly exhibited the pattern of rising volumes but falling prices. Wanhua again leveraged new capacities—including Fujian MDI—to achieve 8.3% year-on-year revenue growth in the first three quarters. The other four overseas enterprises collectively reported flat or slightly declining year-on-year revenue, while their profit levels gradually stabilized. Looking ahead, BASF and Dow—given their large overall scale—have relatively small shares of PU business in their total revenue and profits; thus, PU performance improvement would contribute only marginally to their overall financial health. By contrast, PU business accounts for a relatively larger share of revenue and profits for Covestro, Huntsman, and Wanhua Chemical. Among them, Covestro and Huntsman’s PU businesses have faced significant recent pressure, generating strong motivation to raise product prices to repair their balance sheets. INTs-Empire believes that, as industry fundamentals gradually recover, these players may adopt output cuts and pricing support measures to safeguard industry profitability. 1.2 Enterprises’ profit-recovery motivation is intensifying. Mainstream domestic and international PU producers have collectively raised prices. BASF announced on January 7 a $300/ton price hike for MDI and TDI in ASEAN and South Asia; Wanhua Chemical followed on January 15 with a $200/ton increase for MDI and TDI in ASEAN; Huntsman raised MDI prices by €125/ton across Europe, Africa, the Middle East, and India, effective February 1.

Sichuan Dacelue Investment Advisory: With the global landscape being reshaped, the polyurethane industry is entering an upward profitability cycle.

【Answer 2】 The polyurethane industry’s value chain comprises upstream core chemical raw materials—such as MDI and polyols—with highly concentrated capacity that dominates cost trends; midstream deep-processing of various PU products, representing the industry’s core entities; and downstream end-use sectors—including construction, home appliances, automotive, and new energy—covering diverse applications. Overall, the industry’s evolution is driven by emerging downstream demand and accelerated by green process innovations upstream, steadily advancing toward low-carbon, high-end, and domestically led development. 3. Polyurethane market size expands steadily. Domestic demand for PU materials remains stable with moderate growth. From 2001 to 2018 marked China’s fastest growth phase for the PU industry. By the later stage of the 13th Five-Year Plan (2016–2020), China’s PU industry entered maturity, with consumption growth slowing—but R&D investment continued rising, indigenous innovation capabilities further strengthened, and differentiated products increasingly diversified. As of 2024, China accounts for over 45% of global PU patent filings. According to Chlor-Alkali Network, China’s PU product consumption grew at a CAGR of ~1.4% between 2018 and 2022. Globally, the PU market is projected to expand from $91.49 billion in 2024 to $135.1 billion by 2032, representing a CAGR of 4.4%. 4. Recently, the PU value chain has entered a new round of concentrated price adjustment. Domestically, Wanhua Chemical announced on July 29 a $200/ton (≈RMB 1,352/ton) price increase for MDI and TDI in Southeast Asia. Overseas, on July 24, Huntsman issued a price adjustment notice raising all MDI products by €250/ton (≈RMB 1,930/ton) across Europe, Africa, and the Middle East, effective August 1, 2026. Additionally, Huntsman announced a $300/ton (≈RMB 2,020/ton) price hike for MDI and PU formulation products in India and the Indian subcontinent, effective July 27. Shanghai Huntsman’s August挂牌 price for polymer MDI stood at RMB 19,500/ton—an increase of RMB 1,500/ton. Meanwhile, BASF Shanghai’s August挂牌 price for TDI was set at RMB 19,000/ton, up RMB 1,000/ton. Both Huntsman and Wanhua Chemical explicitly cited sustained geopolitical tensions in the Middle East—driving sharp increases in raw material, transportation, and logistics costs—as the primary reason for the price adjustments. On the supply side, frequent price announcements by leading domestic and overseas enterprises—combined with scheduled plant maintenance and overseas supply disruptions—have strengthened market resolve to support prices. On the demand side, according to TianTian Chemical data, China’s MDI exports reached 505,000 tons in the first half of 2026, up 22.5% year-on-year; exports in June alone totaled 109,000 tons, up 56.4% year-on-year. Over the same period, imports amounted to 155,000 tons, down 5% year-on-year.

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Interview: US Huntsman Expects Flat PU Demand for 2027

Interview: US Huntsman Expects Flat PU Demand for 2027

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