Everyone is saying the chemical industry has reached an inflection point—what’s the logic behind this?

In November 2025, Huntsman’s 280,000-ton-per-year MDI plant in the Netherlands unexpectedly shut down; coupled with multiple European facilities operating at low loads, global MDI supply tightened sharply. The following month, Wanhua Chemical, BASF, Dow, and Huntsman simultaneously raised prices for MDI and TDI—evidence of a severe overall supply shortage driven by chronic energy shortages and aging infrastructure. Meanwhile, new capacity is rapidly concentrating in low-cost regions: in 2025, China accounted for over 70% of global PTA capacity and approximately 45% of PX capacity. From January to August, export volumes of 60% of the 86 key monitored chemical products ranked above the 80th percentile over the past six years—reflecting China’s continuously strengthening position in the global supply chain. Domestic supply dynamics are shifting—from disorderly expansion to rational consolidation. Amid this wave of overseas shutdowns, China’s chemical industry has entered a new phase of optimizing existing capacity. In August 2025, seven ministries—including the Ministry of Industry and Information Technology—jointly issued the ‘Notice on Conducting Inventory and Assessment of Aging Facilities in the Petrochemical and Chemical Industry’ (MIIT-Linked-Origin [2025] No. 195), mandating evaluation of facilities operating beyond 20 years or exceeding their designed service life. This covers roughly 15–18 million tons of capacity—18.3% of the industry’s total—with priority areas including MDI/TDI (where aging capacity accounts for ~25%), chlor-alkali, and synthetic ammonia. Chemical enterprises nationwide have already begun implementation: Wanhua Chemical’s 400,000-ton-per-year aging MDI facility in Yantai entered assessment procedures, while its new 1.2-million-ton-per-year Ningbo base commenced operations—reducing unit production costs by ~12%. After four years of industry winter, consolidation effects are evident: according to National Bureau of Statistics data, fixed-asset investment in the chemical raw materials and chemical products manufacturing sector declined 7.9% year-on-year from January to October 2025; capital expenditures in the basic chemicals segment have contracted for seven consecutive quarters. Virtually no new capacity is expected in 2026 for bulk commodities such as PTA and styrene—the industry has officially entered an era of competition among existing assets. From late 2025 to early 2026, over 30 Chinese chemical enterprises conducted concentrated maintenance, affecting nearly 6 million tons/year of capacity. Polypropylene’s annual maintenance-related output loss reached 7.42 million tons—a record high. PTA social inventory dropped from 2.98 million tons in December 2025 to 2.08 million tons by mid-January 2026. Jinpu Titanium permanently shut down its 80,000-ton-per-year titanium dioxide capacity (50% of its total), primarily due to a 12% year-on-year decline in the industry’s average price in 2025 and persistent losses for high-cost producers. Prices and profitability have hit bottom; the inventory cycle inflection point is emerging. Multiple core indicators confirm the industry has reached a historical trough. As of December 31, 2025, the ChemOnline China Chemical Products Price Index (CCPI) stood at 3,927 points—39% below its 2021 peak and at the 23rd percentile over the past five years. The PPI rose 0.2% month-on-month for the third consecutive month; its year-on-year decline narrowed to 1.9%. Inventory destocking is nearing completion: industry-wide inventory days fell from 25 days at end-2024 to 18 days—a 28% reduction. Inventories of bulk commodities such as PTA and MDI are at historic lows. In the first three quarters, the basic chemicals sector’s net profit attributable to shareholders grew 7.5% year-on-year (compared to 5.2% in the same period of 2024); ROE rose from 6.8% to 9.5%.

Massive losses, layoffs, asset sales—how dire was 2025 for global chemical giants?

In 2025, the global chemical industry underwent profound structural adjustment. Dow Chemical reported a net loss of $2.4 billion; Covestro, a €644 million net loss; SABIC, a SAR 24.7 billion net loss (approx. $6.6 billion); LyondellBasell, a $738 million net loss… Behind this string of staggering losses lies the longest downturn the global chemical industry has experienced in decades. Weak demand, overcapacity, geopolitical conflicts, and soaring energy costs—these four pressures converged, plunging once-glorious chemical giants into collective winter. Yet some companies broke through against the tide: BASF’s net profit surged 118%; PPG maintained stable adjusted earnings per share (EPS); LG Chem’s operating profit jumped 35%. Amid this industry-wide shakeout—who will survive the cycle, and who is swimming naked? Performance snapshot: Who lost money—and who profited? PlasticVision compiled 2025 financial results for major global chemical giants—providing a one-glance overview of the entire industry: Note: ① LG Chem data reflects operating profit; all others report net profit; ② PPG data shows adjusted EPS; ③ Eurozone-based firms use euros; others use U.S. dollars. Loss epicenters: Who fell hardest? Dow Chemical’s full-year 2025 net sales totaled $40 billion—down 7% year-on-year; GAAP net loss reached $2.4 billion. Its operating EBITDA plummeted from $2.6 billion in 2024 to just $400 million—a drop exceeding 80%. Operating cash flow fell from $2.9 billion to $1.1 billion—nearly halved. Saudi Basic Industries Corporation (SABIC) posted 2025 revenue of SAR 116.5 billion (approx. $31.1 billion), down 1% year-on-year—but recorded a net loss of SAR 24.7 billion (approx. $6.6 billion). This massive loss stemmed not from operational deterioration but rather from large-scale asset impairments. SABIC disclosed in its financial statements that it took substantial write-downs on certain assets, while average selling prices for key products also declined—severely compressing profits. Notably, however, its free cash flow reached SAR 7.2 billion—up 17% year-on-year—providing ample financial flexibility for future transformation. Covestro’s 2025 sales amounted to €12.94 billion—down 8.7% year-on-year; EBITDA stood at €740 million—down 30.9%; net loss widened to €644 million, up from €266 million in 2024. As the world’s leading polyurethane producer, Covestro is navigating a difficult transition. CEO Markus Steilemann stated the company is advancing its ‘Winning with Purpose’ strategy—cutting costs and restructuring businesses to weather the industry downturn. Additionally, LyondellBasell reported 2025 sales of $30.15 billion—down 10% year-on-year—and a net loss of $738 million. In its financial report, the company acknowledged that 2025 marked one of the longest downturns ever recorded for the chemical industry globally, citing weak demand for polyethylene and polypropylene—especially in China, where inventories remained persistently high—leading to sharp declines in product prices and margins. Notably, LyondellBasell exceeded its 2025 cash improvement target, delivering $800 million in cash improvements (vs. a $600 million goal), and raised its cumulative 2026 target to $1.3 billion.

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