Surging 51-fold! BASF and Dow’s Q2 financial reports stage a dramatic turnaround—among global chemical firms pursuing ‘slimming down and upgrading quality,’ who are the top performers?

These two companies span North America and Europe, covering the full spectrum—from polyolefins and materials to coatings and fine chemicals—and have simultaneously achieved substantial earnings recovery. Yet notable divergences remain in their profit drivers, cash flow structures, and asset management strategies. Meanwhile, domestic Chinese private refining & petrochemical leaders—including Orient Hengsheng, Rongsheng Petrochemical, and Hengyi Petrochemical—have all issued half-year profit forecasts showing explosive growth. Thus, the broad-based earnings recovery across the global plastics and chemicals industry in Q2 2026 has become a consensus view. This article analyzes complete financial data from both firms, comparing commonalities and core differences to unpack the fundamental drivers behind this market rally. Comprehensive Q2 Performance Comparison of the Two Industry Giants (I) Dow Chemical: Realization of Polyolefin Cycle Benefits, Full Recovery of Core Operating Profits Dow’s net sales for Q2 2026 totaled USD 12.092 billion, up 20% year-on-year; average product prices rose 20% overall, with exchange-rate effects adding another 1% to revenue, while volume declined only slightly by 1%. The contrast in profitability is striking: Dow posted a Q2 2025 net loss of USD 801 million, but swung to a net profit of USD 802 million in Q2 2026; operating EBIT reached USD 1.648 billion—versus a loss of USD 21 million in Q2 2025—a near 230% year-on-year increase. By segment, Packaging & Specialty Plastics (centered on polyethylene) served as the primary profit engine, contributing a USD 1.229 billion year-on-year EBIT increase; Industrial Intermediates also saw gross margin recovery; only the Performance Materials segment registered a modest EBIT decline due to major plant overhauls. On the cash flow front, operating cash flow stood at USD 1.324 billion in Q2—compared to a net outflow of USD 470 million in Q2 2025—demonstrating full conversion of price-driven gains into operating cash. Dow also accrued USD 503 million in restructuring expenses during the quarter, supporting implementation of its ‘Transform to Outperform’ cost-optimization strategy. (II) BASF Group: Steady Core Growth + One-Time Gains from Asset Divestitures BASF’s Q2 2026 sales totaled EUR 17.2 billion, an increase of EUR 2.4 billion (+16.4% year-on-year); price increases contributed +11.5%, volume growth added +7.3%, while exchange-rate effects exerted minor negative pressure per preliminary business reporting. EBITDA excluding special items amounted to EUR 2.4 billion—up EUR 854 million year-on-year—with significant profit improvements across its Materials, Chemicals, and Industrial Solutions divisions. The extraordinary leap in profitability stemmed primarily from a one-time asset disposal: the sale of its Coatings business to Carlyle Group generated a post-tax gain of EUR 3.5 billion, propelling Q2 net income to EUR 4.2 billion and net profit to EUR 4.1 billion—versus just EUR 79 million in Q2 2025. Excluding this transaction, Q2 EBIT was EUR 937 million (vs. EUR 293 million in Q2 2025); EBITDA excluding special items stood at EUR 2.4 billion. Cash flow exhibited structural strain: operating cash flow was EUR 524 million—down EUR 1.1 billion year-on-year—mainly due to higher raw material costs inflating inventory and accounts receivable; investment cash flow turned sharply positive at EUR 5.5 billion, entirely attributable to proceeds from the Coatings divestiture; free cash flow turned negative at EUR 189 million, highlighting mounting working-capital pressure.

Monthly price surge exceeding 10%! Wanhua, BASF, and Huntsman jointly hike prices for polyurethane raw materials.

Wanhua Chemical announced on July 14 that its Hungarian subsidiary BorsodChem’s integrated MDI (400,000 tons/year) and TDI (250,000 tons/year) facilities would begin scheduled maintenance shutdowns starting July 17, lasting approximately 35 days. Tosoh Rui’an’s 80,000-ton/year MDI facility halted operations at the end of July for roughly one month of maintenance. BASF had indicated in early June its plan to conduct a 45-day MDI production shutdown for maintenance beginning in July. Xinjiang Julili’s 200,000-ton/year TDI facility was also offline for maintenance throughout July. Wanhua’s Yantai MDI facility (1.1 million tons/year) is scheduled for routine maintenance in August; Gansu Yin Guang’s 150,000-ton/year TDI facility is likewise slated for maintenance in early August. Additionally, Wanhua’s Fujian industrial park MDI facility (800,000 tons/year), which underwent planned maintenance earlier, completed repairs and resumed normal operations on July 31. The concentration of multiple facility shutdowns is driving sustained global supply contraction. This supply tightening is not merely short-term. Industry analysis projects that global MDI capacity growth in 2026 will be below 2%; no new TDI capacity is expected globally between 2026 and 2027. Consequently, MDI and TDI markets are likely to remain in tight balance—or even face supply deficits. Pricing Power Under an Oligopolistic Structure The synchronized global price hikes for MDI and TDI stem directly from the industry’s highly concentrated oligopolistic structure. For MDI: As of end-2025, global capacity is overwhelmingly concentrated among a handful of leading players: As of end-2025, the world’s top five MDI producers—Wanhua, BASF, Covestro, Huntsman, and Dow—collectively accounted for 10.095 million tons of annual capacity, representing over 90% of total global MDI capacity. Wanhua Chemical leads globally with 3.8 million tons/year. The TDI market exhibits similarly high concentration: As of end-2025, Wanhua Chemical held 1.47 million tons/year of TDI capacity—the largest globally. Industry insiders note that global MDI and TDI supply is extremely concentrated, granting dominant players outsized pricing influence. When Wanhua, BASF, and Huntsman almost simultaneously announce price increases, market participants have virtually no bargaining power. Price-Hike Benefits Are Materializing Rising raw material prices are directly translating into improved corporate earnings. Wanhua Chemical expects its 2026 first-half net profit attributable to shareholders to range between RMB 9.8 billion and RMB 10.4 billion—a 60.05% to 69.85% year-on-year increase. In its announcement, the company explicitly attributed this growth to sharp increases in global chemical raw material prices, coupled with shifting regional supply-demand dynamics, which collectively drove up market prices for chemical products and enhanced the profitability of its chemical portfolio. BASF reported Q2 2026 EBITDA excluding special items at EUR 2.4 billion—significantly higher than the EUR 1.6 billion recorded in Q2 2025. Its Q2 sales reached EUR 17.2 billion, up EUR 2.4 billion year-on-year, driven mainly by price increases (+11.5%) and volume growth (+7.3%). Huntsman reported Q2 2026 revenue of USD 1.663 billion and adjusted EBITDA of USD 120 million. TDI producer Cangzhou Dahua expects its 2026 first-half net profit attributable to shareholders to reach RMB 101 million—a ~330.75% year-on-year increase—also largely attributable to substantially higher TDI market prices.

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