Asian Markets
March 9, 2026
Wanhua Declares Force Majuere on Middle East Shipments
China’s Wanhua halts Middle East deliveries over shipping risks
Wanhua Chemical facility in China
Published on:
09 Mar 2026, 6:09 am
China’s Wanhua Chemical has declared force majeure on supplies to its Middle East customers, a company representative said on Monday.
The force majeure – a provision in a contract that relieves parties from their obligations because of an extraordinary event – came into effect on March 7, according to a letter Wanhua sent to customers and seen by Reuters.
“We are facing the severe disruption of shipping routes in the Strait of Hormuz, making delivery impossible or unreasonably dangerous,” the letter said.
The petrochemical major typically sells some of its derivatives such as isocyanates, a building block for polyurethane products used for bedding, furniture and automotive interiors, to the Middle East, traders said.
It operates two crackers, with a total ethylene production capacity of 2.2 million tonnes per year, at its site in Yantai in Shandong province.
Both crackers are still running at high rates for now, two sources familiar with the matter said.
Wanhua declined to comment when asked about any production cuts at the two crackers.
March 4, 2026
Chinese Cost Updates
Shipping Crisis Escalates: Domestic Chemical Industry Chain Faces Comprehensive Price Hikes
2026-03-04 15:57:03Source: ChemNet中文
Recently, due to the rapid escalation of the Middle East situation and the closure of the Strait of Hormuz shipping lanes, global energy and chemical supply expectations have tightened sharply. The domestic chemical futures market has experienced widespread consecutive limit-up gains, with core varieties such as crude oil, fuel oil, and methanol recording cumulative increases of over 10% in two days. The rapid rise in costs has formed a complete price transmission chain. Leading companies such as Wanhua Chemical, Luxi Chemical, and Sinopec have intensively raised product prices, pushing the entire chemical industry into a phase of cost pressure and widespread price increases.
I. Futures Market Surges Across the Board, Multiple Varieties Rise Over 10% in Two Days
As a crucial passage for approximately 30% of global seaborne crude oil and over one-third of methanol trade, the obstruction of navigation through the Strait of Hormuz has directly impacted China’s highly import-dependent energy and chemical system. The domestic futures market reacted sharply, with varieties such as crude oil, fuel oil, methanol, LPG, plastics, polypropylene, ethylene glycol, propylene, and pure benzene collectively surging. Among them:
Crude oil and fuel oil main contracts hit limit-up for two consecutive days, with cumulative increases exceeding 10%;
Methanol main contracts rose continuously for two days, with cumulative gains breaking 10%, making it one of the core leading varieties in this round of market trends;
Downstream chemical products such as polypropylene, polyethylene, ethylene glycol, and propylene followed suit, showing a strong pattern across the entire sector.
Market participants indicated that this rally was driven by three factors: supply disruption expectations, soaring logistics costs, and cost-side resonance, with varieties highly dependent on Middle Eastern supplies showing particularly pronounced elasticity.
II. Full Industry Chain Price Transmission Forms Five Major Lines Under Comprehensive Pressure
As the “mother of chemicals,” the price increase effect of crude oil quickly transmitted downstream, forming a clear industrial chain price transmission chain covering five core lines: methanol, polyester, pure benzene-propylene, plastics, and MDI-phosphorus chemicals. Costs have risen across the entire industry:
Methanol Industry Chain: Methanol → Formaldehyde → Acetic Acid, soaring raw material costs directly push up downstream processing costs;
Polyester Industry Chain: PTA → Ethylene Glycol → Polyester Filament → Short Fiber, textile and chemical fiber raw materials face comprehensive pressure;
Pure Benzene-Propylene Chain: Pure Benzene → Propylene → High Styrene → Phenol Ketone → Propylene Oxide, both aromatic and olefin lines experience price increases;
Plastics Sector: Polyethylene (PE) → Polypropylene (PP) → ABS, raw material costs for packaging and injection molding industries climb;
MDI-Phosphorus Chemicals: Polymeric MDI → TDI → Phosphate Rock and Phosphates, polyurethane and phosphate fertilizer sectors follow suit with price increases.
III. Enterprises Intensively Adjust Prices, Leading Companies Take the Lead in Raising Prices to Counter Cost Pressure
Facing soaring raw material costs, domestic chemical industry leaders intensively issued price adjustment notices in early March, covering varieties such as styrene, trichloromethane, phenol, urea, propylene oxide, and pure benzene, with adjustments ranging from 30 yuan/ton to 500 yuan/ton:
Wanhua Chemical: Styrene raised by 250 yuan/ton (early March);
Luxi Chemical: Trichloromethane raised by 250 yuan/ton (March 4);
Sinopec North China: Phenol raised by 500 yuan/ton (March 3);
Lihuayi Weiyuan: Phenol and styrene raised by 270-300 yuan/ton (March 2);
Hualu Hengsheng: Urea raised by 30 yuan/ton (March 2);
Binzhou Chemical / Xinyue: Propylene oxide raised by 150-200 yuan/ton (March 2);
Dongming Petrochemical: Pure benzene and sulfur raised by 100-160 yuan/ton (March 2).
The industry pointed out that this round of price adjustments is primarily cost-driven. To alleviate the pressure of rising raw material costs and ensure stable production, companies were forced to raise ex-factory prices. Downstream processing, manufacturing, textile, and packaging industries will gradually bear the cost pressure.
IV. Market Outlook: Geopolitical Risks Persist, Chemical Prices Remain Strong
Currently, there are no signs of easing in the Middle East situation, and navigation through the Strait of Hormuz remains highly uncertain. Coupled with the recovery in demand for resumption of work and production in China in March, the supply and demand dynamics for chemicals remain tight.
In the short term, core varieties such as crude oil and methanol will continue to be dominated by geopolitical events, with prices prone to rise rather than fall. If the shipping lanes remain closed in the medium term, the gap in imported supplies will further widen, potentially prolonging the period of high domestic chemical prices. Profit distribution along the industrial chain will tilt toward the raw material end, and cost pressures on downstream enterprises will continue to intensify.
February 11, 2026
Indian ADD for TDI 80
Government Extends Anti-Dumping Duty on TDI Imports from EU, Saudi Arabia
Custom Duty | Notifications ADD, Notifications/Circulars The Ministry of Finance has issued Notification No. 03/2026-Customs (ADD) dated 10 February 2026, imposing anti-dumping duty on imports of Toluene Di-Isocyanate (TDI) having isomer content in the ratio of 80:20, classified under tariff item 2929 10 20, originating in or exported from the European Union and Saudi Arabia. The decision follows final findings of the designated authority dated 12 November 2025, which concluded that cessation of existing anti-dumping duty would likely lead to continuation of dumping and injury to the domestic industry.
Exercising powers under Section 9A of the Customs Tariff Act, 1975 and relevant rules, the Government has specified producer-wise duty rates ranging from US$ 102.05 to US$ 344.33 per metric tonne. The duty will remain effective for five years unless earlier revoked or amended and shall be payable in Indian currency based on the exchange rate notified under the Customs Act.
MINISTRY OF FINANCE (Department of Revenue) Notification No. 03/2026-Customs (ADD) | Dated: 10th February, 2026 G.S.R. 121(E).— Whereas, in the matter of “Toluene Di-Isocyanate (TDI) having isomer content in the ratio of 80:20” (hereinafter referred to as the subject goods) falling under tariff item 2929 10 20 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), originating in or exported from European Union and Saudi Arabia (hereinafter referred to as the subject countries), and imported into India, the designated authority in its final findings, published in the Gazette of India, Extraordinary, Part I, section 1 vide notification No. 7/14/2024-DGTR, dated the 12th November, 2025 has inter alia come to the conclusion that there is a likelihood of continuation of dumping and consequent injury to the domestic industry in case of cessation of anti-dumping duty in force, and has recommended continued imposition of anti-dumping duty on imports of the subject goods originating in or exported from the subject countries.
Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the Customs Tariff Act read with rules 18, 20 and 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 and in supersession of the notification of the Government of India, Ministry of Finance (Department of Revenue) No. 28/2021-Customs (ADD), dated the 27th April, 2021, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 297(E), dated the 27th April, 2021, except as respects things done or omitted to be done before such supersession, the Central Government, after considering the aforesaid final findings of the designated authority, hereby imposes on the subject goods, the description of which is specified in column (3) of the Table below, falling under tariff item of the First Schedule to the Customs Tariff Act as specified in the corresponding entry in column (2), originating in the countries as specified in the corresponding entry in column (4), exported from the countries as specified in the corresponding entry in column (5), produced by the producers as specified in the corresponding entry in column (6), and imported into India, an anti-dumping duty at the rate equal to the amount specified in corresponding entry in column (7), in the currency as specified in the corresponding entry in column (9) and as per the unit of measurement as specified in the corresponding entry in column (8) of the said Table, namely:−
Customs classification is only indicative and not binding on the scope of the subject goods. ** The subject goods in the present investigation concerns TDI having isomer content in the ratio of (80:20). All other grades are beyond the scope of subject goods. 2.
The anti-dumping duty imposed under this notification shall be effective for a period of five years (unless revoked, superseded, or amended earlier) from the date of publication of this notification in the Official Gazette and shall be payable in Indian currency.
Explanation. – For the purposes of this notification, the rate of exchange applicable for the purposes of calculation of such anti-dumping duty shall be the rate which is specified in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), issued from time to time, in exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and the relevant date for the determination of the rate of exchange shall be the date of presentation of the bill of entry under section 46 of the said Act. [F. No. 190349/6/2026-TRU] DHEERAJ SHARMA, Under Secy.
Read more at: https://taxguru.in/custom-duty/government-extends-anti-dumping-duty-tdi-imports-eu-saudi-arabia.html
February 2, 2026
Covestro Expands TDI in China
Covestro expands TDI production capacity in Shanghai to 370,000 tons, strengthening competitiveness amid global supply tightening.
2026-02-02 14:03:09Source:ChemNet中文
On January 30, Covestro announced the completion of a major capacity expansion and upgrade of the toluene diisocyanate (TDI) production facility at its Shanghai integrated site. The annual TDI production capacity increased from 310,000 tons to 370,000 tons, a nearly 20% increase, further strengthening its supply capabilities in the Asia-Pacific region.
Covestro’s Shanghai integrated site is located in the Shanghai Chemical Industry Park and is the company’s largest production base globally. This expansion did not involve building new production lines but was achieved by optimizing existing production processes and infrastructure, resulting in significant output growth without additional land or major equipment investments.
Covestro Continues to Enhance Competitiveness in the TDI Sector
In March 2025, its largest TDI plant in Europe, located in Dormagen, Germany, completed a modernization upgrade. With an annual capacity of 300,000 tons, the core of the upgrade focused on energy recycling, reducing energy consumption by 80% compared to traditional processes and cutting annual CO2 emissions by 22,000 tons. This not only strengthened its competitiveness in high-energy-cost markets but also provided customers with TDI products with a lower carbon footprint.
In early 2026, the global TDI market experienced a concentrated contraction in supply. In January, global TDI plant shutdowns for maintenance totaled 860,000 tons, accounting for 24% of global production capacity. This included temporary shutdowns at Hanwha in South Korea and Wanhua’s Xinjiang facility, compounded by previous maintenance and abnormal fluctuations at major plants such as Covestro Shanghai and Wanhua Fujian, leading to a widening global supply gap.
Tight Supply in the TDI Market
From January 12 to 22, Wanhua Chemical’s TDI distributor price was set at 15,200 RMB/ton. Due to the ongoing shutdown of the Northwest plant, there was no supply from Northwest sources during this period. A major Shanghai manufacturer adjusted its TDI price to 14,400 RMB/ton, with tight supply and limited quantities available.
China’s TDI Exports Hit a Record High in 2025
Import and export data show that China’s TDI exports reached a historic high in 2025, with total annual exports reaching 556,500 tons and cumulative imports of only 3,400 tons. In December, exports were 50,200 tons, with imports of 140 tons; in November, exports reached 56,500 tons, setting a record for monthly exports, while imports were 460 tons. China’s TDI supply is highly self-sufficient, with exports playing a dominant role.
January 13, 2026
China Reducing VAT Rebate for Exports of Polyol
Export Tax Rebate Adjustment on Photovoltaic Products & Polyether Polyols
PUdaily | Updated: January 12, 2026
For the polyurethane industry, the update is particularly relevant because it captures product classifications that may apply to polyether materials commonly traded as polyether polyols (depending on the exporter’s declared HS code and customs classification). As a result, affected exporters may face higher effective export costs after April 1, 2026, which could translate into adjustments in export offers and contract pricing discussions.
Market participants should monitor potential impacts on export netbacks and shipment planning. As rebate removal typically increases the effective export cost for in-scope products, exporters and buyers may also reassess shipment schedules and commercial terms ahead of the implementation date where feasible.
https://www.pudaily.com/Home/NewsDetails/61866
Key Policy Shift: China’s Polyether Polyols VAT Export Rebates Cancelled from April 2026
January 13, 2026
China’s Ministry of Finance and State Taxation Administration have announced the removal of VAT export rebates for polyether polyols (HS 39072990), effective April 1, 2026. This marks a pivotal moment for an industry where export dependency has reached ~33%, with 2026 exports projected at 2M tons.
The change will reshape competitiveness in global markets and accelerate strategic reviews across the polyether-PO value chain.
Propylene Oxide (PO): A Short-Term Demand Pulse
A short-term demand surge is expected as exporters accelerate orders pre-deadline. While current PO operating rates are high, the demand pulse may tighten availability. PO prices have already begun rising (up ~RMB 200/ton in Jiangsu), with further increases anticipated.
Downstream Ripple Effect: Cost pressure will extend to key PO derivatives.
- Propylene Glycol (PG)
- Propylene Carbonate (PC)
- Dimethyl Carbonate (DMC)
Looking Ahead: With over 2.5M tons of new polyether and PO capacity scheduled through 2028—including multiple 2026 startups—the industry faces both policy-driven restructuring and expanding supply.
#PolyetherPolyols #PropyleneOxide #ChemicalIndustry #ExportPolicy #ChinaMarket #PG #PC #DMC #SupplyChain
Views are personal and not those of the company.
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