The Urethane Blog
March 17, 2026
LyondellBasell Declares Force Majeure After Bayport Fire
March 17, 2026 1 min read
LyondellBasell has announced force majeure on propylene oxide (PO) after a fire at its Bayport Choate site in Texas on March 12, market sources said.
The fire forced part of the complex to shut unexpectedly, reducing PO output. The company is still reviewing the damage and has not yet indicated when operations may resume. Further updates on supply allocations and restart timing are expected once the assessment is completed.
The Bayport unit is one of LyondellBasell’s major PO assets, with capacity of about 600,000 tonnes per year. The site also produces propylene glycol and glycol ethers.
In the near term, the disruption could tighten PO availability and increase cost pressure for downstream polyether polyol markets.
Source: LyondellBasell
March 15, 2026
Europe’s Polyether Polyol Industry: Can It Withstand Another Market Shock?
PUdaily | Updated: March 6, 2026
The closure of the Strait of Hormuz has collided with a European polyol industry already operating under severe structural pressure, squeezed by low-priced Asian imports, shuttered domestic capacity, and energy costs far above those faced by competitors in Asia or the Middle East. The market, in the words of one participant this week, is “muy nervioso.”
MARKET SNAPSHOT — 5 MARCH 2026
PRICE TRAJECTORY: TWELVE MONTHS OF STRUCTURAL PRESSURE
The chart below captures the industry’s recent price trajectory. Spot prices for flexible slabstock polyol in Western Europe opened March 2025 at €1,275/t and rallied sharply to €1,495/t in mid-April on seasonal restocking. Prices then declined steadily, falling nearly 29% to a trough between €1,000 and €1,065/t by early October, a level at which most non-integrated European producers operate at very tight margins.
Chart 1 — Flexible Slabstock Polyol spot price (mid-range), Western Europe, Mar 2025–Mar 2026.
Source: PUdaily price assessments.
THE INDUSTRY BEFORE THE CRISIS: ALREADY UNDER STRUCTURAL PRESSURE
Before a single missile was launched or a tanker rerouted, the European polyether polyol sector was already facing significant structural disadvantages that years of industry lobbying had failed to resolve. Understanding this baseline is essential to explaining why the current crisis may represent more than a temporary disruption.
- Energy costs: a structural disadvantage
European chemical producers have operated with a persistent energy cost disadvantage compared with global peers. Throughout 2024 and 2025, gas prices in Europe remained several times higher than in the United States. Data from the European Chemical Industry Council (Cefic) indicate that at the start of 2025, European gas prices were approximately 3.3 times higher than those in the US.
For an energy-intensive process such as polyether polyol production, which requires propylene oxide feedstock and significant utilities for reactor temperature control, energy pricing is not a marginal cost factor. It represents a structural competitive constraint that compounds whenever feedstock costs increase.
- The Asian import ceiling
Trade statistics also illustrate growing competitive pressure. EU customs data show that between 2023 and 2025 import volumes increased while average unit values declined. The practical result is a price ceiling on commodity grades of polyether polyols.
European producers cannot sustainably price above the landed cost of imported Asian material, yet their production costs frequently exceed that level at non-integrated sites. This dynamic has placed persistent downward pressure on margins.
2025: the year of capacity rationalisation
The market response to this structural squeeze has been a wave of closures and production rationalisations that have significantly reduced Europe’s shock-absorption capacity.
Dow Chemical confirmed the shutdown of its Tertre (Belgium) polyols facility, representing approximately 94,000 t/year of commodity-grade capacity, citing energy costs, regulatory pressures, and sustained import competition. The site is expected to cease operations by the end of March 2026.
INEOS closed propylene oxide and propylene glycol production at its Cologne site on an indefinite basis, signalling a structural adjustment rather than a temporary market response.
LyondellBasell and Covestro also confirmed the permanent closure of the PO/SM “PO11” unit at Maasvlakte in Rotterdam, referencing global overcapacity and Europe’s cost disadvantage.
These closures reduce Europe’s ability to buffer supply disruptions and weaken the economic case for maintaining integrated propylene oxide supply chains within the region.
THE HORMUZ SHOCK: THREE TRANSMISSION CHANNELS
The military escalation involving Iran that began at the end of February 2026 has disrupted the European polyol supply chain through three simultaneous channels. Individually, each would be manageable. Combined, they create significant uncertainty across the market.
Map, Global petrochemical trade routes and chokepoint status as of 5 March 2026. Red dashed = suspended (Hormuz closure); orange = active Cape of Good Hope detours; green = US alternative. Dow EMEAI price increases annotated.
Source: PUdaily analysis, EIA, carrier notices.
- Channel 1: Logistics disruption
Major shipping companies including Maersk, MSC, CMA CGM and Hapag-Lloyd have suspended transits through the Strait of Hormuz. Vessels are being rerouted around the Cape of Good Hope, adding approximately 10–15 days to transit times and triggering emergency freight surcharges.
War-risk insurance has either become unavailable or prohibitively expensive. Reports indicate that several vessels have been struck near the strait and shipping intelligence suggests that a large number of vessels remain stranded in the surrounding area.
CMA CGM has introduced emergency conflict surcharges of up to $4,000 per container. For polyols transported in ISO tanks or bulk shipments, the per-tonne freight impact follows a similar logic.
Buyers who in recent years reduced inventories and relied on just-in-time imports from Asia or the Middle East now face supply chain vulnerability. Market participants report rising freight rates, although confirmed figures remain limited as the situation continues to evolve.
- Channel 2: Energy market disruption
The energy dimension of the crisis may have even deeper structural implications. QatarEnergy suspended LNG production following strikes affecting facilities at Ras Laffan and Mesaieed. Qatar supplies roughly 20% of global LNG, and the disruption immediately tightened global gas markets.
European gas storage levels were already relatively low for this time of year, around 30%. As supply concerns intensified, TTF futures rose sharply, increasing approximately 70% within days and peaking above €60/MWh. Some market estimates suggest that under a sustained one-month Hormuz disruption scenario, TTF prices could approach €70–€75/MWh.
For polyol producers whose margins were already thin before the crisis, such energy cost increases represent a severe economic challenge. Each increase in gas prices directly erodes margins in a market where selling prices remain constrained by international competition.
PRIMARY SOURCE — DOW EUROPE: PRICE INCREASE ANNOUNCEMENTS
3 December 2025 — Dow Europe GmbH announced an immediate increase of +€150/t for all polyether polyol grades in EMEAI (Europe, Middle East, Africa, India), effective immediately or within shortest time permitted by contract. Dow cited escalating raw material, energy, and transportation costs pressuring production economics.
27 February 2026 — Dow Europe announced a further +€100/t increase for all polyether polyol series in EMEAI, effective immediately. Dow cited current cost pressures and evolving supply-demand dynamics — the announcement landing one day before the outbreak of military conflict in Iran on 28 February, which further intensified expectations among polyurethane raw material suppliers.
Combined announced increase: +€250/t since December 2025. Source: PUdaily, Dow Europe GmbH announcements.
- Channel 3: Naphtha and propylene pressure
The naphtha disruption is affecting multiple regions simultaneously. Asian petrochemical producers are also facing feedstock supply risks as Middle Eastern export flows are disrupted.
Reports indicate that several Asian petrochemical companies are considering run rate reductions or temporary shutdowns. Indonesia’s Chandra Asri has declared force majeure on certain contracts, while Japanese producers have cancelled import tenders for April naphtha cargoes.
Asia typically imports around four million tonnes of Middle Eastern naphtha per month. South Korea alone sources roughly 54% of its naphtha supply through routes that pass the Strait of Hormuz.
If Asian steam crackers begin reducing operating rates due to feedstock constraints, this could temporarily reduce export pressure on European markets. However, the impact would depend on how long the disruption persists and how quickly alternative supply routes are secured.
THE MARGIN SQUEEZE: SCENARIO ANALYSIS
Even under rapid geopolitical de-escalation, many European producers remain only marginally profitable on commodity grades.
Under prolonged disruption, the gap between production costs and achievable selling prices may widen further, compressing margins to levels that historically have triggered additional plant closures or force majeure declarations.
The key dynamic is asymmetry. Cost shocks related to energy, logistics, and feedstocks transmit rapidly and with high certainty. Price recovery, however, is constrained by the competitive ceiling imposed by imports.
Even if Asian producers experience their own cost increases, they often have greater scale, integration, and alternative supply options that allow them to absorb temporary margin compression more easily.
IMPLICATIONS FOR MARKET PARTICIPANTS
- Buyers and downstream processors
For polyurethane processors, including foam, automotive, and insulation producers, security of supply is rapidly becoming a priority alongside price management. Buyers that have relied heavily on spot imports and minimal inventories face the greatest risk of supply disruption.
Market participants report increasing concern about availability, which may drive precautionary inventory building in the near term. Buyers with long-term supply contracts or domestic supplier relationships are comparatively better positioned.
- Traders and distributors
The arbitrage trade that has been profitable for the past 18 months, Asian polyol into Europe on improving freight and weak spot prices, is temporarily shut. Logistics are disrupted, insurance is expensive or unavailable, and transit times have extended. Traders who have cargo already en route face uncertainty about delivery timing and war-risk exposure. Those with European inventory have pricing power for the first time in months, though the window may be narrow. Watch for the resumption of Asia-to-Europe flows once routing clarity and insurance markets normalize, that is when the structural price ceiling re-asserts itself.
- European producers
The remaining integrated European producers, those with captive propylene oxide supply and flexible energy management, have a genuine competitive advantage in this environment. They have product. They have defined supply chains. They are not exposed to Hormuz rerouting risk on their feedstocks. The temptation will be to press that advantage on price, and the market would likely accept some increase given availability anxiety. The risk is overreaching: if the disruption resolves quickly and Asian volumes resume, any price gains will reverse sharply and relationship damage with key accounts will persist.
The deeper strategic question, beyond this crisis, is whether these closures and this disruption finally provoke a policy response that meaningfully addresses the energy cost differential. The European Commission’s Chemical Action Plan and Clean Industrial Deal rhetoric has been positive; the concrete impact on production economics has been minimal. That calculus may be changing.
OUTLOOK: KEY FACTORS TO MONITOR
Given the rapidly evolving geopolitical environment, specific price forecasts remain highly uncertain. Instead, several key indicators should be closely monitored:
- Hormuz shipping conditions – Any diplomatic progress reopening shipping lanes would quickly reduce freight and insurance costs.
- Qatar LNG production – A resumption of output from Ras Laffan would significantly ease pressure on European gas markets.
- Asian steam cracker run rates – Feedstock shortages in Asia could temporarily reduce export competition.
- European contract negotiations – Quarterly settlement discussions may reflect stronger cost-pressure arguments from producers.
- Potential force majeure declarations – Any disruptions to feedstock supply could have immediate market consequences.
THE BOTTOM LINE
Europe’s polyether polyol industry was already operating without a margin buffer when the Hormuz crisis began. The simultaneous shock to energy costs, feedstock logistics and import availability has removed the assumption of resilience that was still, however weakly, attached to remaining European production assets. The near-term price signal is upward, driven by anxiety, not demand recovery. The medium-term risk is that the disruption proves short-lived, Asian imports resume at low unit values, and the brief window of European producer advantage closes before any structural relief arrives. The permanent question, whether Europe retains a commodity polyol industry at all, has not been answered by this crisis. It has merely been made more urgent.
DATA NOTES & SOURCES
Polyol price data: PUdaily price assessments, Flexible Slabstock Polyols Bulk 3,000 MW, Spot, Western Europe, DEL, EUR/t. Price shown as mid-point of assessed range. | EU import data: Eurostat/UN Comtrade HS 390720 (“other polyethers, primary forms”) — used as directional proxy; not identical to polyether polyol trade classification. | Energy data: TTF front-month, EIA STEO, Cefic. | Naphtha: Reuters, 4 March 2026. | Shipping: Drewry WCI, carrier notices. | Capacity data: company announcements. | Market colour: anonymised primary sources, 5 March 2026. | All scenarios in Chart 3 are illustrative cost-build estimates and do not constitute price forecasts.
March 10, 2026
China’s Foam Mattress Exports Hit Record High in 2025
PUdaily | Updated: March 10, 2026
China’s Foam Mattress Exports Reach Record High in 2025 amid Global Demand Recovery
In 2025, China exported 158,696 tons of foam mattresses, a 3% increase from 154,040 tons in 2024, extending the recovery trajectory observed over the past three years. Exports rose from roughly 132,000 tons in 2023 to above 150,000 tons in 2024 as global demand recovered, and continued to grow steadily in 2025 on that elevated base. This marks a structural shift in China’s foam mattress export sector from post-pandemic recovery toward a more stable, higher plateau .
Source: GACC – China Sponge Mattress Export Volume (Tons), 2023–2025
China’s foam mattress exports exhibited a pronounced V-shaped seasonal pattern on a monthly basis in 2025. Exports reached an annual low of 7,604 tonnes in February, followed by a swift rebound in March. Momentum strengthened significantly from Q3 onward: volumes remained consistently within the 14,800-15,200-tonne range during August-October, peaking at 15,231 tons in October—the highest monthly figure recorded in the past three years. Year-on-year comparisons reveal that nearly all months in 2025 registered substantial growth relative to 2023; however, growth versus 2024 was comparatively muted, indicating normalization of overseas inventory levels and diminishing restocking impulses.
Source: GACC – China Sponge Mattress Export Volume (Tons), 2025
By destination, China’s foam mattress exports follow a “dual-core, multi-regional support” structure. The United States (23,698 tons) and Japan (22,759 tons) remained the two largest markets. US demand expanded notably from Q3 onward—consistent with concentrated retail restocking activity in the latter half of the year—while Japanese demand remained relatively stable. Within Europe, Germany (13,597 tons), France (8,634 tons), and the United Kingdom (7,585 tons) constituted the core consumption cluster, though growth momentum remained subdued.
Asia-Pacific and emerging markets have evolved into critical supplementary channels. Australia (11,316 tonnes) demonstrated notable resilience; South Korea (7,195 tonnes) maintained moderate growth; and Mexico (8,277 tonnes) posted robust performance, reflecting enhanced regional absorption capacity in Latin America, partly driven by North American supply-chain diversification initiatives. Smaller markets such as Poland and Thailand sustained steady import volumes. “Others” collectively accounted for 47,631 tonnes (about 30% of total exports), underscoring an ongoing structural shift away from overreliance on traditional Western markets toward a more geographically diversified export portfolio.
From a value-chain perspective, flexible polyurethane (PU) foam serves as the principal raw material for foam mattresses. It is typically produced by reacting polyether polyols with toluene diisocyanate (TDI), yielding a lightweight, resilient, breathable, and durable material widely employed in mattresses, upholstered furniture, and automotive seating. Owing to these functional attributes, polyurethane-based materials are incorporated in over 70% of globally produced mattresses. The rapid adoption of vacuum-compressed (rolled) mattresses via e-commerce platforms in Europe and North America has further elevated the strategic importance of PU foam products in China’s export mix, given advantages in compressibility and logistics costs. Concurrently, TDI price volatility continues to exert measurable influence on manufacturers’ input costs and their export competitiveness.
At the end-consumer level, mattress demand reflects long-term macroeconomic and demographic drivers—including housing market activity, household formation trends, and upgrading of home consumption standards. In mature markets such as the US and Europe, average mattress replacement cycles span 8-10 years, resulting in broadly stable underlying demand—though cyclical upticks often coincide with improvements in housing sales or consumer sentiment. Meanwhile, the rapid expansion of online mattress sales has benefited Chinese exporters, whose vertically integrated manufacturing capabilities and responsive supply chains position them advantageously to capture e-commerce opportunities.
China’s foam mattress exports are projected to remain stable in the near to medium term, but the underlying growth drivers are undergoing structural change. First, demand in mature Western markets is expected to grow moderately, increasingly propelled by product innovation and brand differentiation rather than volume expansion. Second, the main incremental demand is expected to come from emerging regions—Southeast Asia, the Middle East and parts of Latin America—where rising incomes and accelerated urbanization are expanding home-furnishing consumption.
Furthermore, product upgrading will be a central strategic priority for the industry. In recent years, memory-foam mattresses, low-VOC polyurethane materials, and recyclable foam manufacturing technologies have garnered increasing attention. As international environmental regulations tighten and consumers place heightened emphasis on healthy indoor environments, future flexible PU products will be evaluated increasingly on environmental performance, ergonomic comfort, and durability. Chinese manufacturers must therefore complement cost competitiveness with sustained investment in technology and product innovation.
In summary, China’s foam mattress export sector progressed through three distinct phases between 2023 and 2025: post-pandemic recovery (2023), rapid expansion (2024), and consolidation (2025). Surpassing the 150,000-tonne threshold in 2025 signifies that the industry has established a structurally resilient export platform. While Chinese firms are expected to retain strong global market presence, competitive intensity is set to increase. Firms that proactively expand into high-potential emerging markets, accelerate product upgrades and build internationally recognized brands will be best positioned to secure leadership in the next phase of industry evolution.
March 10, 2026
WYANDOTTE, MI – MARCH 10, 2026 – BASF has announced the first commercial production of its biomass balance (BMB)[1]polyether polyols in North America, manufactured at the company’s Verbund site in Geismar, Louisiana. The new product line broadens BASF’s portfolio of sustainable polyurethane raw materials and represents a significant milestone in advancing the company’s sustainability goals.
The BMB polyether polyols are certified under the internationally recognized ISCC PLUS certification[2], ensuring full traceability and verification of sustainable biomass inputs across the value chain. Using the biomass balance approach, BASF replaces a share of fossil-based feedstocks at the beginning of the production process with renewable, bio‑circular materials, while maintaining identical product quality and performance compared with conventional polyether polyols.
Polyether polyols play a central role in polyurethane chemistry. They are a primary raw material that reacts with isocyanates to create polyurethane polymers. BASF’s biomass balance polyols provide a drop‑in solution that helps customers reduce the product carbon footprint (PCF) of flexible foam formulations used in countless industrial applications. Because BMB products retain the same specifications and processing characteristics as their fossil-based counterparts, manufacturers can adapt quickly without operational disruption.
“Expanding our BMB portfolio to include polyether polyols produced in Geismar further strengthens the trust our customers place in BASF to deliver reliable, sustainable solutions,” said Stefan Doerr, BASF Senior Vice President, Monomers North America. “Customers in the sleep products, automotive, and CASE industries can transition to these new solutions without any reformulation or process changes – making the shift both seamless and immediately actionable.”
BASF’s Monomers division continues to advance an ambitious sustainability roadmap, including the development of low‑PCF and circular product options across its major product lines. The launch of ISCC PLUS-certified BMB polyether polyols in North America complements the division’s existing BMB isocyanate offerings and reinforces BASF’s integrated approach to more sustainable polyurethane systems.
To learn more about BASF’s Biomass Balance portfolio and certification process, please visit us at https://chemicals.basf.com/north-america/en/Monomers/isocyanates-and-polyols/about-us/sustainability
[1] Biomass balance method (BMB): Fossil raw materials required for the manufacture of BASF products are replaced with renewable feedstock along the integrated production chain. The corresponding share of renewable material is attributed to the specific sales product via a certified mass balance approach. Production methods of this kind save fossil resources and reduce CO2 emissions at the same time. Renewable feedstock is not traceable in the BASF product.
[2] ISCC PLUS is a sustainability certification scheme for the use of sustainable biomass as raw material in the chemical industry. A certification according to this certification scheme confirms that the biomass used is sustainable and has been fed into the production system in the required amount. It also confirms that the sustainable biomass has been correctly attributed to the corresponding sales products. The certification is awarded on the basis of on-site audits conducted by independent auditors.
source: https://www.basf.com/us/en/media/news-releases/2026/03/P-US-26-11
March 9, 2026
Kumho Petrochemical shifts focus to high value-added products
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By Park Jae-hyuk
- Published Mar 9, 2026 3:15 pm KST
Kumho Petrochemical’s researchers conduct an experiment at the company’s research facility in Daejeon in this undated photo. Courtesy of Kumho Petrochemical
Kumho Petrochemical Group said Monday it is seeking to overcome widening market uncertainties and a prolonged supply glut across the global petrochemical industry by shifting its focus to a high value-added business structure.
Closely analyzing market conditions to balance profitability and growth, the group aims to turn this period of uncertainty into new opportunities.
Kumho Petrochemical, the group’s flagship unit, has been working to bolster its competitiveness in solution styrene butadiene rubber (SSBR), a high-performance synthetic rubber that improves tire wear resistance and fuel efficiency at the same time.
The material is considered particularly suitable for electric vehicle tires, which require higher durability due to heavier batteries and frequent acceleration and braking.
Last year, Kumho Petrochemical completed new facilities that increased its annual SSBR production capacity by 35,000 tons. With the new lines entering commercial operation in the first quarter of this year, the company expects to further strengthen its competitiveness in specialty products.
Kumho Mitsui Chemicals, a joint venture between Kumho Petrochemical and Japan’s Mitsui Chemicals, decided last year to expand its annual methylene diphenyl diisocyanate (MDI) production capacity by 100,000 tons, following a previous 200,000-ton increase in 2024.
The project is designed to maximize cost efficiency and investment returns by using existing facilities more effectively, thereby reinforcing the company’s global leadership in the MDI market.
Kumho Polychem, a producer of ethylene propylene diene monomer (EPDM), also completed an expansion last year that increased its annual EPDM production capacity by 70,000 tons, securing a total output of 310,000 tons. EPDM, a high-performance synthetic rubber with superior heat, weather and chemical resistance, is widely used in automobiles, ships and industrial materials.
Kumho P&B Chemicals, which specializes in industrial raw materials, has been seeking to expand its presence in the Middle East and Europe while ensuring stable sales through supply deals with major clients.
D&K Chemtech, a phenolic foam board supplier established as a joint venture between Kumho P&B Chemicals and Dongsung Chemical, has obtained several environmental certifications, including low-carbon certification for core materials, strengthening its competitiveness in the eco-friendly construction materials market.
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