BASF Raises TDI Prices as China Tightens Grip on Global Supply

On February 4, 2026, BASF announced a $200 per metric ton price increase for its Lupranate® TDI in Asia-Pacific (excluding mainland China) and the MEAF region, citing rising transportation, energy, and regulatory costs, against the backdrop of a rapidly tightening global supply environment dominated by China.

The global TDI market is undergoing a major structural shift, as capacity expansion has largely stalled outside China, while overseas production continues to decline due to plant closures and reduced operating rates at facilities in Japan, Argentina, India, and other regions. In contrast, China has consolidated its leadership through large-scale investments and stable output, highlighted by Wanhua Chemical’s 360,000-ton plant in Fujian in 2025 and Covestro’s January 2026 expansion in Shanghai, which raised capacity from 310,000 tons to 370,000 tons, making it the company’s largest TDI site worldwide.

The Shanghai project represents the only significant global capacity addition in 2026, while Hualu Hengsheng’s planned 300,000-ton facility remains the only major expansion on the horizon beyond this year. Supply pressures have intensified further in early 2026, with maintenance shutdowns affecting nearly a quarter of global capacity, including major facilities in South Korea, Xinjiang, and India, driving Chinese domestic prices to 14,300–14,500 RMB per ton.

These disruptions have reinforced China’s role as the primary supplier to import-dependent regions such as ASEAN, South Asia, and parts of Latin America, where exports have surged. While China’s dominance offers global buyers greater supply stability, it also raises exposure to raw material volatility, trade barriers, and environmental compliance costs. As a result, manufacturers, traders, and downstream users are increasingly turning to long-term contracts and strategic partnerships with Chinese producers, while investor's view China-based TDI companies with strong expansion and ESG profiles as key beneficiaries of the evolving market structure.

Source: BASF