Wanhua Chemical Announces: This Industrial Park Has Officially Resumed Production!

On July 29, Wanhua Chemical announced the resumption of operations at its Fujian Industrial Park. The 800,000 tons/year MDI unit, 360,000 tons/year TDI unit, 400,000 tons/year PVC unit, and related supporting facilities have completed maintenance and resumed normal production.

According to the company's announcement on May 23, 2025, titled "Wanhua Chemical Group Co., Ltd. Announcement on the Maintenance Shutdown of Fujian Industrial Park," the above facilities had been shut down for maintenance starting June 5, 2025.

As of July 29, the average domestic TDI market price was 15,875 RMB/ton, up 350 RMB/ton from the previous trading day, a 2.25% increase. Compared to the beginning of the month, prices have risen by over 30%.

The restart of these facilities holds significant importance for Wanhua Chemical. MDI (Methylene Diphenyl Diisocyanate), as one of the company’s core products, is widely used in polyurethane foams, elastomers, coatings, and more. With an annual production capacity of 800,000 tons, Wanhua commands a substantial share of the global MDI market. Similarly, TDI (Toluene Diisocyanate) is a key raw material for the polyurethane industry, and the restart of the 360,000 tons/year TDI unit further strengthens Wanhua's position in the polyurethane value chain. The resumption of the 400,000 tons/year PVC unit also supports the company’s development in the plastics sector.

Supply Shortage and Market Gap to Fill!

Another major incident in the chemical industry has caused widespread concern. At around 17:40 on Sunday, July 27, a chlorine leak occurred at Mitsui Chemicals’ TDI facility in Omuta, Japan, prompting an emergency shutdown.

The affected facility is Mitsui Chemicals’ only TDI production base. As of 23:00 on July 27, the incident at 30 Asamuta-cho, Omuta City, Fukuoka Prefecture, had led to 42 people being hospitalized.

The Omuta plant originally had an annual capacity of 120,000 tons of TDI. It had already undergone maintenance starting in early May 2025, and after completion in early July, its TDI capacity was permanently reduced to 50,000 tons/year according to a previously announced plan from March 2023. Mitsui Chemicals also plans to focus on developing high-value-added products such as ophthalmic lens materials and agrochemicals to enhance competitiveness. The unexpected chlorine leak adds further uncertainty to its TDI business development.

In recent years, global TDI production capacity has undergone significant changes. Due to rising costs and environmental concerns, many foreign producers have reduced or halted production, shifting capacity focus toward Asia. Below is a summary of recent TDI capacity developments:

• July 28: Mitsui Chemicals issued an apology regarding the chlorine leak at its Omuta plant. The facility had just completed maintenance and permanently cut capacity from 120,000 to 50,000 tons/year. It remains Mitsui's only TDI base.
• July 16: German chemical giant Covestro declared force majeure and halted operations at its 300,000 tons/year TDI unit in Germany, triggering a chain reaction in the domestic market. In one week, East China TDI prices surged from 12,000 to 14,000 RMB/ton.
• Early May: Mitsui Chemicals began maintenance at its Omuta TDI facility, lasting two months. Afterward, its capacity was reduced permanently from 120,000 to 50,000 tons/year.
• October 2024: Argentina’s Petroquímica Río Tercero halted its 28,000 tons/year TDI production in Córdoba, citing price pressure from Asia’s capacity expansion as a major reason for the shutdown.
• Early 2023: BASF shut down its 300,000 tons/year TDI and precursor units in Ludwigshafen, Germany. The same year, Japan’s Tosoh also ceased TDI production (25,000 tons/year) in Nanyo.

As a global TDI leader, Wanhua Chemical is well-positioned to quickly fill the market gap.

Restarting 1.2 Million Tons/Year Capacity – Which Raw Materials Are Affected?

Market-wise, the restart of Wanhua’s Fujian facilities and the Mitsui TDI incident will impact both the TDI and MDI markets.

In the TDI market: Wanhua Chemical has a total TDI production capacity of 1.11 million tons/year. The resumed 360,000 tons/year unit will boost supply. Meanwhile, Mitsui Chemicals’ shutdown and capacity cut have reshaped the global TDI supply landscape. Mitsui previously accounted for around 4% of global TDI capacity (120,000 tons/year), and the incident has created a noticeable supply gap.

While China’s new capacity additions (e.g., Wanhua’s 400,000 tons/year Fujian project) are expected to fill part of the gap, short-term supply changes may still drive price fluctuations. Currently, domestic TDI prices in East China range from 15,900 to 16,300 RMB/ton. Ongoing market trends should be closely monitored.

In the MDI market: Wanhua Chemical’s total MDI capacity is 3.5 million tons/year. The restart of the 800,000 tons/year Fujian MDI unit increases market supply. However, competition in the MDI market is intense, with strong supply capabilities from global players like BASF and Covestro.

Previously, news of the MDI unit shutdown in Fujian helped stop falling prices, with polymeric MDI prices in East China rebounding to the 15,000–16,000 RMB/ton range. Now, with production resumed, the increased supply may place downward pressure on prices.