TDI Recent Commodity Market Intelligence

I. Price Trends
- Latest Price: As of May 26, 2026, the TDI reference price stands at RMB 16,133.33 per ton.
- Recent Price Movement:
- From May 1 (RMB 17,833.33/ton) to May 26, the TDI price declined cumulatively by 9.53%.
- Between May 12 and May 15, prices remained stable within the RMB 16,000–16,200/ton range, followed by a modest rebound to RMB 16,133.33/ton.

II. Supply-Side Dynamics
- Capacity Distribution:
- Global TDI capacity totals approximately 3.68 million tons annually, with China accounting for over 40%. Wanhua Chemical leads globally with an annual capacity of 1.47 million tons, followed closely by BASF (920,000 tons/year) and Covestro (670,000 tons/year).
- Major domestic suppliers include Wanhua Chemical, Cangzhou Dahua (160,000 tons/year), and Gansu Yinguang (150,000 tons/year).
- Plant Maintenance & Capacity Ramp-Up:
- Hanwha’s 150,000-ton/year TDI facility in South Korea is scheduled for maintenance from June 1 to July 8, 2026, expected to reduce supply by ~45,000 tons.
- Wanhua Chemical’s 360,000-ton/year TDI plant at its Fujian Industrial Park resumed operations in May 2025; combined with its Xinjiang base, its total annual capacity reaches 1.44 million tons.
- Covestro added 60,000 tons/year of capacity via technical upgrades; overall global new capacity additions remain limited, supporting stable supply fundamentals.

III. Demand-Side Dynamics
- Domestic Demand:
- The primary downstream application is polyurethane flexible foam (>60% share), used in furniture, automotive seating, mattresses, etc.
- Impacted by the sluggish real estate sector, domestic TDI demand declined ~5% in 2025; however, export growth partially offset this weakness in 2026.
- Export Market:
- In 2025, China’s TDI exports reached 556,500 tons, up 52.83% year-on-year, with Vietnam, Brazil, and India as top destinations.
- In May 2026, monthly exports hit a record high of 51,600 tons, surging 98.45% year-on-year, driven by overseas supply shortages.

IV. Cost & Profitability
- Raw Material Prices:
- Upstream feedstocks—including toluene, nitric acid, and chlorine—exhibit price volatility affecting TDI production costs; however, no significant upward movement has occurred recently.
- Profitability:
- China’s average TDI price declined 19.4% year-on-year in 2025, yet export growth and economies of scale have partly mitigated margin pressure.
- Wanhua Chemical has enhanced profitability through technological optimization (e.g., catalyst recovery, wastewater reduction), effectively lowering production costs.

Analysis & Assessment

I. Short-Term Price Drivers
- Supply Tightening: Hanwha’s planned maintenance and low operating rates at overseas facilities are reducing short-term supply; concurrently, robust export orders provide upward price support.
- Seasonal Demand Recovery: Traditional peak seasons for downstream industries—furniture and automotive—are driving restocking demand and contributing to price increases.
- Cost Pass-Through: Rising benzene prices indirectly impact TDI cost structures, though they have not yet become a dominant pricing driver.

II. Medium- to Long-Term Supply-Demand Outlook
- Supply Side:
- Global TDI capacity continues consolidating in China, reinforcing Wanhua Chemical’s leadership position; new capacity additions remain scarce, ensuring supply-side stability.
- Aging overseas assets and mounting environmental compliance pressures are prompting curtailments or shutdowns, further increasing reliance on Chinese supply.
- Demand Side:
- Domestic demand remains constrained by the real estate downturn, while export markets—particularly Southeast Asia and South Asia—serve as key growth engines.
- Emerging applications in new energy and biomedical sectors may generate incremental demand over time.

Forecast

I. Price Outlook
- Short Term (1–3 months):
- Prices are projected to fluctuate within RMB 16,000–16,500/ton, supported by strong export orders and planned maintenance, but capped by weak domestic demand.
- Medium to Long Term (6–12 months):
- Should overseas capacity reductions persist, prices may exceed RMB 17,000/ton; if domestic demand recovers in response to policy adjustments, the price baseline could shift higher systemically.

II. Supply-Demand Balance
- Supply:
- China’s share of global capacity is expected to rise further, deepening global dependence on Chinese output—though environmental regulations may constrain operational flexibility and capacity utilization.
- Demand:
- Export markets will likely sustain growth momentum; domestic demand may gradually recover alongside real estate policy easing, albeit at a modest pace.

III. Key Risk Factors
- Geopolitical Risks: Trade frictions and tariff adjustments could disrupt export markets.
- Raw Material Volatility: Sharp increases in toluene, chlorine, or other key feedstock prices may compress margins.
- Environmental Policy: Stricter domestic environmental enforcement may limit operating rates at certain facilities.