Polyurethane Price Increase — Wanhua Chemical

1. Current Market Conditions: The Global Oligopoly Enters a Price Increase Cycle

International Giants: Huntsman, BASF, Covestro Continue Price Hikes

Domestic Leaders: Wanhua Chemical Continually Raises Listing Prices After the Spring Festival

Polyurethane MDI: Cumulative Increase of 1,000 RMB/ton, Current Price 13,950 RMB

Pure MDI: Cumulative Increase of 1,500 RMB/ton, Current Price 17,500 RMB

Conclusion: The Global Polyurethane Industry Is Entering a Clear Price Increase Cycle

2. Industry Fundamentals: Oligopoly with High Barriers

Polyurethane = Fifth Largest Plastic, Core is MDI / TDI Downstream: Building Insulation, Home Appliance Foaming, Automotive, Coatings, Adhesives, New Energy, Photovoltaics

Only 5 Companies Worldwide Possess Complete Industrialization Technology:

Wanhua Chemical, BASF, Covestro, Huntsman, Dow

CR5 Market Share Over 90%, Supply Side Firmly Controlled by Oligopolies

3. Core Logic of This Price Hike: Supply Contraction > Demand Stability

4. Demand Side: Steady Growth

Home Appliances and Building Materials Provide Basic Demand

New Energy Vehicles and Photovoltaics Bring Additional Growth

Institutional Forecast: Low-Speed Stable Growth in the Coming Years

2. Supply Side: Large-Scale Exit of European Capacity (Key)

European Natural Gas and Electricity Prices Are 8–10 Times Higher Than China’s

EU Carbon Tariffs Further Increase Costs

European MDI Fully Loaded Cost Exceeds 15,000 RMB/ton, 3,500+ RMB Higher Than Wanhua

High Costs → European Plants Operating at Losses → Forced Reduction of Load and Permanent Closure

From 2022 to 2025, Europe Will Close 37 Million Tons of Chemical Capacity

Over 800,000 Tons/Year of Polyurethane-Related Capacity Will Permanently Exit

3. Widening Supply-Demand Gap, Strong Price Support

Institutions Estimate: The MDI Supply-Demand Gap Will Expand to 1.07 Million Tons Annually by 2025–2027

Gap → Price Increase → Industry Profitability Rises

4. Wanhua Chemical: The Biggest Winner in This Price Hike

5. Global Market Share Leader

MDI and TDI Market Shares Are Both the Highest Globally

As Overseas Capacity Shrinks, Wanhua Expands Production Against the Trend, Continuing to Increase Market Share

2. Cost Advantage Outperforms Overseas Giants

Seven Generations of Technological Iteration: 28% Lower Energy Consumption Than Peers

Integrated Supply Chain: Raw Material Self-Sufficiency Over 90%

Self-Operated Power Plants: Energy Costs 35% Lower Than Overseas

During Industry Downturns: Wanhua’s Net Profit Margin Has Never Fallen Below 10%, While Overseas Companies Usually Suffer Losses

3. Significant Earnings Flexibility

Polyurethane Gross Margin Accounts for 75.3%, the Core of Profitability

Price Elasticity:

Every 1,000 RMB/ton Increase in MDI Price → Approximate 1.2 Billion RMB Increase in Net Profit

Every 1,000 RMB/ton Increase in TDI Price → 1.0–1.1 Billion RMB Increase in Net Profit

4. 2026 Performance and Valuation Outlook

Neutral Expectation: MDI Price Center Rebounds to 16,000–17,000 RMB

→ Approximate Net Profit of 16.5 Billion RMB by 2026, +30% YoY

Optimistic Expectation: Price Reaches 18,000 RMB

→ Net Profit Breaks 20 Billion RMB, +60% YoY

Conservative Valuation: 25x PE → Reasonable Market Cap of 400 Billion RMB

Price Hike Surpasses Expectations → Valuation Adjusted Upward

5. Summary

European High-Cost Capacity Exits Due to Forced Shutdowns, Global Polyurethane Supply Tightens While Demand Remains Stable

MDI/TDI Enter a New Price Hike Cycle

Wanhua Leverages Cost Advantage, Technology, and Expansion to Achieve Both Volume and Price Growth

The Most Certain Industry Leader in This Upward Cycle