Hello, this is the ISOL Trend Analysis Team.
The domestic MDI market in Q1 2026 appears to be in a phase where various variables are simultaneously at play, seeking a balance rather than having a clear direction. The price increase phase centered around supply issues that emerged in the global market at the end of the year and the beginning of the year seems to be settling down, and the domestic market is not significantly deviating from this trend.
From the supply perspective, the domestic MDI market is currently in a relatively stable state. The Ningbo MDI Phase 2 facility of Wanhua Chemical, which had a significant impact on the global market, has completed its regular maintenance and has resumed normal operations, which has alleviated the supply anxiety across Asia to a considerable extent. As a result, concerns about a potential shortage in the domestic market have noticeably decreased compared to before.
Of course, there are still mentions of reduced operating rates or maintenance issues at some overseas facilities. However, at this point, it is difficult to see these variables as having enough influence to directly shake the supply flow in the domestic market. Consequently, it is judged that there is not a strong tension on the supply side that would significantly raise prices further.
On the other hand, the demand-side environment is creating much more challenging conditions for price increases. The markets related to construction materials, home appliances, and industrial foams, which are the main pillars of domestic MDI demand, are generally experiencing slow recovery. In particular, the construction and building materials market continues to see poor indicators for starts and investments, and the purchasing sentiment of downstream companies remains conservative.
In such an environment, even if price increases are attempted, it is likely that the increase will not settle naturally in the market but will be adjusted again during the transaction process. In fact, on-site purchases are continuing to focus on necessary quantities, and there is an increasing trend of responding to price increases through negotiations or adjustments in purchasing timing rather than immediate acceptance.
The ISOL Trend Analysis Team currently views the domestic MDI market as being in a state where "there is justification for attempting price increases, but the demand base is not sufficient for the market to easily accept them." In a situation where the strong driving force of supply anxiety has weakened, the direction of prices ultimately depends on the recovery of demand.
During the first quarter, it seems likely that the market will continue to explore its direction through repeated price increases and adjustments. For a clear upward trend to form, it is necessary to confirm the recovery of operating rates in downstream industries or movements to increase inventory. Otherwise, prices are likely to move within a limited range, leading to increased volatility.
Overall, the domestic MDI market in Q1 2026 is transitioning to a structure that responds more sensitively to demand-side variables than to supply-side ones. While price increases may continue to be attempted, their sustainability is likely to be limited unless demand supports them.
ISOL will continue to analyze the flow of the MDI market, focusing on the actual movements of the domestic downstream industry and the reflection of global supply variables in the domestic market.