Hello,the ISOL Trend Analysis Teamis here.
In this article,we analyzed the simultaneous MDI price increases by global chemical majors such as BASF, Huntsman, and Wanhua,focusing on the underlyingcost increase structure and the medium to long-term trends in the global MDI market.As this is an important signal for understanding the polyurethane raw material market after 2025, we will calmly summarize its impact on the entire industry.
1. Global MDI price increase is not a one-time issue.
On November 20, 2025,
BASF officially announced a price increase of $200 per ton for Lupranate® MDI products targeted at the South Asia region.The company clearly mentioned the background of this adjustment asincreased transportation costs, rising energy costs, and enhanced regulatory compliance costs.
The important point is that this increase is not a one-time measure.Since 2025, global MDI and polyurethane raw material manufacturers have already implemented price increases of $100 to $300 per ton multiple times, and BASF's announcement is an extension of that trend. Given that Huntsman and Wanhua are also adopting similar pricing strategies, this can be interpreted asa common industry movement reflecting structural cost pressures.
2. Structural cost increases occurring in the MDI production process.
MDI is a representativeenergy and raw material-intensive chemical product.The cost structure of MDI production examined by the ISOL Trend Analysis Team has the following characteristics.Raw material costs: about 60-65% of total costs
(very sensitive to fluctuations in upstream raw material prices such as aniline and phosgene)
Energy costs: about 15-20%(direct impact of rising electricity and gas costs due to the high-temperature, high-pressure process characteristics)
Logistics and regulatory costs
: continuously increasing due to strengthened hazardous material transportation regulations and global logistics network instability.In particular, recently,
the volatility of energy prices
andthe strengthening of environmental and safety regulations
are acting simultaneously, creating a situation where manufacturers can only defend their profit structure through price increases.
Logistics and regulatory costs: Strengthening of hazardous materials transportation regulations and ongoing increases due to global logistics network instability
Especially recently,energy price volatilityandstrengthening of environmental and safety regulationsare simultaneously at play, creating a situation where manufacturers can only defend their profit structure through price increases.
3. Changes in the Supply and Demand Structure of the Global MDI Market
MDI isa key raw material for various polyurethane products such as rigid/flexible foam, coatings, adhesives, and elastomers.
As of 2024, the global MDI market size is expected to beapproximately 29.2 billion dollars, and by 2033,it is projected to grow to50.2 billion dollars, with an annual growth rate (CAGR) of 5.9%.
Key drivers of demand include
insulation materials for construction (strengthening energy efficiency regulations),
automotive interior materials and seats (trends in electrification and lightweighting),
flexible foam for furniture,
and the expansion of cold chain logistics based on refrigeration and freezing.
Regional structural changes
Regional structural changesThe Asia-Pacific region
accounts for about half of global MDI consumption.China is transitioning from a reliance on imports to a local supply-centered structurethrough large-scale facility expansions.
India and Southeast Asia have very high medium to long-term demand potential due to increased infrastructure investment and industrial growth.
4. Price Pass-Through Mechanism and Impact on Downstream Industries
The increase in MDI prices does not stop at raw material costs.
It is gradually passed along the production chainfrom foam manufacturing to finished product manufacturing to consumer goods prices.
According to sensitivity analysis by the Isol Trend Analysis Team,
if MDI prices rise by 100 dollars per ton,,
the overall cost structure of downstream companies will increase byabout 3-5%.
The particular issue is withflexible foam companies.These companies operate on average with a low margin structure of
8-12%, so an increase in raw material prices will inevitably lead toprofitability pressure. In the short term, smaller companies that find it difficult to pass on prices are likely to face increased financial burdens.
5. The Significance of Pricing Strategies Targeting the South Asian Market
It is also noteworthy that BASF has chosen the South Asian region as the target for this price increase.
The region has the following characteristics.
MDIHigh dependence on imports
Due to limitations in logistics infrastructure High proportion of transportation costs
Local production capacity is limited compared to the growth rate of the industry
In this structure, price adjustments are interpreted as a strategic choicefor optimizing profitability by region.
In the future, other global suppliers, including Huntsman and Wanhua,are likely to expand similar regional differential pricing strategies,which could lead to a restructuring of the global MDI pricing systemin the long term.The ISOL trend analysis team will continue to
analyze price fluctuations and changes in demand structure in the global chemical and materials industry,
providing practical insights. Thank you.