Hello, this is the ISOL Trend Analysis Team.
Recently, the presence of Wanhua Chemical in the global chemical industry seems to have entered a stage that goes beyond being simply an ‘MDI powerhouse’. This is because a company that started with technological self-reliance is now moving to a position that influences the very structure of the global chemical industry. The ISOL Trend Analysis Team views Wanhua Chemical's recent developments not merely as a growth case of a Chinese chemical company, but as a typical model emerging in the context of global supply chain restructuring.
Wanhua Chemical began by successfully producing its own MDI in the 1990s, breaking the overseas technology monopoly, and has since expanded its technological scope into high-value materials such as ADI and POE. This accumulation of technology has created a competitiveness that is different from mere production capacity expansion, and as a result, Wanhua Chemical has quickly risen to the upper ranks in global chemical company revenue rankings. Recently, it has been expanding its business focus into battery materials, new energy, and eco-friendly chemicals, based on large-scale expansions aimed at increasing global market share.
However, this growth path is not without challenges. Global competition is becoming fiercer, and the trade environment is not particularly favorable for Wanhua Chemical. Anti-dumping issues centered around BASF and Dow have significantly restricted the accessibility of Chinese MDI to the U.S. market, which has become a burden for the overseas strategies of Chinese chemical companies, including Wanhua Chemical. At the same time, the expansion of Kumho Mitsui Chemical and the relocation of facilities by global top-tier companies are also acting as pressure factors.
In this environment, it is significant that Wanhua Chemical has taken a leading role in the recent global MDI price increase phase. This is interpreted not merely as an adjustment reflecting cost burdens, but as an attempt to shift from being a ‘follower’ to a ‘regulator’ in the price determination structure. ISOL interprets this as Wanhua Chemical recognizing that it can no longer rely solely on quantitative growth and is seeking a change in its role within the industrial structure.
Now, it is necessary to turn our attention to the Korean market. The growth of Wanhua Chemical and the restructuring of the global supply chain are directly impacting the Korean chemical and construction materials industry. Particularly in material areas closely related to construction materials such as MDI, polyurethane, insulation materials, and spray polyurethane, the impact is likely to be even more pronounced.
The Korean market has local production facilities of global companies such as BASF and Kumho Mitsui Chemical, and has a different structure compared to countries with high import dependence. This also means that as the global supply chain shakes, the relative stability of domestic production bases may be re-evaluated. Wanhua Chemical's large-scale expansions and global volume increase strategies may exert price and supply pressures on the Korean market in the medium to long term, but at the same time, they can also highlight the strategic value of domestic production volumes.
However, the realistic issue is that the domestic construction materials market is still sluggish. Due to a decrease in housing starts, a contraction in private construction, and project delays, the demand for insulation materials and spray polyurethane has not been able to recover quickly. In this situation, even if global raw material prices rise, it does not seem easy to pass these costs directly onto the domestic market. ISOL is paying attention to the possibility that the Korean market may first feel the impact of supply chain changes not as ‘prices’ but as changes in ‘transaction structures and conditions’.
In other words, the growth of the softening chemicals and the restructuring of the global supply chain are likely to act in a way that gradually changes elements such as raw material sources, supply stability, and long-term contract structures, rather than immediately driving up domestic construction material prices. This can be seen as a signal for domestic companies to focus on medium- to long-term strategies rather than short-term responses.
The ISOL trend analysis team believes that the next step for softening chemicals is not simply expanding facilities, but redefining their role within the global chemical industry. This change is likely to have a quiet yet clear impact on the Korean market as well. The growth of softening chemicals is a reflection of where the global chemical industry is heading, and it seems that the Korean chemical and construction material industries are also at a point where they need to reassess their position within this trend.