China Chemical Dividend 2026: TDI Export Leaders & Undervalued Chemical Revaluation

China’s Dividend in Global Chemical Price Surge: TDI Export Leaders Lead, Undervalued Chemicals See Definite Revaluation

In February 2026, BASF announced a sharp TDI price increase: 11% rise in Asia-Pacific, plus $200/ton—with a clear note: “excluding Mainland China”. This move has become a landmark signal in the restructuring of the global chemical industry.

As nearly 24% of overseas chemical capacity has been halted due to extreme energy costs, China’s chemical sector has emerged as a core global supplier, enjoying a unique structural dividend. Export-oriented leaders in TDI and long-term undervalued chemicals are now entering a clear window of cyclical and valuation revaluation.

1. Core Logic of the TDI Rally: Overseas Supply Collapses, China Benefits Alone

The global TDI market is facing a severe supply crunch, not short-term speculation.

By early 2026, high natural gas prices and strict environmental rules forced major European producers such as Covestro and BASF to cut more than 300,000 tons of capacity. Facilities in Japan and South Korea also suffered frequent shutdowns, widening the global supply gap.

Meanwhile, demand from furniture, automotive, and insulation materials is recovering.

• China’s TDI monthly exports in 2025 surged 98.45% year-on-year

• Exports in the first three quarters already exceeded the full year of 2024

BASF’s differential pricing—raising prices globally but keeping them stable in China—has given Chinese TDI companies a double advantage:

stable domestic prices + high export profits.

Cangzhou Dazhe (600230): Top TDI Exporter, Biggest Beneficiary

• Export leader: Over 40% of China’s TDI exports, No.1 among listed firms

• Highly pure TDI play: TDI contributes over 60% of revenue

• Cost advantage: 10%–15% lower production cost via integrated gasification

• Strong performance elasticity: Profit jumps sharply with every price rise

Wanhua Chemical (600309): Global Leader, Stable Long-Term Winner

With world-scale TDI capacity and a full global sales network, Wanhua benefits from both TDI and MDI price increases. Its integrated industrial chain supports stable profitability and long-term global competitiveness.

2. Undervalued Chemicals: Supply-Demand Reversal + Policy Clearance

Beyond TDI, several key chemicals have been in a four-year downturn, now at historical lows with supply clearing and strong rebound momentum.

(1) Refrigerants (HFCs)

• Strict production quotas, capacity frozen or reduced

• Industry inventory below 7 days, supply elasticity near zero

• Overseas capacity shrinks; China’s export share rises

Leaders: Juhua Co., Ltd., Sanmei Co., Ltd.

(2) Epichlorohydrin (PO)

• High-pollution capacity being phased out

• High-end demand from new energy and semiconductors booms

Leader: Hongbaoli (supplier to SMIC, high-end positioning)

(3) Formic Acid

• Global capacity concentrated in China

• Luxi Chemical holds >40% global share, strong pricing power

Leader: Luxi Chemical

(4) High-end Phosphorus Chemicals

• Scarce phosphate ore, strict mining controls

• Explosive demand from lithium-iron-phosphate batteries

Leader: Hubei Yihua

3. Underlying Logic: China Gains Global Pricing Power

This round of chemical revaluation is driven by structural shifts, not just short cycles.

• Supply side: Policy limits new capacity, outdated capacity exits

• Cost side: Full industrial chain, 30%+ cost advantage vs overseas

• Demand side: High-end growth in new energy, semiconductors reduces cyclicality

China’s chemical industry has moved from local substitution to global supply and is establishing real pricing power.

Conclusion

BASF’s TDI price hike is more than a market signal—it marks the rise of China’s chemical industry.

The revaluation of TDI export leaders and low-positioned chemicals is not a short cycle, but a structural trend from global supply chain restructuring. As overseas capacity continues to shrink, China’s chemical advantages will strengthen further.

Companies focused on exports, high-end products, and scarce resources will be the biggest winners in this new era.