March 5, 2026 – The global polyurethane industry has entered a full‑scale cost crisis, triggered by escalating geopolitical tensions in the Middle East, runaway energy prices, and crippling shipping disruptions. In a rapid succession of announcements, Huntsman and Dow have imposed emergency surcharges and price hikes on Methylene Diphenyl Diisocyanate (MDI), a foundational raw material for polyurethane manufacturing. These moves signal intensifying cost pressures that are rippling through supply chains worldwide.
Huntsman Adds €200/MT Natural Gas Surcharge on MDI
On March 5, 2026, Huntsman Corporation declared a €200 per metric ton natural gas surcharge for all MDI products supplied to Europe, Africa, Middle East, and India (EMEI).
The company directly attributed the additional charge to soaring European natural gas prices, driven by severe deterioration in the Middle East geopolitical situation. Energy is a critical input for MDI production, and producers can no longer absorb the unprecedented cost increases.
This is not Huntsman’s first adjustment in recent months:
• Dec 2, 2025: €350/MT MDI price increase across Europe, Africa, Middle East
• Feb 17, 2026: $260/MT MDI hike in the United States
• Mar 5, 2026: €200/MT natural gas surcharge in EMEI region
Huntsman emphasized that the surcharge takes effect immediately (where contracts allow) and may be adjusted further if geopolitical risks and energy costs continue to rise.
Dow Follows with Immediate MDI Price Hikes
Within the same day, Dow Inc. matched the emergency pricing actions:
• Europe: +€200/MT on MDI
• India, Middle East, Africa (IMEA): +$300/MT on MDI
Dow explicitly cited sharply rising energy, raw material, and logistics costs stemming from Middle East instability as the core reason.
Since Q4 2025, major producers including Huntsman, BASF, Dow, and Wanhua Chemical have rolled out successive price increases across Europe, Southeast Asia, Middle East, and Africa.
In China, domestic polymeric MDI prices have already climbed to RMB 15,200 – 15,500/MT.
Triple Pressure: Geopolitics, Energy, and Shipping Collapse
The 2026 MDI rally is no ordinary seasonal uptick. It stems from a perfect storm of three simultaneous crises:
1. Middle East Conflict Drives Energy Chaos
Since late February 2026, military conflicts and threats to key waterways have sent European natural gas prices surging.
Natural gas is a primary energy source for MDI production, creating an unavoidable cost floor.
2. Global Shipping Paralysis & War Surcharges
Two of the world’s most critical trade arteries – the Strait of Hormuz and the Red Sea – are severely disrupted.
Major carriers have suspended passages or imposed extreme surcharges:
• Maersk: suspended Strait of Hormuz transits
• MSC: halted all Middle East bookings
• CMA CGM: Emergency surcharge up to $2,000–3,000/container
• Hapag-Lloyd: War Risk Surcharge (WRS) as high as $3,500/TEU
These delays and surcharges drastically increase the delivered cost of MDI and chemical raw materials.
3. Seasonal Restocking Amplifies Upside
Traditionally, February–March brings post‑holiday demand recovery in China and Southeast Asia, plus pre‑Ramadan inventory building in the Middle East.
This year, seasonal demand has collided with supply tightness, creating ideal conditions for price increases.
Downstream Impact: PU Industry Faces Margin Squeeze
MDI is indispensable in:
• Rigid insulation foams (appliances & construction)
• Flexible foams (furniture & bedding)
• Automotive components
• CASE (Coatings, Adhesives, Sealants, Elastomers)
The consecutive price hikes are directly raising end‑product costs.
European and Middle Eastern manufacturers already burdened by high energy costs now face further margin compression, with smaller producers at risk of slowdowns or shutdowns.
Market Outlook: Uncertainty Remains High
The Middle East situation remains the single largest variable.
Further escalation will almost certainly lead to:
• Higher energy costs
• More shipping disruptions
• Additional MDI surcharges from Huntsman, Dow, and others
Meanwhile, returning post‑holiday demand in China and Southeast Asia is expected to provide continued support for global MDI prices in the coming weeks.
For MDI Buyers: Stability & Alternative Supply Become Critical
In this volatile environment, downstream manufacturers urgently need stable‑quality, reliably supplied MDI to maintain production and mitigate cost risks.
As a trusted global supplier, Achilles Chem provides high‑quality MDI (Desmodur 44 V 20 L equivalent) that serves as a reliable, cost‑effective alternative to brands including Wanhua, BASF, Covestro, Huntsman, and Dow.
With a global footprint covering the US, Germany, India, Vietnam, Brazil, and beyond, we deliver consistent performance, secure logistics, and professional technical support to help you navigate the turbulent PU raw material market.
