In February 2026, BASF’s blockbuster TDI (Toluene Diisocyanate) price hike—11% for the Asia-Pacific region and an additional $200 per ton—sent shockwaves through the global chemical market, but a critical caveat “excluding Chinese mainland” has become the defining detail of a global chemical supply chain reshuffle. As nearly 24% of overseas chemical production capacity grinds to a halt under the weight of sky-high energy costs and stringent environmental regulations, China’s chemical industry has emerged as the global supply stabilizer, leveraging its complete industrial chain resilience, cost advantages, and robust export capabilities. For China’s TDI export leaders with outsized performance elasticity, and long-term undervalued chemical products now seeing a supply-demand reversal, a new window of value revaluation—driven by both cyclical recovery and structural growth—has officially opened.
Core Driver of the TDI Price Surge: Collapsing Overseas Supply, China’s Exclusive Dividend
This round of TDI price inflation is no short-term market speculation, but an inevitable outcome of global supply contraction and China’s unique production capacity edge. By early 2026, the global TDI industry was in disarray: nearly a quarter of total production capacity operated abnormally, with European giants including Covestro and BASF shutting down over 300,000 tons of capacity cumulatively, felled by soaring natural gas costs and ever-tightening environmental policies. In South Korea and Japan, production facilities faced frequent unplanned shutdowns, widening the global TDI supply gap to a critical level.
Against this backdrop, demand for TDI is on a steady rebound, fueled by recovery in downstream sectors like furniture, automotive manufacturing, and thermal insulation materials. The overseas supply shortage has triggered an export boom for Chinese TDI: monthly export volumes in 2025 surged 98.45% year-on-year, with total exports in the first three quarters surpassing the full 2024 figure. BASF’s differentiated pricing strategy—holding prices steady in China’s mainland while hiking them sharply overseas—has handed Chinese TDI enterprises a dual advantage: capturing domestic market share with stable pricing and reaping huge profits from high overseas prices and soaring export orders. Unsurprisingly, enterprises with higher export ratios and more concentrated TDI business have emerged as the biggest winners.
Cangzhou Dazhe (600230): China’s TDI Export Leader, the Purest Beneficiary
As China’s top TDI exporter, Cangzhou Dazhe stands head and shoulders above peers as the core beneficiary of the global price surge, with three unassailable competitive edges:
• Dominant export share: Its TDI export volume accounts for over 40% of China’s total, ranking first among A-share listed TDI enterprises, and it directly captures the dividends of overseas price hikes and global order transfers. In Q3 2025, its TDI exports rose 33.04% year-on-year, driving revenue and profits to reverse the market trend and grow against the odds.
• Unmatched business elasticity: TDI contributes over 60% of the company’s total revenue, making it the purest TDI target in the A-share market with no non-core businesses diluting performance. For every 1,000 RMB increase in TDI prices per ton, the company’s earnings per share (EPS) far outpaces the industry average.
• Cost and capacity moat: Boasting a 150,000-ton TDI production capacity, the company leverages integrated gasification advantages to cut production costs by 10-15% below the industry average. In a rising price cycle, this cost edge unlocks massive gross profit margin expansion potential.
The company’s performance has already proven its resilience: 2025 overseas production equipment accidents sent TDI prices soaring, driving explosive profit growth. In 2026, with overseas TDI prices continuing to climb, its performance elasticity is set to be unleashed even further.
Wanhua Chemical (600309): Global TDI Giant, the Steady Long-Term Beneficiary
Wanhua Chemical, with a globally leading TDI production capacity and a fully laid-out export business, is a long-term winner of the TDI price surge. While its diversified business portfolio results in lower TDI performance elasticity compared to Cangzhou Dazhe, the company’s integrated industrial chain and global pricing power solidify its position in the global market. Additionally, it benefits from the simultaneous price hike of MDI (Methylene Diphenyl Diisocyanate), another core product, delivering far stronger performance stability than pure TDI players amid market volatility.
Undervalued Chemicals: Four Sectors Poised for Urgent Revaluation
Beyond TDI, four chemical product sectors have endured a four-year downward price trend, currently trading at historical lows with peak inventories cleared and supply-side overcapacity resolved. These sectors now face an urgent and sustainable price hike logic driven by supply-demand reversal and policy-driven capacity optimization, with their core leading enterprises boasting high safety margins and performance elasticity—making them prime candidates for value revaluation.
1. Refrigerants (HFCs): Hard Quota Constraints Drive a Complete Supply-Demand Reversal
2026 will see a sharp reduction in hydrofluorocarbon (HFC) production quotas in China: second-generation refrigerant capacity is being phased out, third-generation refrigerant capacity is frozen, and industry inventory days have plummeted to less than 7 days, resulting in zero supply elasticity. Overseas refrigerant capacity is also shrinking, pushing up China’s export share and driving a continuous rise in the industry’s price center.
Core leaders: Juhua Co., Ltd. (600160) and Sanmei Co., Ltd. (603379), the two domestic refrigerant giants, hold significant production quotas, boast remarkable cost advantages, and exhibit extreme performance elasticity in response to price hikes.
2. Epichlorohydrin (PO): Outdated Capacity Exit + High-End Demand Boom
The highly polluting chloroalcohol process for epichlorohydrin production is being accelerated out of the market, while the advanced HPPO process faces slow capacity release, leading to sustained supply contraction. On the demand side, explosive growth in new energy and semiconductor material sectors, coupled with surging export orders, has widened the supply-demand gap to a critical level.
Core leader: Hongbaoli (002165), a pioneer in the environmentally friendly CHPPO production process, holds over 30% of the global isopropanolamine market share. Its products have entered SMIC’s supply chain, and its high-end market positioning has unlocked huge profit margins.
3. Formic Acid: Global Supply Monopoly, Price Bottoming and Rebounding
Overseas formic acid production facilities face frequent maintenance shutdowns, concentrating nearly all global production capacity in China. Luxi Chemical, the world’s largest formic acid producer, holds over 40% of the global market share, making the industry highly concentrated with pricing power fully in the hands of Chinese enterprises. The formic acid price has hit a historical bottom and is now on a clear rebound trajectory.
Core leader: Luxi Chemical (000830), which operates a coal-chemical integrated circular economy model, cuts overall production costs by 20-30%. Every uptick in formic acid prices directly drives a sharp increase in the company’s net profit.
4. Advanced Phosphorus Chemicals: Scarce Resources + New Energy Demand Explosion
Phosphorus ore reserves are scarce in China, with strict domestic mining controls leading to rigid supply. Meanwhile, demand for phosphorus chemicals from the new energy lithium iron phosphate sector is growing at a breakneck pace, triggering a revaluation of phosphorus resource value and unlocking massive price hike potential for fine phosphorus chemical products.
Core leader: Hubei Yihua (000422), which owns vast phosphorus ore reserves and has extended its industrial chain from mining to fine phosphorus chemical production, achieves a 100% resource self-sufficiency rate—an unparalleled cost advantage in the industry.
Underlying Logic: From Cyclical Cycles to Structural Advantages, China Seizes Global Chemical Pricing Power
This round of global chemical price hikes is not a simple cyclical recovery, but the result of two pivotal trends: the global industrial transfer and China’s domestic supply-side structural reform. While overseas chemical giants are forced to raise prices to offset sky-high cost pressures, Chinese chemical enterprises have realized a leap from “domestic substitution” to “global supply” by leveraging three core structural advantages—advantages that are now solidifying China’s global chemical pricing power.
1. Supply-Side: Policy-Driven Optimization Eliminates Internal Competition
China’s chemical industry policies focus on “controlling new capacity and optimizing existing capacity”, accelerating the exit of outdated, high-pollution, and low-efficiency production capacity. The industry has moved beyond the era of cutthroat internal price competition; many enterprises now voluntarily reduce production to maintain market prices, continuously improving the overall supply-demand balance and laying a solid foundation for price stability and growth.
2. Cost-Side: Integrated Industrial Chain Delivers Unbeatable Cost Advantages
China’s chemical industry boasts a complete energy and raw material supply chain, with integrated chemical enterprises achieving a comprehensive cost advantage of over 30% compared to their overseas counterparts. This unassailable cost edge gives Chinese enterprises the confidence to set global prices, even as overseas competitors struggle with energy and raw material cost inflation.
3. Demand-Side: High-End Demand Breaks Traditional Cyclical Dependencies
Surging demand for high-value-added chemicals from new energy, semiconductors, and AI server sectors has driven a structural upgrade in China’s chemical industry, breaking away from its historical reliance on traditional cyclical downstream sectors like real estate and textiles. This high-end demand boom provides a sustainable growth driver for the industry, supporting long-term value revaluation.
Epilogue: A Permanent Reshaping of Global Chemical Industry Position
BASF’s TDI price hike notice is more than a signal of a global chemical industry cycle upturn—it is a declaration of China’s rise as a global chemical power. The value revaluation of China’s TDI export leaders and long-term undervalued chemical products is no short-term speculative trend, but an inevitable outcome of the global supply chain restructuring and the continuous improvement of China’s chemical industry competitiveness.
As overseas chemical production capacity continues to shrink under cost and regulatory pressures, China’s structural advantages in the chemical sector will only become more entrenched. Enterprises that have taken the lead in positioning themselves in export-oriented, high-end, and resource-based sectors will capture the lion’s share of dividends in this cycle of recovery and revaluation. For the global chemical market, this round of China’s chemical industry rise is not just a simple valuation recovery—it is a profound, permanent value revaluation that will reshape the global chemical industry landscape for years to come.
For global buyers of TDI and high-value-added chemicals, Chinese suppliers like Achilles Chem—a reliable TDI provider with a global footprint across Kenya, Egypt, Brazil and beyond, and a proven alternative to global giants like Covestro, Wanhua and BASF—are now emerging as the go-to partners for stable supply, consistent quality and competitive pricing in the new global chemical order.
