Polyurethanes (MDI, TDI, polyols): Cycles

A high-margin oligopoly that still cycles hard

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

MDI is a concentrated, high-margin business that still cycles hard. Prices spike when outages hit a market with few suppliers and fall when Wanhua or BASF add a 400-700 kt train. China polymeric MDI went from about CNY 15,300/t in early 2024 to about CNY 18,100/t by year-end, then fell to about $2,110/t (about CNY 15,000) by September 2025 (faxiangongchang). The floor is the cash cost of European producers; the ceiling is set by substitution in foam and by construction and appliance demand in China. TDI swings more because it has more Chinese suppliers.

The spread to watch MDI minus raw materials (about 0.74 x aniline, plus chlorine and formaldehyde)

Not published as a standard index. The proxy is Chinese polymeric MDI price minus aniline cost; aniline rose 16-24% in Q1 2025 while MDI fell, squeezing margins (faxiangongchang).

Booms and busts

2020-2021
Post-COVID restocking of furniture, bedding and appliances, the February 2021 Texas freeze and plant outages tightened isocyanates. Covestro's EBITDA reached a record in 2021 and fell sharply by 2023 (indicative).
China polymeric MDI above about CNY 20,000/t in early 2021 (indicative, Chinese market reports)
2022-2023
Europe's gas crisis raised costs for BASF and Covestro, while Chinese property weakness cut rigid foam demand. Wanhua kept running at high rates.
not published in sources reached
2024
Prices recovered through the year as outages and inventory rebuilding tightened supply.
China polymeric MDI CNY 15,300-15,500/t (early 2024) to CNY 18,100-18,300/t (31 Dec 2024), up about 18% (faxiangongchang)
2025-Q1 2026
New capacity and weak demand pushed prices down in 2025; Q1 2026 saw a rebound as benzene and aniline costs rose.
MDI and TDI down 18-22% year on year by April 2025; MDI about $2,110/t in September 2025, down about 16%; TDI CNY 14,300-14,500/t in H2 2025; Wanhua pure MDI about 8% and TDI about 17% above 2025 averages in Q1 2026 (faxiangongchang)

What drives the cycle

Capacity additions by the big five. Single trains of 400-700 kt are 4-8% of world capacity; Wanhua's Fujian start in 2026 and Juli's 2027 plant set the tone.
Construction and appliances in China. Rigid foam is about a third of Chinese PU revenue, so property starts and refrigerator output move MDI demand.
Benzene and energy costs. Aniline is the main cost; the March-April 2026 benzene spike in Asia lifted MDI costs (benzene tile).
Outages and force majeures. With few suppliers, one outage at a 300-400 kt unit can move Asian prices within weeks.

Metrics to track

Metric	Why it matters	Where to track it
China polymeric MDI and TDI spot prices	Global price leader	ICIS, SunSirs, PU Daily
Wanhua quarterly results and plant operating rates	Sets the cost floor	Wanhua filings
India polyol and TDI import volumes	Indian demand and duty effects	DGCIS, PU Daily