Expansion continues and exports remain important, while product mix and cost control become the new dividing lines
In 2026, China's polyether polyol (PPG) industry continues to expand, but the most important issue is no longer simply "how much capacity has been added." Under the current statistical methodology, China's polyether polyol capacity increased from 10.569 million t/y in 2025 to 11.209 million t/y in 2026, up about 6.1%. Meanwhile, China exported approximately 1.773 million tonnes of polyether polyols in Jan–Jul, up 14.6% year on year, while imports fell to around 0.124 million tonnes, down 29.5%. Supply capability continued to expand and exports remained an important outlet for domestic supply, while the price level was also significantly higher than last year. By the end of September, 2026 average prices for six mainstream grades-flexible foam, high-resilience, CASE, rigid foam, conventional POP and high-resilience POP-were about 21%–27% above their full-year 2025 averages. However, higher prices did not translate into improved margins for every product, and structural divergence in China's polyether polyol market became increasingly pronounced.
Figure 1 Key Data for China's Polyether Polyol Market in 2026
Expansion Has Not Ended Above 11 Million t/y
At the company level, China's polyether polyol capacity posted a net increase of about 0.64 million t/y in 2026. New capacity or capacity adjustments were recorded at Changhua Chemical, Guangxi Huayi, Guangxi Tongkun, Shandong Longhua and other producers, while effective capacity at certain companies was restated based on actual plant conditions. The 11.209 million t/y total is therefore not a simple sum of all newly built projects; it reflects new units, revamps and adjustments to existing capacity. More importantly, the project pipeline remains substantial. Based on projects currently tracked, planned or proposed projects for 2027 alone already exceed 1.40 million t/y, involving Changhua, Wudi Dexin, Befar, INOV, Sinochem Dongda, Huajin United Petrochemical and others. Although the eventual start-up dates of some projects remain uncertain, one point is clear: supply-side competition has not ended. The industry's focus will gradually shift from whether new supply is coming to how that supply can be absorbed by the market.
Figure 2 China Polyether Polyol Capacity Changes and the Project Pipeline
