Mitsui Chemicals expands MDI capacity in South Korea, while global leaders Wanhua, BASF, and Dow implement significant price hikes. Learn about global MDI supply, demand trends, and market outlook for 2025.
Mitsui Chemicals Expands MDI Production in South Korea
On December 15, Mitsui Chemicals' affiliate, Kumho Mitsui Chemicals, confirmed plans to add a new 100,000-ton/year MDI production unit at its Yeosu plant in South Jeolla Province, South Korea. After the expansion, total MDI capacity will increase from 610,000 tons/year to 710,000 tons/year. Construction is scheduled to begin in February 2026 and expected to complete by May 2027. This expansion strengthens Mitsui's position in the competitive global MDI market.
Global MDI Price Increases by Industry Leaders
Multiple MDI producers have recently raised prices due to supply constraints and rising costs:
Wanhua Chemical: Increased MDI prices in the Middle East, Africa, and Turkey by $350/ton starting December 8.
BASF: Raised South Asia MDI prices by $200/ton from November 20, aligning with maintenance schedules.
Dow Chemical: Increased prices by €300/ton across Europe, the Middle East, Africa, and India from December 3.
Hensmate: Adjusted European, African, and Middle Eastern MDI prices by €350/ton from December 2.
Covestro: Implemented incremental price increases in China, reflecting raw material and logistics pressures.
These adjustments aim to offset rising energy, raw material, and transportation costs, while responding to tightening supply.
Supply Constraints and Market Impact
China's key MDI producers, including Ningbo Wanhua, Chongqing BASF, and Shanghai Covestro, are undergoing concentrated maintenance, accounting for about 45% of national capacity. Hensmate's Dutch facility remains offline, while Middle Eastern supply is also limited. As a result, European MDI spot prices surged €100/ton, and Chinese polymeric MDI rebounded from ¥14,300/ton to ¥14,800/ton within a week.
Global MDI Production and Demand Outlook
According to the International Isocyanate Institute (ISA), global MDI production in 2025 is projected at 9.8 million tons (+6.5% YoY), slightly exceeding consumption of 9.5 million tons (+5.2% YoY). China's MDI production remains a key driver, reaching 3.65 million tons in the first nine months of 2025 (+9.8% YoY), with exports of 850,000 tons (+12.3% YoY).
Challenges and Emerging Opportunities in the MDI Industry
Despite price increases, the MDI industry faces structural challenges:
Environmental regulations, including China's VOC control plan, have increased compliance costs.
Industrial-scale green MDI technologies, such as non-phosgene processes, are developing slower than expected.
Demand is shifting toward high-value applications: building insulation, automotive MDI for new energy vehicles, and energy-efficient white goods.
Traditional sectors show slower growth, while automotive, high-end manufacturing, and polyurethane composite materials drive future market expansion. Companies like Wanhua are leveraging innovation to capture these emerging opportunities.