2. Supply Side: Multiple pressures trigger global production cuts, supply gap exceeds expectations
If the cost side provides the 'foundational support' for this round of increases, then the unexpected contraction on the supply side is the direct trigger igniting the rapid price ascent.
From late 2025 to early 2026, influenced by persistently tight feedstock supply, geopolitical conflicts disrupting logistics and production schedules, and combined with scheduled cyclical maintenance plans, core polyurethane chain facilities globally-including those for MDI, TDI, Polyether Polyols, and PO-experienced a historically rare concentration of production cuts. Multiple units were forced to operate at reduced rates, with some shutting down directly. According to incomplete statistics, in Q1 2026 alone, over 1.9 million tonnes of global MDI capacity was simultaneously affected, creating a supply gap far exceeding previous market expectations. This synchronous supply-side contraction across companies and regions is an extremely rare historical phenomenon, and its impact on prices far exceeds that of normal maintenance at a single facility.
3. Demand Side: Demand recovery provides mild but sustained positive support
Compared to the sharp changes on the supply side, the pace of demand recovery is relatively mild, but its structural significance should not be underestimated.
China's extension of its home appliance replacement subsidy policy into 2026 directly provides consumption support for polyurethane rigid and flexible foam segments. The real estate market is gradually stabilizing under policy support, with the release of demand for improved housing driving steady growth in the use of building insulation materials, from which polyurethane insulation boards benefit significantly. End-consumption in automotive interiors, footwear, and apparel also maintains stable growth.
Meanwhile, a phased easing of US-China trade friction and marginal tariff reductions have spurred a rapid recovery in Chinese exports of home appliances and furniture, further expanding export demand for related polyurethane products. Although demand-side improvement has not yet entered an explosive growth phase, its sustainability and structural characteristics provide the necessary fundamental support for high-price operations.
4. Force majeure declarations and price hike notices from leading firms intensify market expectationsBehind the collective price hikes in the industrial chain, the actions of leading companies have played a key 'accelerator' role. Facing dual pressures of sharply rising feedstock costs and persistently tight supply, major global polyurethane producers have successively issued force majeure declarations while densely distributing price hike notices, with some companies implementing multiple rounds of increases in a short period. This series of actions has not only directly pushed up the price center for core products like MDI and TDI but has also created a ripple effect, pulling up prices for supporting products like Polyether Polyols, catalysts, additives, blowing agents, and silicone oils. This further solidifies market expectations for sustained high prices, creating a self-reinforcing cycle of 'tight supply → price hike expectations → advance stocking → even tighter supply'.