Industry Overview - The domestic polymer MDI market is experiencing strong growth due to the recovery in downstream industries such as home appliances, automotive, and energy-efficient construction [1][8] - In the first half of 2025, China's polymer MDI production reached 1.9267 million tons, a year-on-year increase of 13.96%, while consumption was 1.6906 million tons, up 43.38% year-on-year [1][8] - Key drivers of demand include the release of replacement demand in the home appliance sector, rising production and sales of new energy vehicles, and upgrades in insulation materials driven by enhanced green building standards [1][8] Industry Chain - The upstream of the polymer MDI industry includes raw materials such as aniline, formaldehyde, liquid chlorine, and carbon monoxide, as well as production equipment like condensation reaction kettles and gas treatment units [4] - The midstream involves the production and manufacturing of polymer MDI, while the downstream applications include white goods, construction, automotive, insulation boards, and adhesives [4] Current Industry Status - The polymer MDI industry in China is facing challenges due to trade disputes, particularly with the U.S., which has initiated anti-dumping investigations against Chinese MDI [10] - As of June 2025, the industry operating rate was 72.43%, a decrease of 11.75 percentage points month-on-month and 2.93 percentage points year-on-year [10] - The price of polymer MDI in China was 15,500 yuan per ton at the end of June 2025, down 11.46% year-on-year due to seasonal demand and export obstacles [10] Key Enterprises - Wanhua Chemical is the leading company in the domestic polymer MDI industry, with a production capacity of 3.8 million tons per year as of the end of 2024, and plans to expand to 4.5 million tons by mid-2026 [12][14] - Other significant players include Shanghai Lianheng, BASF, and Covestro, which also hold important positions in the Chinese market [12][16] Industry Development Trends 1. **Technological Upgrades and Green Transformation**: The industry is undergoing a shift towards green low-carbon technologies, with leading companies like Wanhua Chemical adopting non-phosgene processes that reduce energy consumption by 23% and carbon emissions by 20% [19] 2. **Optimized Market Demand Structure**: The diversification of downstream applications is driving an upgrade in MDI demand structure, particularly in energy-efficient construction and the automotive sector [20] 3. **Globalization and Policy Adaptation**: Companies are accelerating overseas capacity expansion to mitigate trade friction and carbon tariff pressures, with Wanhua Chemical and BASF expanding their production bases abroad [22]