Leading overseas chemical companies raise prices, what is the outlook for the chemical market?

Ask AI · How can Chinese chemical companies seize opportunities in the global market share?

Recently, attentive investors may frequently see a phenomenon in the news: overseas chemical giants are raising prices often!

For example, from late February to early March, major international chemical companies like BASF, Huntsman, Dow, and Covestro announced multiple price increases for MDI (a key raw material for polyurethane) products in Europe, the Middle East, Africa, and even North America, with increases of 200 euros or 200-300 USD per ton.

Many friends may ask: How does the price hike by overseas chemical giants relate to A-share chemical companies? This is precisely the core topic we want to discuss: In the current complex global geopolitical landscape, the price increases by overseas chemical giants are bringing dual opportunities for domestic chemical companies—profit growth and market share expansion.

1. Why are overseas giants raising prices? Because they face a “cost surge + supply chain disruption” dual impact

This wave of price hikes by overseas giants is not due to strong demand but because costs and supply chains have pushed them into a corner.

(1) Europe’s “Gas Shortage”

Since the conflict led to Russia cutting natural gas supplies, energy costs for European chemical companies have remained high. Natural gas is not only fuel but also an important raw material for chemicals. The escalation of conflicts in the Middle East has worsened Europe’s energy crisis. Giants like Huntsman saw a 40% decline in polyurethane segment profits by 2025, and the company even suffered nearly $300 million in losses for the year. High costs mean they have no choice but to raise prices; otherwise, they would only incur losses or even shut down factories.

(2) The “Strait Lock” Crisis at Hormuz

The Middle East is not only an oil producer but also a major exporter of chemical products like LPG and fertilizers. Shipping through the Strait of Hormuz has been obstructed, pushing up global crude oil prices and causing overseas chemical giants to face raw material shortages and export difficulties. Giants like BASF and Dow have even reduced or halted production due to force majeure.

In simple terms, overseas chemical companies are now facing a “cost surge + supply chain disruption” double shock, forcing them to raise prices or even exit the market.

2. Why is this an opportunity for Chinese chemical companies?

The “crisis” faced by overseas giants is precisely the “opportunity” for Chinese firms. This global supply-side shock in the chemical industry is benefiting leading domestic chemical companies.

(1) Chinese chemical companies have cost advantages

While European companies worry about high natural gas prices, what do Chinese chemical companies have? Relatively low-cost coal, cheap electricity (including green power), and highly developed, low-cost railway logistics.

If high oil and gas prices persist for a long time, the production costs of overseas companies will rise significantly, while the comprehensive operational cost advantage of Chinese companies will become very prominent. It’s like everyone is selling the same product; if others’ costs are 80 yuan, and yours are only 50 yuan, this profit margin and bargaining power advantage will stand out.

(2) Overseas capacity exits, Chinese companies “grab market share”

High-energy-consuming capacities in Europe (such as MDI, vitamins, etc.) are accelerating shutdowns due to losses; Japanese and Korean chemical industries are also continuously closing facilities amid ongoing losses. The supply shock far exceeds demand fluctuations. Even if global demand drops by 5%, as long as overseas supply reduces by 10%, the supply-demand pattern remains tight.

Currently, China’s chemical industry accounts for 46% of global revenue, with an even higher share of capacity (. According to the European Chemical Industry Council (Cefic)’s 2025 “Facts & Figures,” based on nominal sales in 2024, China accounts for 46% of global chemical sales, while the EU accounts for 13% ). The market share lost by overseas companies may fall into the hands of Chinese leading enterprises with scale and cost advantages.

For investors wishing to grasp the trend of increasing global share of China’s chemical industry but find it difficult to analyze individual stocks, they can focus on the CSI Petrochemical Industry Index (H11057.CSI). This index mainly invests in basic chemicals, petrochemicals, and other core sectors, bundling “the three barrels of oil” with chemical giants like Wanhua Chemical and Huaxu Hengsheng, capturing the bullish trend of the petrochemical industry. The largest ETF linked to this index is the Chemical Industry ETF by E Fund (516570, connecting fund A/C: 020104/020105), with a recent scale of 2.33 billion yuan (as of March 31, 2026), making it a high-quality tool for deploying chemical market opportunities.