BASF, Huntsman, Wanhua Chemical, Evonik and Other Giants Announce Another Round of Price Increases

Starting March 20, 2026, Huntsman's Construction Solutions business will impose a natural gas surcharge of €200 per ton on all products in the European region.

Notably, Huntsman had previously announced on March 5 a natural gas surcharge of €200 per ton on all MDI products sold in the Europe, Africa, Middle East, and India (EMEI) region. At that time, the price adjustment was limited to core polyurethane categories—a targeted response for energy-intensive products—whereas this new surcharge applies to all products in the European region.

On the same day, Covestro Shanghai Co., Ltd. announced that from April 1, 2026, its PU system product prices will increase by 30%. Evonik announced price increases by category for all markets in the Asia-Pacific region. Depending on the product platform and origin, increases could reach up to 20%, covering fumed silica, metal oxides, precipitated silica, rubber silanes, and functional silanes. The adjustment takes effect immediately.

On March 19, Wanhua Chemical's subsidiary BorsodChem announced a price increase of €500 per ton for all MDI products, effective immediately or as permitted by contract terms.

Meanwhile, BASF announced significant price increases starting March 18 for home care, industrial cleaning, and industrial formulation products in Europe, with increases of up to 30%. Specifically, Neol® neopentyl glycol polyol products in Europe will increase by €350 per ton, and formic acid prices will increase by €250 per ton. Earlier, on March 4, BASF had announced global price increases of up to 20% for antioxidants, processing stabilizers, and light stabilizers used in plastics applications.

Additionally, on March 17, German specialty chemicals company LANXESS announced immediate price increases of 50% or more for all non-contract quantities of alkylated diphenylamine (ADPA) and diphenylamine (DPA).

Previously, on March 5, Dow announced MDI price increases of €200 per ton in Europe and $300 per ton in India, the Middle East, and Africa. Since December 2025, BASF, Covestro, Wanhua, and Huntsman have implemented multiple rounds of MDI price increases.

Regarding the reasons for the price hikes, all companies stated in their announcements that they were due to significantly higher energy, raw material, and logistics costs caused by shipping disruptions in the Strait of Hormuz.

As these surcharges take effect, a ripple effect on the European chemical industry chain is expected. Huntsman's products are widely used in construction insulation, adhesives, polyurethane materials, industrial coatings, and many other fields, with downstream applications spanning construction, automotive manufacturing, home appliance production, packaging materials, and more. The full implementation of the €200 per ton surcharge will directly increase raw material procurement costs for downstream enterprises, further compressing profit margins in end-product manufacturing. For sectors already facing weak demand, such as construction and home appliances, rising costs may further dampen market activity and intensify the overall pressure on European manufacturing. More concerning is whether more European chemical companies will follow Huntsman's lead.

Industry Warning Issued in Europe

The European chemical industry has always been heavily dependent on natural gas, which serves both as a core energy source for production facilities and a key raw material for certain chemical products. Its price fluctuations directly determine the baseline of production costs. The recent sharp deterioration in the geopolitical situation in the Middle East has directly impacted global energy supply chains, causing natural gas prices to surge dramatically. Energy import costs have risen sharply in the short term, and prior to this, European energy costs were already three to four times higher than in Asia and the United States—adding further strain to European chemical companies that have yet to fully recover from the previous energy crisis.

Recently, the German Chemical Industry Association (VCI) issued an industry warning, stating that the war with Iran and the closure of the Strait of Hormuz could have severe repercussions for the chemical industry, raising concerns about supply bottlenecks for raw materials such as ammonia, phosphate fertilizers, helium, and sulfur. The longer the conflict lasts, the more severe the challenges facing the industry will become. The association represents over 2,000 chemical and pharmaceutical companies in Germany, covering more than 500,000 employees.

Additionally, on March 11, INEOS issued a statement emphasizing that UK energy security must take priority over net-zero targets, pointing to a clear flaw in the UK's energy system: severely inadequate natural gas storage and production capacity. While countries like Germany and France have gas reserves sufficient for several months, the UK's reserves are only a fraction of that. In the event of a global supply disruption, the UK would be among the hardest hit, bearing the greatest impact. The resulting price surges would ultimately be borne by ordinary citizens.

Data shows that since 2022, nearly 25 million tons of chemical production capacity in Europe has been shut down, sold, or placed under evaluation for shutdown or sale, equivalent to 9% of the region's total chemical capacity in 2021. Germany has been the hardest hit, with approximately 7 million tons of chemical capacity already shut down or facing closure and sale, followed by the Netherlands. The large-scale withdrawal of petrochemical production assets, coupled with multiple bankruptcies, is gradually eroding the integrated industrial cluster advantages that have long supported the competitiveness of the European chemical industry.

Recently, Dr. Markus Kamieth, CEO of BASF, stated: "More capacity closures, bankruptcies, and restructurings are on the horizon. It can be said that the sale of certain assets in Europe also means that the restructuring process has been delayed." He emphasized: "The restructuring era for the European chemical industry is not yet over."

Japanese Photoresist Faces Supply Disruption Risk

It is worth noting that beyond Europe, several Japanese companies have recently issued warnings regarding the potential blockade of the Strait of Hormuz. If shipping cannot resume over the long term, raw material supply chains could be completely severed, leading to a significant reduction or even shutdown of advanced photoresist production, posing a systemic crisis for the global semiconductor materials supply chain. Japanese companies supply over 90% of the world's ArF photoresist and nearly 100% of its EUV photoresist. Among them, JSR, Shin-Etsu Chemical, and Tokyo Ohka Kogyo have stated that due to the Strait of Hormuz blockade, their inventory of key raw materials for photoresist is only sufficient for three to six months.

Japan relies on the Middle East for over 95% of its crude oil and naphtha imports, with 70–80% of these imports passing through the Strait of Hormuz. Its naphtha reserves are only sufficient for 20–30 days, and the buffer for high-purity raw materials for photoresist is extremely limited.

Industry analysts suggest that a short-term blockade (1–3 months) of the Strait of Hormuz would lead to a 20–50% surge in raw material costs, price increases, extended delivery times from four weeks to eight to sixteen weeks, and reduced capacity utilization. A mid-term blockade (3–6 months) would result in widespread production cuts or halts for ArF and EUV lines, a sharp reduction in global supply of advanced photoresists, a significant drop in corporate revenues, and forced layoffs or contraction. A long-term blockade (6 months or more) could permanently weaken the competitive advantage of Japanese companies, leading to a loss of market share. The world's most advanced chips—from Apple's A-series processors to Nvidia's AI chips—depend on these photoresists. Without them, advanced process nodes below 2nm would be impossible to achieve.