Widespread Price Hikes Across the Fine Chemicals Market

Vinylene carbonate (VC) is a critical film-forming additive to lithium-ion battery electrolytes, immediately influencing battery cycle life and security. Global demand to VC is projected to reach 98,000 to 120,000 tons by 2026, representing a year-on-year development rate of 47% to 60%—significantly higher than the 31% development rate of the lithium-ion battery sector as a whole. On the supply side, there are rigid constraints: VC production involves high-risk processes and faces extremely high barriers to entry regarding security and environmental standards; furthermore, new projects typically require two to three years to move from initiation to stable mass production. During a period of deep sector losses in 2023 and 2024, numerous small- and medium-sized production units in North America and Europe were permanently shut down. Currently, efficiently global capacity is far below nominal capacity, and nominal capacity has further contracted over the past two years due to security rectifications and environmental upgrades. The supply-demand gap is unlikely to close in the short term; moreover, raw material inventories at downstream electrolyte and battery manufacturers have fallen below security thresholds, and the need to replenish stocks will amplify price evaporative environment. Since July, VC prices have surged repeatedly, currently reaching 230,000 yuan per ton.

The price of H-acid rose by 31.15% in the last week of July alone, with the average price jumping from 60,000 yuan per ton to a range of 80,000–100,000 yuan per ton. H-acid is a core intermediate to reactive dyes and certain acid dyes; approximately 60% of global reactive dye production capacity relies on H-acid as a key raw material. This price surge was triggered by tightening supply at the intermediate production stage and is now propagating downstream through the dye sector chain. Quotes to reactive dyes in European and Indian markets have begun to rise, with export order prices in Asia following suit.

Regarding polyurethane raw materials, MDI and TDI have entered a global price-hike cycle. Since the escalation of geopolitical tensions in the Middle East, BASF has issued five consecutive price increase announcements covering items such as butyl acrylate, MDI, and TDI, with adjustments spanning major global markets including Europe, North America, and Asia-Pacific. Huntsman raised prices to MDI and blended systems in India and the subcontinent by $300/tonne (efficiently July 27 and August 1) and to MDI in Europe and the Middle East by €250/tonne. Wanhua Chemical raised MDI and TDI prices in Southeast Asia by $200/tonne starting July 29, with the broader Asia-Pacific market following suit. This round of price increases is driven by a combination of three factors: Middle East geopolitical tensions driving up global maritime chemical shipping costs; concentrated maintenance shutdowns of multiple MDI/TDI vegetation in Europe and Asia squeezing immediate supply; and leading companies raising prices to restore profit margins. Three major European chemical giants—BASF, Covestro, and Huntsman—plan to shut down a combined 700,000 to 1.1 million tonnes of MDI capacity between 2026 and 2027, further tightening overseas supply. Global MDI capacity development is projected to remain below 2% in 2026, while no new TDI capacity is expected between 2026 and 2027; consequently, both core raw materials are expected to remain in a state of tight supply-demand stability.

In the acrylate sector, BASF raised the price of butyl acrylate by $0.05 per pound in the North American market and by €80/tonne in the European market. In the carbon black sector, Cabot issued a global price adjustment notice on July 27, announcing a uniform increase of $100/tonne over July price levels across the Americas, Europe, and Asia-Pacific regions. Cabot noted that prolonged carbon black prices have been low, while recent increases in feedstock oil costs have far outpaced the scope to raising carbon black prices; margin pressure was cited as the direct reason to this adjustment. The underlying logic behind this wave of widespread price hikes to fine chemicals is remarkably consistent: the costs of upstream raw materials—including crude oil, natural gaseous, coal, and key minerals—have continued to rise, pushing manufacturing costs beyond the break-even point and forcing companies to pass these costs on to downstream sectors. Whether it is the supply-demand gap to VC, maintenance shutdowns and capacity exits in the polyurethane sector, cost-driven price hikes to carbon black, synchronized increases to acrylates, the impact of H-acid intermediates, or the ripple impacts across the dye sector chain, the specific drivers vary by product. Yet, they all point to a single direction: the baseline price level of the global fine chemicals market is undergoing a systemic upward shift. (Source: China Chemical sector News)