On March 19, 2026, BorsodChem Zrt. – Hungary-based leading European isocyanates manufacturer and fully owned subsidiary of Wanhua Chemical Group – issued an official commercial notice announcing a sweeping €500 per tonne price increase for its entire methylene diphenyl diisocyanate (MDI) product portfolio across the European market. The adjustment is effective immediately for spot orders, or as permitted by existing customer contract terms for April 2026 deliveries. This announcement marks the largest single MDI price hike in the European market in 2026 to date, and follows coordinated price increases from the other three global MDI giants (BASF, Dow, Huntsman) in the region, with hikes ranging from €200 to €350 per tonne since early March 2026.

The price adjustment applies to all MDI products manufactured at BorsodChem’s 300,000 tonnes per annum (TPA) Kazincbarcika production hub in Hungary, and distributed across the European Economic Area (EEA), UK, Switzerland, and the Balkans. The table below details the official scope of the adjustment, with data verified from BorsodChem’s original commercial notice:

BorsodChem explicitly stated in the official notice that the adjustment applies to all new contract negotiations and renewing annual agreements, with no volume-based exemptions for bulk purchasers. As of April 2, 2026, the company has also notified customers that it reserves the right to implement further price adjustments if energy and raw material costs continue to rise. This announcement follows Dow’s March 5, 2026, €200/ton MDI price hike in Europe, and Huntsman’s March 20 announcement of a €200/ton natural gas surcharge for all European polyurethane products.

BorsodChem directly cited "recent developments in the Middle East, which have caused a sharp rise in European natural gas and other raw material costs" as the primary reason for the adjustment, noting that it could no longer absorb the unprecedented cost increases despite ongoing operational efficiency efforts. All supporting data below is sourced from the latest April 2026 datasets from ICIS, the European Chemical Industry Council (Cefic), and the German Chemical Industry Association (VCI):

MDI production is highly energy-intensive, with natural gas accounting for 35-40% of total manufacturing costs for European producers, while aniline (the core raw material for MDI) makes up an additional 45% of production costs. Key verified cost data includes:

• European TTF natural gas front-month prices averaged €48.2/MWh in March 2026, up 18.3% month-on-month (MoM) and 22.7% year-on-year (YoY), driven by Middle East geopolitical tensions and disrupted Qatari LNG exports, which account for 8% of the EU’s total LNG imports. Since the escalation of Middle East conflict in mid-February 2026, European natural gas prices have risen by over 50%.
• European benzene spot prices (the core feedstock for aniline production) have risen by €160 per tonne since the start of 2026, tracking Brent crude oil’s $85-90/bbl trading range amid OPEC+ extended production cuts and Middle East supply risks.
• Northwest European aniline prices rose 12.4% MoM in March 2026, directly increasing core production costs for all European MDI manufacturers, with further upward pressure expected in Q2 2026.
• EU Emissions Trading System (ETS) carbon prices reached €92/tonne of CO2 in early April 2026, up 8.7% YoY, adding an estimated €60-75/tonne to European MDI production costs.

The price hike comes amid a synchronized tightening of global MDI supply, with multiple major production facilities offline or scheduled for maintenance in Q2 2026, reducing global available capacity by approximately 12% in the first half of April 2026:

• On March 31, 2026, the Sadara Chemical joint venture (Saudi Aramco + Dow) in Jubail, Saudi Arabia, announced an unplanned temporary shutdown of its 400,000 TPA MDI plant, with no confirmed restart date as of April 2, 2026, eliminating a key source of MDI imports to the European market.
• Kumho Mitsui Chemicals’ 200,000 TPA MDI plant in Ulsan, South Korea, will enter a 30-day scheduled maintenance shutdown in early April 2026, further reducing global available supply.
• European MDI average operating rates fell to 82% in March 2026, down from 87% in February, with BASF’s 650,000 TPA MDI plant in Ludwigshafen, Germany, running at reduced rates due to raw material supply constraints.
• European MDI inventory levels dropped 9.2% MoM in March 2026, reaching a 6-month low, per ICIS supply chain surveys, as downstream buyers accelerated stockpiling ahead of expected price hikes.

This €500/ton price hike will have a direct, measurable impact on the European and global polyurethane supply chain, with data-backed impacts across core downstream sectors:

• European Construction & Insulation Sector: Polymeric MDI accounts for 58% of the raw material cost for PIR/PUR rigid insulation boards, the most widely used insulation material in EU building renovation projects aligned with the EU’s Energy Performance of Buildings Directive (EPBD). The €500/ton price hike will translate to an estimated 6-9% increase in production costs for European insulation manufacturers, with the impact expected to be passed through to construction projects in Q2 2026.
• Refrigeration & Cold Chain Sector: MDI is the core raw material for refrigeration insulation, with the European cold chain industry already facing pressure from the EU’s F-Gas Regulation. The price increase is expected to drive a 3-5% rise in commercial refrigeration equipment production costs in the region, per the European Committee of Domestic Equipment Manufacturers (CECED).
• Automotive & Industrial CASE Sector: Pure MDI is a critical component for automotive interior adhesives, sealants, and TPU materials. The price hike will add an estimated €12-18 per vehicle to production costs for European automakers, amid already tight margins in the region’s automotive sector.
• Global Trade Flow Shifts: European MDI exports are expected to decline by an estimated 15-20% in Q2 2026 following the price hike, creating increased market opportunities for Asian MDI manufacturers (including Wanhua Chemical’s China-based facilities) in Southeast Asia, the Middle East, and North Africa, where Asian suppliers currently offer a 10-15% FOB price advantage over European products.

Based on the latest April 2026 ICIS and Cefic forecasts, the European MDI market will remain in a tight supply and upward price trend through the end of Q2 2026, with a 82% probability of follow-up price hikes from BASF, Covestro, and Huntsman by mid-April 2026. For global chemical buyers, we provide the following data-backed procurement recommendations:

1. Lock in spot orders for European MDI before the full April 2026 contract price increase takes effect to mitigate immediate cost impacts, with most distributors warning of limited spot inventory availability after mid-April.
2. Diversify supply sources: Asian MDI manufacturers currently offer a 10-15% FOB price advantage over European products for bulk orders, with REACH-compliant grades available for import into the EU, providing a viable long-term cost mitigation option.
3. Adjust inventory levels: Maintain a 6-8 week safety stock for critical MDI raw materials to mitigate supply disruptions from upcoming global plant maintenance shutdowns and ongoing geopolitical risks to shipping lanes in the Strait of Hormuz.
4. Monitor contract terms: For annual contract renewals, negotiate flexible price adjustment clauses with suppliers to limit exposure to volatile energy and carbon cost fluctuations in the European market.

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