Recently, Wanhua announced an increase of USD 100/ton in its PMDI prices in ASEAN, effective from February 28, 2025 or in accordance with the terms of the contract. The move is aimed at offsetting rising transport and production costs, ensuring supply chain security and continuing to deliver value to customers.

This is another round of price increase after Wanhua announced a USD 200/ton price increase in this January, showing its firm confidence in polyurethane demand in ASEAN.

With Vietnam, Thailand and Indonesia being the biggest PU consumer markets, leading Southeast Asia saw a significant growth in PU demand in 2024. 

Recently, the United States imposed additional tariffs on imports from China, Mexico and Canada, reshaping the landscape of international trade. Southeast Asia would probably benefit from that. According to the website East Asia Forum in Australia, Vietnam’s ways of developing its economy is exemplary in a turbulent world. Specifically, under its new leadership the country has set out to implement large-scale infrastructure projects and to reform its political system, and set the goals of growing into a developed country by 2045 by promoting economic transformation, attracting global investments, stepping up anti-corruption efforts and adopting a sophisticated diplomatic strategy. 

Vietnam

Vietnam is one of the largest PU demand markets in Southeast Asia, which are applied in PU insulation panels, home appliances, automotive and spandex sectors. In 2024, its PMDI apparent demand experienced a remarkable double-digit growth.

Home appliances: Owing to its unique geographical location, well-known domestic household appliance manufacturers such as TCL, Haier, Midea and Gree started to build factories in Vietnam in the 1990s. At the same period, supported by Vietnamese government’s favorable policies, their Japanese and Korean counterparts also started to build industrial parks and infrastructure in the country. These companies have helped to improve the industrial chain for home appliances, making Vietnam a popular destination for relocation of manufacturing capacities. In particular, Vietnam has become a stepping stone for many Chinese companies to export to Europe and the United States since preferential tariffs were introduced for Vietnamese imports. Currently, leading Chinese refrigerator manufacturers have built more than a dozen manufacturing sites in Southeast Asia.

Automobiles: In February, Changan, Geely and Chery Automobile announced that they would set up factories in Vietnam in 2025 and 2026 to accelerate their efforts to go global. Later this year, Changan and Vietnam’s Kim Long Motor will start to construct a 5 to 7-seater passenger vehicle factory in Hue City, which has a design capacity of 50,000 units/year. At first, locally-made parts and components will account for 40% of all the parts and components used by the plant. And the figure is expected to rise to 80% by Q2 2026. Geely's Thai factory will start to be constructed in 2025 and go into production in 2026. Vehicle brands produced by the factory will expand from LYNK&CO to other models. Chery Automobile in conjunction with its partner  has planned to invest approximately 20 trillion dong to build a factory in the Thaco-Thai Binh Industrial Park, which is expected to be completed in 2026 and is designed to produce Omoda and Jaecoo models. 

Thailand  

As the largest automotive producer in ASEAN, Thailand continues to attract investments from leading Chinese carmakers.  right rudder truck In December 2024, Foton Motor and Thailand's Chia Tai Group announced that they would invest Thai bhat 1 billion to build a factory in Thailand for making right-rudder trucks and passenger coaches, which is capable of manufacturing 1,800 units per year and is expected to produce more than 7,200 units within three years. 80% of vehicles produced by the plant are for domestic sale, and 20% for export. On July 4, 2024, BYD announced that its Thai factory had been completed and put into production, marking accelerated progress in going global.

All these investments will certainly lead to increased consumption of PU materials in Vietnam.