Global polyurethane feedstock markets are entering a renewed phase of price momentum as producers across regions move to restore margins amid rising input costs and tightening supply discipline. Over recent weeks, coordinated pricing actions across isocyanates and polyols have highlighted firmer global fundamentals. For India, highly import-dependent across key PU feedstocks, these developments signal building near-term cost pressures, particularly as China’s policy shift on polyether polyols approaches its April implementation.
Since early February, global suppliers have announced successive price increases. On February 4, BASF raised TDI prices by USD 200/tonne across Asia-Pacific (excluding China) and the Middle East & Africa, citing higher energy, logistics, and regulatory compliance costs. This was followed on February 17 by Huntsman, which increased MDI prices by USD 260/tonne and Polyols by USD 110/tonne in the US, reflecting sustained cost inflation and a tightening supply-demand balance. On February 19, Covestro implemented a USD 220/tonne increase on MDI in North America, while simultaneously limiting pre-increase volumes, signalling stronger supply discipline. On February 25, BASF announced an additional USD 200/tonne increase on MDI in ASEAN markets, driven by raw material inflation and regional volatility.
While most major Chinese producers have not yet announced broad domestic price hikes, export indicators are already firm. Market sources indicate that Cangzhou Dahua is currently quoting TDI export offers at around USD 1,950/tonne FOB, supported by tight supply conditions and rising production costs. Export prices remain elevated, reinforcing the broader global pricing trend.
China’s upcoming policy shift on Polyether polyols is emerging as a key inflection point for regional markets. From April 1, China will cancel export VAT rebates on Polyether polyols, raising effective export costs. Given that China accounted for roughly 42% of India’s polyol imports in 2025, the policy change carries direct implications for Indian pricing dynamics. Following the Lunar New Year, Chinese producers have returned with mixed strategies: some suppliers have begun raising prices in a gradual, coordinated manner, others have already factored the full 13% VAT impact into offers, while a few remain cautious pending formal implementation. Nonetheless, the direction is clear, with export offers resetting higher ahead of April.
The Indian market has already begun to reflect these upstream developments, particularly in Polyether polyols. Since January, following the announcement of China’s VAT rebate cancellation, Indian prices have trended higher. Flexible slabstock polyol prices have risen from around USD 1,245/tonne CIF (drums) in early January to approximately USD 1,330/tonne CIF in late February, marking a notable month-on-month increase. This uptick reflects a combination of seasonal firmness and early policy-driven cost pass-through, even though the policy itself is still a month away from implementation. Market participants report heightened buyer focus on April and post-April offers, with customers increasingly seeking supply visibility ahead of anticipated cost escalation.
For isocyanates, India’s reliance on imports from global majors implies that ongoing international repricing will eventually transmit into the domestic market. While near-term activity remains subdued due to the approaching Holi festival, replacement cost pressures are clearly building. If global firmness persists and suppliers maintain discipline, Indian MDI and TDI benchmarks are likely to see upward adjustments once festival-related disruptions ease.
India’s PU feedstock market is entering a cost-supportive phase. Rising global energy, logistics, and regulatory costs, supplier-led repricing, tightening supply discipline, and China’s VAT policy shift are aligning to push replacement costs higher. While near-term demand remains seasonally muted, improving downstream visibility, supported by India’s export momentum and resilient domestic consumption, suggests limited downside risk. At the same time, India’s improving macro and trade backdrop, supported by recent FTAs, export momentum in PU-intensive downstream sectors, and resilient domestic consumption, suggests that demand recovery will coincide with rising input costs. In the near-term horizon, Indian buyers should prepare for firmer pricing across polyether polyols and isocyanates as global and regional cost pressures increasingly feed through to the domestic market.
