Three-Phase Plan for 120,000 Tons! “TPU King” Zhuhai Makes Its Move—Covestro’s New Plant Signals Not Just Capacity Expansion but a Full-Scale Upgrade in the Asia-Pacific Market Battle

On January 22, 2026, German chemical giant Covestro held the commissioning ceremony for its brand-new thermoplastic polyurethane (TPU) production facility in Zhuhai, Guangdong, China. The first phase, with an annual capacity of 30,000 tons, is only the first step of a grand blueprint. According to the plan, this 45,000-square-meter site will be built in three phases, ultimately reaching an annual capacity of 120,000 tons by the 2030s, making it Covestro’s largest TPU production facility worldwide. This move comes amid deep adjustments in the TPU market and increasingly fierce competition, serving as a strategic statement by Covestro to its rivals in the Asia-Pacific market and beyond.

Market Chill and Emerging Demand: Structural Shifts in the TPU Industry

The TPU market is currently experiencing a trial of “ice and fire.” On one hand, the industry faces downward price pressure. Market data shows that China's domestic TPU prices have fallen significantly from their 2022 peak, with the average price in Shandong dropping about 12% in 2025 compared to 2024, reflecting a relaxed supply-demand balance in the low- and mid-end segments.

On the other hand, market demand is undergoing profound structural differentiation. Traditional applications such as footwear and tubing are slowing in growth, while emerging industries—new energy vehicles, consumer electronics, and high-end medical applications—are becoming new growth drivers.

In the new energy vehicle sector, TPU is widely used in battery pack components, lightweight wiring, and interior parts due to its excellent flexibility, wear resistance, and environmental performance. In consumer electronics, the demand for more durable, high-quality, and design-flexible casing materials is strong, making TPU the material of choice for phone cases and wearable devices.

Particularly noteworthy is the rise of frontier sectors such as low-altitude economy (e.g., drones, flying cars) and AI hardware, which are driving demand for high-performance materials. Covestro’s Chief Commercial Officer, Baimu Ni, emphasized that these fast-growing industries require higher standards in material performance, delivery speed, and sustainability. The market is shifting from a general pursuit of “volume” to a demand for “quality,” emphasizing high performance, high purity, and low carbon footprint.

Deep Integration and Agile Response: Covestro’s “Greater Bay Area Integration” Strategy

Covestro’s Zhuhai layout is not just about impressive capacity numbers—it’s a sophisticated regional loop integrating production, R&D, and market application. Production is anchored by the planned 120,000-ton Zhuhai facility; R&D and innovation leverage the TPU Asia-Pacific R&D center in Changhua, Taiwan, and the 2024 TPU Application Development Center in Guangzhou. The Guangzhou center focuses on rapid development of downstream applications in consumer electronics and specialty films.

This “Zhuhai production—Guangzhou development—Changhua R&D” triangle allows Covestro to seamlessly link basic research, process scale-up, and specific customer needs. The goal is to achieve agile innovation “in China, for China, and for the world,” significantly shortening the time from lab to market and creating a speed-based competitive moat that rivals will find difficult to match.

Sustainability as a Trump Card: Leveraging “Green Materials” for Future Competitiveness

Amid the global sustainability wave, Covestro’s Zhuhai facility plays a key “green card.” The plant can produce TPU products labeled with “CQ” (Circular Intelligence), using at least 25% non-fossil raw materials such as bio-based or recycled feedstocks, employing a quality-balanced approach.

For downstream clients aiming to reduce product carbon footprints, especially leading brands in consumer electronics and automotive sectors, this is highly attractive. This “green card” aligns with China’s dual-carbon goals while helping Covestro build a differentiated competitive barrier in high-end markets, turning environmental pressure into a market advantage.

Giant Face-Off and Local Rise: Multi-Dimensional TPU Market Competition

Covestro’s aggressive push is clarifying the competitive landscape in the Asia-Pacific TPU market, forming a multi-dimensional battleground of “foreign giant face-offs” and “local enterprise ascension.”

Covestro’s long-time rival BASF had already taken the lead by commissioning a 120,000-ton TPU line at its Zhanjiang integrated site in 2024, also the company’s largest TPU line worldwide. Both German giants have essentially staked their largest global capacities in Guangdong, signaling that China and the Asia-Pacific region have become decisive grounds in their global strategy. A “foreign enterprise battle” for technology, customers, and supply chains has intensified.

At the same time, Chinese firms like Wanhua Chemical and Meiru New Materials are rapidly rising. China’s total TPU capacity has surpassed 1.5 million tons, with increasing industry concentration. Domestic companies aim to establish cost advantages in mid- and low-end markets through large-scale capacity and integrated industrial chains while continuously pushing into high-end applications such as medical and automotive. 

A New Rulebook Emerges

The commissioning of Covestro’s Zhuhai plant is a mirror reflecting the global chemical industry’s shift toward Asia-Pacific and China. It indicates that future competition in TPU—and polymers more broadly—will not just be about market share but also about the Greater Bay Area’s role as a global hub for manufacturing and innovation. The planned 120,000-ton “giant” in Zhuhai is Covestro’s bold stake in this high-stakes game.