Due to Supply Chain Disruptions, A Major MDI/TDI Facility in the Middle East has Suddenly Shut Down!

On March 31, 2026, Sadara Chemical Company—a joint venture between Saudi Aramco and Dow Chemical—announced the complete suspension of operations at its large integrated petrochemical complex in Jubail, Saudi Arabia. The timeline for resumption remains uncertain.

Sadara is one of the largest chemical complexes in the Middle East, with a total investment of approximately USD 20 billion. It operates 26 world-scale production units, with a combined annual capacity exceeding 3 million tons. In the MDI/TDI sector, it is the most important supplier in the region, holding over 90% of the regional market share. Its annual MDI capacity is about 400,000 tons, and TDI capacity about 200,000 tons, accounting for roughly 3% and 6% of global supply, respectively.

According to the official statement, the immediate cause of the shutdown is supply chain disruption triggered by geopolitical conflicts in the Middle East. Key raw materials and spare parts are unavailable, export channels are blocked, inventories are continuously building up, and energy and logistics costs have fluctuated sharply. The company stated that the restart timeline depends on multiple factors and cannot yet be determined.

Sadara has made it clear that this shutdown will significantly impact its full-year 2026 performance. The company had already been under operational pressure. Due to weak demand, declining product prices, and periodic operational disruptions, the market generally expects its losses to widen further in 2025.

The MDI and TDI industries are highly concentrated, dominated by a few major players such as Wanhua Chemical, BASF, Covestro, and Huntsman. With long construction cycles for new capacity, the industry has remained in a tight supply-demand balance. The shutdown of Sadara alone is enough to have a direct impact on market prices.

MDI and TDI are widely used in refrigerators and freezers, automotive interiors, building insulation, and upholstered furniture, and there are few substitutes in the short term. Although other major producers have some flexibility to adjust output, it is difficult to fully compensate for Sadara’s supply gap, especially in certain regional markets and high-end product segments.

Following the announcement, Huntsman promptly declared price increases for polyurethane and related products in the Chinese market. As of April 2, the reference price for polymeric MDI in China is approximately RMB 19,533.33 per ton, showing a notable increase compared to previous levels. However, this round of price increases is also an extension of the earlier upward trend.