Wanhua Chemical Expands TPU Production by 200,000 Tons with RMB 287 Million Investment

On August 10, Wanhua Chemical publicly disclosed the Environmental Impact Report (Draft for Public Comment) for its annual 200,000-ton thermoplastic polyurethane (TPU) expansion project. The project is located in the Yantai Chemical Industrial Park, Shandong Province, with a total investment of RMB 287 million, including RMB 2.023 million for environmental protection measures.

I. Project Overview

The project consists of two main components: TPU production units and polyester polyol production units.

TPU Unit: Addition of 4 continuous production lines and 1 batch production line, each with a designed capacity of 40,000 tons/year, adding a total of 200,000 tons/year of TPU capacity.

Polyester Polyol Unit: Construction of 1 new polyol reactor production line, along with 10 new polyol intermediate tanks and 3 finished product packaging tanks. Through optimized production scheduling and material feeding processes, the project will tap into existing facility potential to achieve an additional 50,000 tons/year of polyester polyol capacity.

II. Existing Capacity at Yantai Base

The Yantai Chemical Industrial Park serves as Wanhua Chemical's core production base for TPU and polyols.

Wanhua Chemical's Yantai TPU facilities were developed in three phases, all of which have obtained environmental approval:

• Phase I: 60,000 tons/year polyol unit + 60,000 tons/year TPU unit
• Phase II: 25,000 tons/year polyol unit + 30,000 tons/year TPU unit
• Phase III: 90,000 tons/year polyol unit + 120,000 tons/year TPU unit

In 2022, the company completed a 25,000-ton/year specialty isocyanate-based high-end TPU technical modification project, adjusting raw material formulations for certain production lines. In 2024, the Phase II expansion of the 120,000-ton/year TPU project was modified to include TDI, HDI, and other high-end TPU products in the product portfolio.

III. Capacity Changes After Expansion

Upon completion of this expansion, Wanhua Chemical's Yantai base TPU capacity will increase from 210,000 tons/year to 410,000 tons/year, nearly doubling its capacity. The accompanying increase in polyester polyol production will enable self-sufficiency across the upstream and downstream supply chain.

IV. TPU Products and Downstream Applications

TPU (Thermoplastic Polyurethane) is a linear block copolymer composed of low-molecular-weight polyol soft segments and diisocyanate-chain extender hard segments.

Key Properties: Excellent mechanical performance, versatile processing methods, and recyclability.

V. Industry Competitive Landscape

Major global TPU players include Wanhua Chemical, BASF, Covestro, Lubrizol, Huntsman, and Trinseo. Key domestic competitors include Huafon Chemical, Meirui New Materials, and Yinuowei. The current Chinese TPU market is dominated by Wanhua Chemical and Huafon Group.

VI. Expansion Timing: Polyurethane Industry Price Adjustment Cycle

This expansion coincides with a polyurethane industry price adjustment cycle.

Since late July 2026, driven by rising raw material costs due to Middle Eastern geopolitical conflicts and concentrated maintenance shutdowns of multiple MDI/TDI facilities worldwide, the global polyurethane raw material market has seen a wave of price increases:

Rising upstream raw material costs have already transmitted downstream. Meirui New Materials announced a RMB 1,000/ton price increase for all TPU grades, effective August 1.

Against this backdrop, Wanhua Chemical's TPU capacity expansion will further strengthen its supply capability in the TPU sector.