Wanhua Chemical released its Q3 report on October 26, with Q3 profit up 84%. On October 23, the second phase of the Laizhou lithium iron phosphate project commenced construction. On one side, polyurethane is still contributing profit; on the other, the second main business has already broken ground. Wanhua is not waiting for polyurethane.
Polyurethane Profit Remains, but Elasticity Narrows
In Q3 2026, Wanhua's revenue was 66.551 billion yuan, up 24.80% year-on-year; net profit attributable to shareholders was 5.595 billion yuan, up 84.38% year-on-year; net profit after deducting non-recurring gains and losses was 5.646 billion yuan, up 97.67% year-on-year. The company's explanation for the growth was "product price increases and higher gross profit."
The Q3 gross profit by segment was not separately disclosed in the quarterly report, but based on the price direction of products and raw materials, it can be judged that polyurethane remains the absolute main body of profit. The average price of pure MDI in Q3 was about 21,200 yuan/ton, polymeric MDI about 17,000 yuan/ton, TDI about 16,800 yuan/ton, and flexible polyether about 10,000 yuan/ton. Polyurethane series prices overall showed a "volatile upward" trend. During the same period, the petrochemical series and the fine chemicals and new materials segment did not show any single-quarter variable capable of changing the profit structure, and polyurethane remained Wanhua's largest profit pool.
However, the price spread direction of polyurethane in Q3 was narrowing. On the raw material side, the average price of pure benzene was 8,358 yuan/ton, up 41.54% year-on-year; the average price of naphtha MOPJ was 832 US dollars/ton, up 41.37% year-on-year; thermal coal was 791 yuan/ton, up 32.50% year-on-year. Raw material increases exceeded product price increases. The company's overall gross margin was 15.40%, up 2.64 percentage points year-on-year, but down 3.63 percentage points quarter-on-quarter. The year-on-year high growth relied on the low base in the same period last year, while the quarter-on-quarter decline indicates that the profitability of polyurethane in Q3 is moving downward.
While Polyurethane Can Still Make Money, the Second Main Business Is Already Accelerating
On October 23, the second phase of Wanhua's Laizhou Green Power Industrial Park project commenced construction. The park is planned for 650,000 tons/year of battery-grade lithium iron phosphate (LFP). Phase I, with 320,000 tons/year, commenced construction in March 2026 and is currently in the sprint stage toward commissioning, expected to be completed and put into operation by the end of the year. The start of Phase II means the Laizhou base has entered a parallel stage of Phase I sprint and Phase II co-construction.
While polyurethane still contributes the main profit and the company's Q3 performance achieved high year-on-year growth, Wanhua has shifted the focus of incremental capital expenditure to battery materials. In 2026, Wanhua plans capital expenditure of 27.3 billion yuan, of which the emerging materials segment accounts for 11.05 billion yuan, exceeding the polyurethane main business for the first time. External equity investment is separately counted at 2.22 billion yuan, mainly around battery material layout. Battery materials were officially established as the second main business in July 2026, on par with polyurethane.
Beyond Laizhou LFP, sodium battery positioning is also being advanced simultaneously. On October 20, the environmental impact assessment for the 2,000 tons/year sodium battery anode demonstration project was accepted, and the NFPP cathode unit has entered the implementation rhythm, sharing the same phosphate rock and iron phosphate upstream with LFP.
Capital Allocation Gives the Ranking
There is no suspense in Wanhua's Q3 profit structure: polyurethane is the growth point and will not be replaced in the short term. But Wanhua's capital allocation is already clear: polyurethane is responsible for current-period profit, and battery materials are responsible for the asset structure of the next stage. The start of Phase II of Laizhou's 650,000-ton LFP project occurred when polyurethane profit was still at its best, not after it had declined.
