North American MDI Prices Surge as BASF, Covestro and Huntsman Stack Hikes Through Mid-2026

The North American market for diphenylmethane diisocyanate (MDI), the core feedstock for polyurethane foams, has moved from a gradual recovery into a steep climb. What began as a coordinated round of price notices in mid-February 2026 has hardened into a sustained supply squeeze that, as of early June, shows no sign of easing.

The sequence started on February 17, when Huntsman raised U.S. MDI prices by roughly 260 dollars per ton, followed by BASF lifting Lupranate grades across ASEAN on February 25 and Covestro adding 220 dollars per ton in North America from March 1. Those early increases were modest compared with what followed. Through March, April and May the three largest Western producers issued repeated notices, and by late May the combined effect pushed all MDI categories in North America up by 0.22 to 0.35 dollars per pound in a single wave.

Huntsman moved first in this latest round. On May 22 it announced an immediate 0.24 dollar per pound increase on all MDI products across North and South America. The company also began a three to four week maintenance turnaround at its Geismar, Louisiana site, the largest MDI plant in the Americas with capacity near 500,000 tons per year. Production lines ran at reduced rates during the work, stretching delivery times for customers already short on material.

Covestro added pressure of a different kind. On May 19 it declared force majeure on all North American MDI grades after a breakdown in an upstream carbon monoxide unit feeding its phosgene chain. The company has not given a firm restart date, and it has locked in a 0.22 dollar per pound increase effective July 1. With the resumption timeline still open, buyers cannot count on Covestro volumes returning quickly.

BASF posted the largest single jump. On May 29 it raised Lupranate MDI grades by 0.35 dollars per pound, the steepest of the three. BASF is also preparing a 45 day major turnaround in July while finishing commissioning work on a new 200,000 ton per year line at Geismar. That expansion is expected to ease the regional balance later in 2026, but in the near term the overlapping shutdowns remove supply rather than add it. Several traders expect BASF to issue further increases before the third quarter peak.

Three producers raising prices within eight days, combined with turnarounds and unplanned outages across multiple regions, has driven spot quotes for both polymeric and monomeric MDI sharply higher. Insulation foam and construction material makers downstream now face procurement costs well above where they sat at the start of the year.

Two structural problems are reinforcing the climb. First, a shortage of polyol feedstock has left polyurethane systems short on the second component, so users cannot simply swap MDI grades or substitute material. That keeps buying demand rigid even at higher prices. Second, the spray foam sector locked in volumes and built inventory early in anticipation of further increases, pulling forward demand from later months and tightening near-term availability further.

The pricing model itself is shifting. Western producers are moving away from fixed monthly adjustments toward a more flexible two-week negotiation cycle, which has sharply increased how often spot prices move. Several forecasters expect upward pressure to run from June into the third quarter high season.

The regional picture differs in China, where Wanhua Chemical anchors supply with capacity above 4 million tons per year and a global share approaching 40 percent. Domestic Chinese quotes have stayed in a narrow band through early June, with polymeric MDI benchmarks near 16,700 yuan per ton and Wanhua ex-factory prices holding steady. New revamp capacity in Fujian, roughly 700,000 tons per year, is coming online through the second quarter and helps offset import cost pressure. As a net exporter, China has so far avoided the spot spikes seen in North America.

A broader backdrop is feeding the rally. Since late February 2026, disruption to the Strait of Hormuz and the Red Sea has lifted European natural gas prices and complicated shipping for chemical cargoes. Natural gas is a primary energy input for MDI production, setting a cost floor that producers are passing through. The combination of energy inflation, freight uncertainty and tight plant operating rates has turned a routine seasonal firming into a sustained cost crisis for the polyurethane chain.

For now the North American situation remains active. The key variables to watch are the timing of Covestro's force majeure resolution, the completion of the Huntsman and BASF Geismar turnarounds, and whether the new BASF capacity ramps in time to relieve the third quarter peak.