(Yicai) July 30 -- Shares in Wanhua Chemical Group climbed today after the world’s largest supplier of toluene diisocyanate said that one of its main factories has completed routine maintenance and will soon be back in production, signalling an end to recent global supply disruptions of the key chemical used to make polyurethane products like foams and coatings following a string of accidents at rival facilities.

Wanhua’s share price [SHA:600309] closed up 3 percent at CNY63.84 (USD8.90). Earlier in the day it surged 4.8 percent to CNY64.95. The stock has gained 18 percent in value since July 17.

The factory, which has an annual capacity of 360,000 tons, should soon be back online, Yantai-based Wanhua said yesterday.

The restart will be just in time to plug a growing gap in the global supply chain after Mitsui Chemicals, Japan’s only TDI producer, was forced to shut down operations at its Omuta plant in Fukuoka prefecture on July 27 due to a chlorine gas leak. This factory, which had just finished routine maintenance, is Mitsui’s only TDI production site and it recently reduced its TDI output to 50,000 tons a year from 120,000 tons.

Before Tosoh Corp. exited the TDI business in 2023, Japan was already highly dependent on imports from China and South Korea but after Tokyo-based Mitsui’s accident, the country may now be forced to rely entirely on imports.

It follows an earlier incident on July 16, when German chemical giant Covestro announced that its main TDI plant in Dormagen had declared force majeure after a fire caused failures in the power supply and control systems, halting production. The Dormagen plant has an annual TDI capacity of 300,000 tons.

That shutdown triggered a surge in the global TDI market, pushing up prices for several consecutive days. TDI prices hit CNY15,333 (USD2,136) per ton yesterday, a jump of 34.5 percent from a month earlier, according to data from 100PPI, an online provider of bulk commodity information.

In recent years, major overseas producers of TDI have cut or even suspended production, leading to TDI production being concentrated in Asia and boosting China’s TDI exports. In May, China exported 51,600 tons of TDI, almost double the amount a year ago, and hitting a new monthly high. In June, exports soared 81.6 percent year on year to 48,000 tons.

Wanhua had a production capacity of 1.1 million tons of TDI a year as of the end of 2024, the firm said in its latest annual report.

Editor: Kim Taylor