India's Sole TDI Plant has Shut Down Again, but China's TDI export Dividend is Expected to Continue

It is reported that on September 19, 2025, India's Gujarat Narmada Valley Fertilizer and Chemicals Limited (GNFC) announced that its 50000 tons/year toluene diisocyanate (TDI) Phase II plant in Dah was safely shut down due to a sudden gas leak. The company emphasized in its statement that the accident was controlled within the factory area and did not cause any casualties or property damage.

GNFC is the only large TDI manufacturer in India, with two TDI production facilities totaling 67000 tons per year. The TDI Phase I facility has a production capacity of 17000 tons per year, while the TDI Phase II facility has a production capacity of 50000 tons per year. The gas leak occurred in the TDI Phase II unit.

As the only large TDI manufacturer in India, especially the TDI Phase II unit, there have been frequent problems, including technical failures, gas leaks.

The TDI unit of GNFC, especially the large-scale Phase II unit involved in this incident, has experienced multiple technical failures, gas leaks, and even more serious safety accidents in history. As a company that adopts DuPont technology from the United States and is controlled by local governments in India, GNFC was originally a strategic pillar for India to achieve import substitution of key chemicals. But the long-term instability of its device operation still requires imported TDI from overseas as a supplement.

Despite the fragility of domestic supply, India has repeatedly targeted China, Japan, South Korea, the European Union, Saudi Arabia, and the United Arab Emirates since 2016

Wait for countries and regions to initiate anti-dumping investigations into imported TDI. The shutdown of GNFC will undoubtedly cause a shortage of TDI supply in India.

The supply-demand imbalance in the global TDI market is rapidly worsening

The discontinuation of GNFC is not an isolated event. Since the third quarter of 2025, the global TDI market has been affected by a series of unexpected and planned supply disruptions.

In July, global chemical giant Covestro's 300000 tons/year TDI plant in Europe encountered force majeure; During the same period, there were disruptions in BASF's facilities in South Korea, and the production capacity of Japanese companies such as Mitsui has not yet fully recovered from early shutdowns. This series of events has led to a significant contraction in overseas supply. Wanhua Chemical's 250000 ton/year plant in Hungary has entered a 30 day maintenance period, further reducing its supply capacity to the European market. At the same time, major Chinese manufacturers have also entered the maintenance season. The abnormality of Wanhua Chemical's domestic equipment has led to extreme shortage of spot supply and delayed shipment; Covestro and Shanghai BASF have also stated that their supply will be very limited in September and have significantly increased their product guidance prices.

On the demand side, exports have become the strongest growth engine. According to Chinese customs data, from January to August 2025, the total export volume of TDI in China reached 357000 tons, a year-on-year increase of 67.78%. Among them, 18400 tons were exported to India, accounting for 5.2%, ranking fourth among export countries. The force majeure in Europe, slow recovery of Japanese facilities, and subsequent maintenance plans for American facilities have collectively created a huge overseas demand gap.

China's TDI export dividend is expected to continue

The unexpected shutdown of GNFC undoubtedly exacerbates the already severe overseas supply situation in the fourth quarter, and is expected to lead to severe shortages in the international market, thereby providing strong support for global TDI prices. Domestic production enterprises therefore have a broader export arbitrage window, but it may exacerbate the tight supply of goods in the domestic market, providing strong support for domestic TDI prices.