Not Just MDI! Huntsman and BASF Impose “War Surcharge” Across Europe

Huntsman’s Building Solutions business has announced that, effective March 20, 2026, it will impose a natural gas surcharge of €200 per metric ton on all products in the European region. Huntsman stated that the recent sharp deterioration in Middle Eastern geopolitical conditions has significantly driven up European natural gas prices, directly increasing the production costs of MDI and polyols. Despite actively implementing internal measures to mitigate the pressure, the company is unable to fully absorb the cost increases and therefore has decided to apply a €200 per metric ton natural gas surcharge on all products in Europe.

Meanwhile, BASF announced that, effective March 18, it will implement substantial price increases—up to 30%—for household care, industrial cleaning, and industrial formulation products in the European region; this price hike is directly attributable to soaring energy and raw material costs caused by disrupted shipping through the Strait of Hormuz.

Not just MDI surcharge coverage expansion

On March 5, 2026, Huntsman announced that due to the sharp deterioration of the geopolitical situation in the Middle East, leading to a significant increase in European natural gas prices, the production cost of MDI has risen substantially. Therefore, it has decided to charge a natural gas surcharge of 200 euros per ton on all MDI products sold to the Europe, Africa, Middle East, and India regions (EMEI). At that time, the price adjustment was limited to polyurethane core products, targeting high-energy consumption items. This surcharge, however, applies to all products in the European region.

Huntsman's business presence in Europe is extensive, mainly including the Polyurethane Division, such as MDI, TPU (thermoplastic polyurethane) and other products; the Advanced Materials Division, such as epoxy adhesives; and the Building Solutions Division, such as spray polyurethane foam insulation materials (e.g., FOAM-LOK, Heatlok series) and roof coatings. Many product lines use natural gas as the core energy and raw material, and the cost control of a single product category is no longer sufficient to cover the overall price increases across the entire supply chain. This means that Huntsman is expanding the scope of additional charges from a single MDI product to a broader range of product lines.

Geopolitical conflicts expose Europe’s energy vulnerability

The European chemical industry has long been highly dependent on natural gas, which serves as both the core energy for production facilities and a key raw material for certain chemical products. Fluctuations in its price directly determine the bottom line of enterprise production costs. This time, the sharp deterioration of the geopolitical situation in the Middle East has directly impacted the global energy supply chain, causing a significant rise in European natural gas prices. The sudden surge in energy import costs has further worsened the situation for European chemical companies, which have yet to fully recover from the previous energy crisis.

As the surcharge’s effective date approaches, the cost-pass-through effect across Europe’s chemical industry chain is about to materialize. Huntsman’s products are widely used in building insulation, adhesives, polyurethane materials, and industrial coatings, serving downstream sectors including construction, automotive manufacturing, home appliance production, and packaging materials. The full implementation of the €200-per-ton surcharge will directly increase raw material procurement costs for downstream enterprises, further squeezing profit margins in end-manufacturing segments. Particularly in sectors such as construction and home appliances—already grappling with weak demand—the cost increase may further dampen market vitality and intensify overall pressure on European manufacturing.

Huntsman explicitly stated that, given the high degree of uncertainty surrounding the situation in the Middle East, the surcharge level will be dynamically adjusted according to market conditions. More concerning is whether additional European chemical companies will follow Huntsman's lead. On March 5, 2026, Dow announced a price increase of €200 per ton for MDI products in Europe and $300 per ton for India, the Middle East, and Africa. In its notice, Dow frankly attributed the price adjustment directly to the "significant increases" in energy, raw material, and logistics costs caused by the turmoil in the Middle East.

Chain reaction manifests

This wave of price increases has spread from MDI to a broader range of chemical sectors.Buy HuasuThe Institute understands that since February 2026, major global suppliers including BYK, BASF, Huntsman, Dow, Kemira, Songwon, and Lubrizol have successively issued price adjustment notices, with increases reaching as high as 25%. BASF even announced two price hikes within a single week, resulting in a cumulative increase of up to 45%. This wave of price increases is spreading more widely, and the frequent price adjustments by industry giants like BYK and BASF mean that virtually all downstream chemical sectors—including coatings, plastics, rubber, and adhesives—will face significant cost pressures. When international giants announce price hikes, companies that rely on a single imported source for their supply chain are placed in an extremely vulnerable position.

In contrast, the domestic market saw Hongqiang Chemical raise the selling prices of its polyether monomers, non-ionic surfactants, and hydroxy ester products by 50%-80%, becoming one of the companies with the largest price increases in this round. Similarly, companies such as Nippon Paint, Sika, and Dongfang Yuhong followed suit, with coatings prices increasing by 5%-10%, while waterproof coatings, asphalt-based rolls, and grout sealants saw price hikes of 5%-20%.