Creating New Historic Highs! Wanhua Chemical Expands Layout Again!

(Source: Shipping Brokerage)

■ Information Source | Chemical New Materials

On March 16, Wanhua Chemical announced its earnings forecast, projecting revenue of 203.235 billion yuan in 2025, an 11.62% increase year-over-year, surpassing 200 billion yuan for the first time; net profit attributable to shareholders was 12.527 billion yuan, down 3.88% year-over-year.

During the reporting period, multiple new production units of Wanhua Chemical were successfully put into operation. The main reason for the decline in net profit was the overall downward trend in chemical product prices in 2025, influenced by the industry environment.

Battery Materials

Wanhua Chemical is advancing the construction of several 100,000-ton-level lithium iron phosphate projects in Shandong, Sichuan, Hubei, and other regions. Reports indicate that by 2027, Wanhua Chemical is expected to achieve a production capacity of 1 million tons of lithium iron phosphate and 1 million tons of lithium iron phosphate batteries.

On March 6, Wanhua Chemical and Xingfa Group jointly invested to establish Hubei Huaxing New Energy Co., Ltd., with a registered capital of 600 million yuan. Wanhua Chemical holds 70%, and Xingfa Group holds 30%. The joint venture is based in Yichang, Yidu, Hubei, covering battery manufacturing, new energy technology R&D, recycling of used batteries, and energy storage technology services.

Following this, on March 11, the environmental impact assessment for Hubei Huaxing New Energy Co., Ltd.'s annual production of 240,000 tons of iron-based phosphate and supporting facilities was publicly announced. The project is located in Yidu Chemical Park, Hubei Province, mainly involving new production workshops, three-dimensional warehouses, tank areas, and auxiliary facilities such as fire water stations, rainwater pools, and accident water pools. Once completed, the project will have an annual production capacity of 240,000 tons of iron phosphate.

This cooperation represents a deep complementarity of resources between the two parties. Xingfa Group, as a leading enterprise in China’s phosphorus chemical industry, controls high-quality phosphate ore reserves of 156 million tons and has an annual capacity of 600,000 tons of organosilicon. Its phosphate resources are a core raw material for lithium iron phosphate cathode materials.

It is noteworthy that this is not their first collaboration. Previously, Wanhua Chemical and Xingfa Group jointly established companies such as Yantai Huaxing Silicon Materials Co., Ltd., Hubei Xinghua Silicon Materials Co., Ltd., Yuan’an Xinghua Phosphorus Chemical Co., Ltd., Yuan’an Xinghua Mining Co., Ltd., and Yantai Huaxing Phosphorus Chemical Co., Ltd. These collaborations aim to establish a complete supply chain from phosphate mining to lithium carbonate and cathode materials, ensuring raw material independence. Among them, Yuan’an Xinghua Mining Co., Ltd. obtained exploration rights for the Yangliu East phosphate mine in Yuan’an County in 2024, with estimated resources of about 156 million tons. This focus on the new energy battery industry further deepens the partnership.

In addition to the cooperation with Xingfa Group, there is also a joint venture with Tonghua Group to establish Tongling Wanquan Mining Co., Ltd., focusing on upstream mineral resources.

Meanwhile, Wanhua Chemical Group (Laizhou) New Energy Co., Ltd. was established on March 11, with Zou Jie as legal representative and registered capital of 600 million yuan. Its business scope includes power generation, transmission, distribution, renewable energy technology services such as wind and solar power, battery leasing, and photovoltaic equipment leasing. The company is wholly owned by Wanhua Chemical (Yantai) Battery Industry Co., Ltd., a subsidiary of Wanhua Chemical (600309).

In December 2025, Wanhua Chemical signed an investment agreement with Laizhou City government for the “Wanhua Laizhou Green Power Industrial Park” project. Subsequently, the annual 650,000-ton lithium iron phosphate project in Laizhou, Shandong, entered the environmental assessment public notice stage.

On the morning of March 17, Wanhua Chemical Chairman Liao Zengtai stated at the Laizhou Clean Energy Industry Chain Investment Promotion Conference that they aim to leverage the 650,000-ton lithium iron phosphate project as a link, utilizing their industry, technology, and resource advantages to strengthen industry chain coordination, technological innovation, and market expansion, creating a highly integrated and well-supported clean energy industry cluster.

Overall, the establishment of these two new energy companies by Wanhua Chemical signifies a further deepening of its strategic layout in the new energy sector. The company is consolidating its foundation through steady performance growth while actively partnering with industry giants and securing core resources, striving to achieve mutual empowerment and value enhancement in both its chemical main business and new energy sectors.

Continuing to Build the Second Growth Curve

It is worth noting that in 2024, Wanhua Chemical completed project investments of 40.15 billion yuan, with major projects planned to invest 25.24 billion yuan in 2025. Key focuses include expanding MDI capacity and supporting projects, with an annual investment plan of 6.49 billion yuan; improving the petrochemical industry chain, including a 1 million ton/year ethylene raw material diversification upgrade and ethylene phase II project, with a planned investment of 7.67 billion yuan; accelerating industrialization of self-developed green functional additives, vanillin, nutritional products, and other innovative chemical products, with a planned investment of 4.64 billion yuan; and continuously developing the second growth curve by accelerating projects for lithium iron phosphate, PVDF, and other battery materials, with a planned investment of 2.16 billion yuan. The specific project investment plans are as follows:

In 2025, investments will mainly focus on battery materials, new materials business development, and internationalization strategies, leveraging the integrated industrial chain advantages of the park and collaborating with upstream and downstream partners.

TDI and MDI

In August 2025, the second-phase TDI plant (36,000 tons/year) at Wanhua Chemical Fujian Industrial Park was completed and began production, delivering qualified products. Wanhua Chemical’s TDI capacity is expected to reach 1.47 million tons/year.

Currently, global MDI capacity is highly concentrated, with Wanhua Chemical leading worldwide with a capacity of 3.8 million tons/year. Wanhua is accelerating the construction of the Fujian MDI technical upgrade project, expected to start production in the second quarter of 2026, bringing total MDI capacity to 4.5 million tons/year.

Recently, due to the Middle East situation, many analysts are optimistic about Wanhua Chemical. Wanhua’s “coal chemical-MDI” integrated industry chain offers significant cost advantages compared to competitors using natural gas routes domestically and internationally. The production cost of MDI via coal chemical routes in China is between 9,500 and 10,500 yuan/ton, about 1,000–1,500 yuan/ton lower than natural gas routes.

In terms of pricing, as of March 16, the East China bulk MDI price was quoted at 16,800–17,000 yuan/ton, up 2,800 yuan/ton from February 27 (before the escalation of US-Iran tensions), a total increase of 20%.

Additionally, on March 16, news reported that Jinhu Mitsui Chemicals suspended MDI supply due to conflicts, causing Indian MDI prices to rise by $350/ton to $2,450/ton.