China Chemical Market 2025: Prices, Capacity & Profits

China's chemical market in 2025 entered the final stage of its capacity expansion cycle, with oversupply expectations dominating fundamentals and price performance diverging sharply across sectors. While fertilizers outperformed, most chemical products hit multi-year lows amid intensifying competition and weakening margins.

Market Overview: Expansion Cycle Winds Down, Competition Intensifies

In 2025, China's chemical industry approached the end of its large-scale capacity expansion cycle. Despite persistent oversupply expectations, weak spot fundamentals remained difficult to reverse. During the first three quarters, the market continued to decline, with multiple chemical products falling to their lowest levels in nearly four years. The influence of international crude oil price fluctuations on costs became increasingly secondary.

From a pricing perspective, only 12.70% of monitored chemical products recorded year-on-year gains in 2025. Apart from fertilizers and rubber, most sectors underperformed. On the profitability side, around 60% of products remained profitable, yet nearly half saw profit margins decline compared with 2024, reflecting mounting operational pressure and fiercer competition.

In terms of capacity, refinery and petrochemical expansion is nearing completion, with growth rates slowing annually. However, market competition has intensified as the industry transitions from incremental expansion to stock-based competition. The strategic focus is shifting from capacity growth to industrial chain integration and cost-efficiency optimization.

Chemical Price Performance: 2025 Sees Broad Declines

Among 126 monitored chemical products:

• 2025: 16 products rose (12.70%); 110 declined (87.30%)

• 2024: 61 rose (48.41%); 65 declined (51.59%)

• 2023: 5 rose (3.97%); 121 declined (96.03%)

After elevated prices in 2022 due to upstream raw material pressures, 2023 saw significant volatility as post-pandemic adjustments led to widespread declines. In 2024, roughly half of the products posted higher average prices year-on-year. However, in the first three quarters of 2025, the market continued to bottom out, with many products hitting four-year lows before a macro-driven rebound emerged in mid-November.

Notably, fertilizers dominated the top gainers list in 2025, accounting for five of the top ten products by price increase. In contrast, rubber  —  which held eight spots in the 2024 top ten — secured only two positions in 2025. EVA in plastics re-entered the top ten gainers.

Sector Highlights

Ethylene Oxide Chain: AEO-9 Surges

In the ethylene oxide sector, non-ionic surfactant AEO-9 rose 22.51% year-on-year in 2025, with its average price increasing by RMB 2,360/ton compared with 2024. Although ethylene oxide prices traded below previous years' ranges, surging palm kernel oil prices lifted fatty alcohol costs, providing strong cost support for surfactants and pushing domestic non-ionic surfactant prices significantly higher.

Fertilizers: Supply Tightness and Structural Demand Growth

Five fertilizer products ranked among the top gainers, including sulfur (solid), potassium chloride (62% crystal), potassium sulfate (50% powder), sulfuric acid (98%), and monoammonium phosphate (55% powder).

1. Sulfur prices in East China surged 126.22% year-on-year, driven by global supply tightening, structural demand growth in phosphate fertilizers, new energy batteries, and nickel smelting, as well as geopolitical disruptions in the Middle East and Central Asia.

2. Potassium chloride prices rose sharply due to global production cuts, declining domestic ore quality, delayed import contracts, and persistently low port inventories. The July peak reached RMB 3,500–3,550/ton, roughly RMB 1,000 above January lows.

3. Potassium sulfate gained on rising raw material costs (KCl and sulfuric acid), low operating rates (41%–45%) among Mannheim producers, and stricter environmental regulations. July highs reached RMB 4,000–4,100/ton.

4. Sulfuric acid (98%) climbed significantly on surging sulfur costs, supply contraction from plant maintenance, strong fertilizer and battery demand, and currency-linked import cost pressures.

5. Monoammonium phosphate (55% powder) rose due to elevated sulfur and phosphate rock prices, low capacity utilization, environmental constraints, and seasonal agricultural demand.

Rubber: Cost Support and Supply Disruptions

Two rubber products ranked among top gainers:

1. Nitrile rubber rose sharply, supported by multiple butadiene price spikes and concentrated maintenance at major plants such as LANZHOU PETROCHEMICAL and NINGBO SHUNZE. Prices ranged between RMB 14,900–17,100/ton.

2. Natural rubber posted a modest 2.37% increase, supported by low inventories, weather disruptions in overseas producing regions, Thai-Cambodian border tensions, improving auto output, stronger tire exports, and macro policy stimulus.

Acrylic Acid: High Start, Then Weakening

Acrylic acid averaged higher year-on-year due to tight supply following late-2024 maintenance and pre-holiday restocking. February marked the annual peak. However, as new capacity materialized and demand growth lagged supply, prices weakened later in the year.

Plastics: Divergence Between EVA and Polyamides

1. EVA average prices rose slightly from RMB 10,768/ton in 2024 to RMB 10,942/ton in 2025. Policy adjustments to photovoltaic export rebates and strong PV-grade EVA demand tightened high-end supply, supporting overall pricing.

2. PA66 and PA6 saw significant declines due to weak downstream demand, expanding capacity, tariff impacts, and oversupply. PA66 ranged between RMB 14,500–17,400/ton, while PA6 bottomed at RMB 9,000/ton in October.

MMA and UPR Chain: Multi-Year Lows

Methyl methacrylate (MMA) fell to a five-year low amid new capacity launches and weak global demand.

In the UPR sector:

1. Neopentyl glycol declined 34.11% year-on-year.

2. Dicyclopentadiene fell 36.95%.

Both were pressured by expanding capacity, weak downstream demand, rising inventories, and aggressive price competition.

Caprolactam: High Start, Sustained Weakness

China's caprolactam market opened at elevated levels but weakened throughout 2025. Persistent capacity expansion, high operating rates, inventory accumulation, declining benzene costs, weak PA6 demand, and cautious market sentiment collectively drove prices significantly below 2024 levels.

Ethylene Oxide Derivatives: Butyl Glycol Weakens

Ethylene glycol monobutyl ether prices dropped sharply due to weak downstream demand, rising inventories, loose supply, and new production start-ups late in the year, which further dampened market sentiment.

Polyurethane: Aniline Under Pressure

Aniline prices trended lower and fluctuated within a lower range compared with 2024. Weak benzene costs and sluggish downstream demand pressured prices in H1, while stronger exports in H2 provided limited recovery.

Plasticizers: Octanol Faces Oversupply

Octanol prices declined significantly as new capacity expansion intensified oversupply. With limited downstream plasticizer demand growth, competition intensified and low-price transactions became the norm.

Outlook: From Capacity Expansion to Cost Efficiency

As China's chemical industry transitions from aggressive expansion to consolidation, the competitive landscape is shifting. With oversupply pressures persisting, the next phase of competition will center on industrial integration, operational efficiency, and cost optimization rather than scale alone.