China’s Wanhua Chemical Q3 profit falls 29% on lower margins

SINGAPORE (ICIS)–China’s major isocyanate producer Wanhua Chemical reported a 29% year-on-year decrease in Q3 profit as falling prices of some products and rising cost eroded margins, the company said on Tuesday.

Turnarounds at its production units at Yantai in China, and in Hungary also dragged down earnings for the period.

million CNY	Q3 2024	Q3 2023	% change	Jan-Sept 2024	Jan-Sept 2023	% change
Revenue	50,536.79	44,927.77	12.5%	147,604.15	132,554.14	11.4%
Operating profit	3,985.81	5,316.14	-25.0%	14,556.54	15,592.67	-6.6%
Net Profit	2,918.95	4,134.95	-29.4%	11,093.32	12,703.18	-12. 7%

Key points:

– Q3 demand for pure methylene diphenyl diisocyanate (MDI) sluggish amid high inventory and fierce competition

– For polymetric MDI, demand from the fridge sector as well as from the construction sector increased, while exports were stable in July-September 2024.

– For toluene diisocyanate (TDI), demand was weak amid mounting inventories in downstream home furnishing industry.

– Demand of polyols also slumped by poor needs from home furnishing and car sectors.

– On cost side, Q3 prices of benzene and liquefied petroleum gas (LPG) – two of Wanhua Chemica’s key raw materials – increased by 13%-25% on year, although coal prices dropped by about 2%.