Farewell to High-End Dependence: Wanhua Chemical's 4,000-Ton End-Capped Polyether Project Takes Root, Special Polyether Market “Involution” Intensifies

On May 28, 2025, the environmental impact assessment (EIA) draft for the 4,000-ton end-capped polyether project of Wanhua Chemical Group Co., Ltd. was officially announced. The project is located in the Yantai Chemical Industry Park and will implement technical modifications by utilizing existing plant buildings and public utilities. The existing No. 2 production line will be modified to retain the original production capacity, while a new anti-fog agent production line will be constructed simultaneously. Upon completion, the project will achieve a production scale of 4,000 tons/year of end-capped polyether and 100 tons/year of anti-fog agents.

End-capped polyethers, as a high-end category of fine chemical additives, are modified products of conventional polyethers obtained through terminal functional group modification such as etherification, esterification, and alkyl modification. By replacing the terminal hydroxyl functional groups of polyether molecules through special reactions, they eliminate the defects caused by hydrogen-bonding side reactions in conventional polyethers and offer performance advantages such as low pour point, strong oxidative stability, and excellent viscosity index. They are widely used in polyurethane foam stabilizers, high-end sealants, coatings, daily chemical and textile applications, anti-fog materials, and other fields.

Benefiting from the expanding demand driven by new energy vehicles, high-end building sealants, eco-friendly coatings, and the upgrading of polyurethane new materials, China’s end-capped polyether industry has maintained an average annual growth rate of over 13% in the past three years. In 2025, the overall domestic market size exceeded RMB 4.8 billion, while high-end silane- and amine-terminated products recorded growth of more than 18%, making it one of the few high-prosperity niche segments in the polyether industry.

The global industry for end-capped polyethers currently exhibits a competitive landscape characterized by international giants monopolizing the high-end segment, while domestic companies pursue differentiated catch-up strategies. Benefiting from years of technical accumulation and patent barriers, overseas enterprises firmly control the high-end market, with Dow, Kaneka, and Evonik monopolizing the high-end silane-terminated polyether sector. Arkema’s trimethoxysilyl-terminated polyether, Clariant’s polyetheramines, Evonik’s silylated specialty polyethers, and Asahi Glass Co. (AGC)’s silane-terminated polyethers all hold significant positions in their respective global niche markets. In China, high-end products have long relied on imports, resulting in insufficient supply chain stability.

China’s domestic end-capped polyether industry has achieved import substitution breakthroughs in mid-range products. In the polyetheramine segment, major players include Wanhua Chemical, Chenhua Co., Ltd., Huangma Technology, and Longhua New Materials. In the silane- and silyl-terminated polyether segment, companies such as Baiyun Chemical and Ruiyang Antai have also established a presence. However, most domestic producers still operate mainly small- to medium-scale facilities, with relatively traditional production processes. Their capabilities for mass-producing high-end products featuring ultra-high end-capping rates and high purity remain weak. Low-end products face severe homogenized competition, while a significant gap persists in high-end capacity, leaving substantial room for import substitution.

From "full chain" to "high-end" in-depth advancement

As a global leader in the polyurethane industry, Wanhua Chemical has established a comprehensive presence in isocyanates (MDITDI, etc., polyetherPolyol, catalysts, foam stabilizers and other full-range product supply systems. This full industrial chain advantage is particularly evident in the end-capped polyether project. After the project is completed, end-capped polyether can form direct upstream-downstream synergies with its existing foam stabilizer business, enabling the internal direct supply of core raw materials and thereby significantly shortening domestic and overseas supply chain cycles. This vertically integrated layout spanning “polyether raw materials—end-capping modification—foam stabilizer production” will significantly enhance Wanhua’s overall cost competitiveness and supply chain stability in the polyurethane additives sector.

In recent years, Wanhua Chemical has significantly accelerated its layout in the high-end polyether sector. In addition to the recent terminal-ended polyether project, Wanhua has been actively expanding its production in areas such as high-activity high-rebound polyethers, low-unsaturation polyethers, polyether amine series, and the research and development of special silane-terminated polyethers. Behind this series of moves is Wanhua Chemical's profound insight into the structural changes in the global polyether market. The competition in the market for ordinary soft foam and hard foam polyethers has become increasingly intense, with profit margins continuing to come under pressure; meanwhile, applications in lightweight materials for new energy vehicles, composite materials for wind turbine blades, and high-end sectors are on the rise.AdhesiveSpecial sealing polyether for emerging fields such as sealing adhesives and 5G communication materials still maintains a high profit margin and growth resilience.

In the long term, downstream upgrades in new energy, building energy efficiency, and high-end adhesive materials will continue to drive incremental demand for high-end capped polyethers. The low enthusiasm of overseas giants for capacity expansion provides an excellent window of opportunity for domestic companies to capture the high-end market. As leading enterprises such as Wanhua continue to make technological breakthroughs and bring capacity online, China’s capped polyether industry will gradually break the overseas technological monopoly, and industry competition will shift from low-end price wars to comprehensive competition in process technology, product quality, and full-industry-chain strength.