Midweek New Round of China-US Trade Talks! Covestro Further Cuts TDI Supply to China by 10%! Crude Oil and Plastics Markets All Green

The new round of China-U.S. trade talks this week! Involving fentanyl tariffs, chips, and soybeans.

According to a report by the foreign media outlet The Wall Street Journal, the Chinese side will travel to Washington this week to hold a new round of trade talks with U.S. trade and Treasury officials and engage with representatives of the American business community.

The report states that this week's discussions will focus on issues such as China's import of U.S. soybeans. The Trump administration's demand for this has not yet been met. As the soybean harvest season approaches, China has not placed any orders, and American farmers are facing the risk of unsold crops.

According to sources contacted by The Wall Street Journal, the Chinese side will demand that the Trump administration lift the 20% tariffs imposed on Chinese products over the fentanyl issue. China’s position is that “the U.S. has no grounds to impose a 20% tariff on Chinese products under the pretext of fentanyl.”

China is expected to continue urging the U.S. to relax restrictions on the export of American technology products to China. In July this year, the Trump administration lifted the ban on the sale of Nvidia's H2O chips to China. However, it has been reported that these chips have backdoor security risks, and foreign media claim that Nvidia has stopped the production of H2O chips.

Cut another 10%! Covestro urgently notifies further reduction of TDI supply to China

Recently, global chemical giantsCovestro has once again issued an urgent notice, announcing that it...The force majeure event at the German factory has lasted longer than expected, and the supply to the China region this month will be reduced by another 10% to support the European market.This is the second round of supply reduction for the China region this month, with a cumulative reduction of 25% in TDI supply for the month. This decision comes less than two weeks after a TDI (toluene diisocyanate) supply shortage warning was issued to customers in mid-August.

Meanwhile,China's TDI industry is gradually becoming a core pillar of the global supply chain.According to customs data from January to July 2025, China exported a total of 307,700 tons of TDI, an increase of 74.9% compared to the same period in 2024.

Wanhua Chemical, the world's largest manufacturer, is also making continuous efforts in the TDI sector.

On August 18, Wanhua Chemical announced that the new Phase II TDI facility (360,000 tons/year) at its Fujian Industrial Park has recently been completed and put into operation, with qualified products being produced. As of the end of 2024, Wanhua Chemical will have a TDI production capacity of 1.11 million tons per year. After the commissioning of Wanhua's second 330,000 tons/year TDI project in Fujian, the company's total TDI production capacity will reach 1.44 million tons per year.

According to the announcement, the integrated facilities of Wanhua's subsidiary, BorsodChem in Hungary, including an MDI plant (400,000 tons/year) and a TDI plant (250,000 tons/year), along with related auxiliary units, began to be gradually shut down for maintenance on July 23, 2025. As of now, the maintenance of the aforementioned TDI plant has been completed, and it has resumed normal production.

The latest status of TDI global production capacity units is as follows:

Latest Plastic Prices on August 27

In the early trading session today, crude oil futures main contracts led the decline in the futures market, with SC crude oil main contracts falling over 3%. PP, PE, and PVC were all down, and styrene dropped more than 1%.