Chinese chemical net exports remain elevated, prolonging competitive pressure on European chemical companies

Overview

This report focuses on China's chemical import and export trade flows from January to February 2026, covering multiple categories including basic chemicals, polymers, vitamins, fragrances and flavors, battery materials, and fertilizers, and maps trade volumes, price trends, and exposure among European chemical companies. The core view is that China's net exports remain elevated across many products, and that front-loaded exports in some categories ahead of export tax rebate changes continue to create price and volume competition pressure for European producers.

Core views

Pressure from Chinese chemical exports has not eased. Most tracked products show China's net export volumes at or near record highs, especially caustic soda, TDI, vitamin A, NMC cathode materials, polyamide, methionine, and silicones, where year-on-year growth is particularly strong. Front-loaded shipments ahead of export tax rebate removal are an important incremental factor for silicones and NMC cathode materials, and may lead to intensified market competition and channel inventory in 1Q26. On the other hand, China still remains a selective net importer in a small number of upstream or specialty products such as ethylene and lithium carbonate.

Analysis framework

The report uses a trade-flow tracking framework to compare China's January-February 2026 net exports or net imports by chemical product, year-on-year changes, price changes, and the net seller or net buyer exposure of European chemical companies in related products. The analysis also references regional chemical production, PPI trends, production and sales breakdowns of European companies by region, and monthly, year-on-year, and versus-2025-average changes in product prices.

Methodology notes

• Trade flow analysisChina chemical net export/net import tracking

  Use China's customs trade flows to infer global supply-demand conditions and competitive pressure.

  Rising net exports usually imply that Chinese supply is intensifying competition in overseas markets; persistently high net imports suggest that China still depends on external supply or that domestic supply of the relevant products remains insufficient.

• Price analysisMoM/YoY/QoQ price comparison

  Compare February prices versus January, February 2025, the 4Q25 average, and the 2025 average.

  Falling prices alongside rising export volumes usually point to supply pressure or intensifying competition; stable prices with elevated exports may indicate that export quotations have not yet fully followed domestic spot price increases.

• Company exposure mappingNet seller/net buyer read-across

  Map chemical trade trends to European companies' revenue, cost, or competitive exposure.

  Net sellers are generally more negatively affected by rising Chinese exports and falling prices; net buyers may benefit from lower prices for certain raw materials.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Wacker Chemie

  Net seller in silicones, with silicones being the main read-across product.

  Strengths

  If rising domestic DMC prices ultimately pass through to export prices, this could support pricing.

  Weaknesses

  China's silicones net exports are at or near record highs, and export prices have not yet clearly followed domestic spot price increases.

  Comparison

  Compared with net-buyer companies, Wacker is more directly exposed to Chinese export competition.

  Risks

  Inventory accumulation from front-loading ahead of export tax rebate removal could pressure subsequent prices.

• Solvay

  Net seller in soda ash and silica.

  Strengths

  Some European import volumes remain relatively limited.

  Weaknesses

  China's global soda ash net exports and exports to Europe have risen to high or record levels.

  Comparison

  A more localized silica exposure may reduce some long-distance trade impact.

  Risks

  If the arbitrage window for Chinese material into Europe persists, local European pricing pressure may intensify.

• BASF

  Has net-seller or raw-material exposure across multiple categories, including ethylene, TDI, MDI, vitamins, polyamide, acrylic acid, and NMC cathode materials.

  Strengths

  A diversified product portfolio can help smooth volatility in any single product.

  Weaknesses

  China's net exports have risen sharply or prices have fallen year on year in several related categories.

  Comparison

  Compared with single-product companies, BASF has broader exposure but a more complex impact pathway.

  Risks

  Chinese export pressure, falling prices, and battery-material competition may weigh on margins.

• Umicore

  Net seller in NMC cathode materials, with lithium carbonate and lithium hydroxide as raw materials.

  Strengths

  China remains a net importer of some lithium raw materials, which helps frame upstream supply-demand conditions.

  Weaknesses

  China's net exports of NMC cathode materials have increased sharply year on year.

  Comparison

  Compared with the LFP chain, NMC faces both Chinese material-export pressure and competition from battery technology routes.

  Risks

  Front-loading ahead of rebate changes may lead to short-term inventory build and price competition.

• Arkema

  Has read-across exposure to propylene derivatives, silicone raw materials, fluoropolymers, polyamide, acrylic acid, and sulfur chemicals.

  Strengths

  Its exposure is more granular in certain specialty materials.

  Weaknesses

  Some trade data are reported at a broad-category level and cannot fully map to Arkema's specific products.

  Comparison

  The report notes that broad-category data for fluoropolymers and polyamide do not map perfectly to individual names.

  Risks

  If export pressure persists in the broad product categories, it could affect price expectations and market sentiment.

• Akzo Nobel

  Has net-buyer or raw-material exposure in parts of epoxy resins, acrylic polymers, and the acrylic chain.

  Strengths

  If raw material prices decline, net buyers may benefit from lower costs.

  Weaknesses

  Demand conditions and price pass-through may still be affected by the industry cycle.

  Comparison

  Compared with net-seller companies, Akzo may be more of a cost beneficiary in certain products.

  Risks

  If downstream demand weakens, lower raw-material costs may not fully translate into profit improvement.

Key data

• Sample periodJanuary-February 2026The data capture Chinese chemical trade flows before the escalation of the Middle East conflict.
• Highest YoY net export growth categoriesCaustic soda +109%, TDI +100%, vitamin A +83%, NMC cathode materials +71%, polyamide +71%, methionine +71%All are year-on-year changes in cumulative net exports for January and February.
• Silicones net exports+42% YoYWacker is the main net-seller read-across; front-loading ahead of export tax rebate changes may have boosted volumes.
• NMC cathode materials net exports+71% YoYUmicore and BASF are net sellers, and were clearly affected by front-loading ahead of the removal of export tax rebates.
• Vitamin pricesVitamin A -53% YoY, vitamin E -55% YoY, vitamin C -24% YoYTable 1 shows a pronounced year-on-year price decline in February, and BASF and DSM-Firmenich have net-seller exposure in these categories.
• Soda ashNet exports to Europe are high or at record levelsSolvay is a net seller; the report suggests monitoring whether this arbitrage window persists in the coming months.
• EthyleneChina remains a strong net importerBASF is a net seller; February import prices fell sharply both year on year and month on month, indicating that new supply is weakening the supply-demand balance.

Impact & implications

For the European chemicals sector, elevated Chinese export volumes and falling prices in some categories mean that earnings and pricing power remain under pressure. Net-seller companies face more direct competition in silicones, soda ash, TDI, MDI, vitamins, polyamide, fluoropolymers, acrylic acid, and battery materials; net buyers may get some cost relief from lower raw-material prices. If front-loading driven by export tax rebate removal turns into channel inventory, short-term competition could become even more intense, but subsequent monthly data will be needed to confirm whether this persists.

Risks

• Export tax rebate policy changes in China may distort trade data for January and February due to front-loading, and volumes may retrace in later months.
• Broad product categories do not fully match each company's actual product mix, so some read-across may be imperfect.
• The Middle East conflict may change supply patterns in APAC and the Middle East, causing future supply-demand and price trends to diverge from historical trade-flow signals.
• If strong trade flows have led to inventory build, prices may remain under pressure in the near term.
• If the arbitrage window for Chinese exports into Europe persists, local European producers could face stronger import competition.

What to watch

• Whether silicones and NMC cathode material export volumes decline after the April 1 removal of export tax rebates.
• Whether high exports of soda ash to Europe persist and whether a stable arbitrage channel emerges.
• Whether lower ethylene import prices continue to indicate that new supply is weakening the supply-demand balance.
• Whether prices continue to fall for high-growth categories such as vitamin A, vitamin E, TDI, and caustic soda.
• The impact of the Middle East conflict on production disruptions, replenishment demand, and chemical prices in APAC and the Middle East.
• How European chemical companies discuss Chinese export competition and inventory levels in their 1Q26 and 2Q26 earnings.