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Although the policy has not yet officially taken effect, most domestic suppliers have already proactively adjusted their export quotations, incorporating the cost changes brought about by the cancellation of tax rebates into their pricing systems in advance, and the policy effects have already been transmitted to downstream industries.
It is understood that the core driving force behind this early price adjustment stems from the industry's widespread concern about shipping cycles and customs clearance timeliness.
Global logistics remain under pressure, with limited shipping space. There is significant uncertainty regarding whether recently booked goods can successfully clear customs before April 1st. According to relevant announcements from the Ministry of Finance and the State Taxation Administration, goods exported before the policy implementation date are still eligible for a 13% export tax rebate; however, goods exported on or after April 1st are no longer eligible. To mitigate potential financial risks arising from mismatched timing, domestic suppliers are generally adopting a prudent strategy, uniformly adjusting export prices to a basis excluding tax rebates.
Judging from the current market performance, suppliers have generally fully factored in the impact of the cancellation of the 13% tax rebate in their FOB quotations, and most transactions have been completed at the higher price range after the adjustment. Currently, a few suppliers are still offering quotations including the tax rebate, but these quotations are decreasing rapidly and are expected to basically exit the market in the short term, as the industry has already switched to the new export pricing system.
In stark contrast to the sharp price adjustments on the export side, the domestic polyether polyol market has remained generally stable.
Industry insiders say that the domestic price already includes 13% VAT and is not directly affected by the cancellation of export tax rebates. Therefore, the core of the policy adjustment is the export pricing mechanism, rather than the cost structure on the production side. Domestic prices can serve as an important reference for assessing export costs.
Product Grade | Including tax refund (FOB USD/ton) | Excluding tax rebates (FOB USD/ton) | Domestic market price (DEL East China RMB/ton) |
|---|---|---|---|
3000MW of flexible foam polyether polyol | 1590 – 1640 | 1790 – 1840 | 12800 – 13200 |
Polymer polyols 42–45% | 1660 – 1720 | 1860 – 1920 | 13400 – 13800 |
Rigid foam polyether polyol | 1540 – 1590 | 1740 – 1790 | 12400 – 12800 |
Note: FOB prices are reference quotes for drummed containers provided by suppliers in multiple regions of China; domestic market prices are for bulk/bulk delivery in East China.
China's polyether polyol exports have experienced rapid growth in recent years, reaching a total of 2.7605 million tons in 2025, a year-on-year increase of 28.14%. The export market has become a core profit driver for many companies. The cancellation of tax rebates has directly led to an increase in export costs and has also prompted various market players to adjust their strategies.
For domestic suppliers, raising export prices in advance is intended to establish a higher price anchor for business negotiations after April 1st; for overseas buyers, the focus of procurement decisions is shifting from pursuing short-term cost optimization to paying more attention to the controllability at the execution level—although completing shipments before the policy takes effect may gain a short-term cost advantage, the risks brought about by the uncertainty of the timing should not be ignored.
In terms of regional competition, in the short term, the international price competitiveness of Chinese polyether polyols will face certain challenges, and narrowing profit margins may prompt domestic suppliers to adopt more rational pricing and sales strategies. Meanwhile, suppliers in Europe and other regions may attempt to expand their market share in markets with high import dependence, such as India and Southeast Asia, but their actual substitution capacity remains limited due to persistently high energy and raw material costs. Industry analysts believe that given China's production capacity and market share advantages in the polyether polyol sector, the regional market's reliance on Chinese supplies is unlikely to fundamentally change in the short term.
Overall, with the approaching cancellation of export tax rebates, China's polyether polyol market is gradually entering a phase of structural price strengthening. The industry's procurement strategy will shift its focus from simply pursuing short-term cost optimization to prioritizing execution certainty and supply security. In the future, the industry may accelerate its transition away from low-price competition and gradually move towards high-quality development.