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(Bloomberg) — China’s Wanhua Chemical Group Co. pledged to accelerate its overseas expansion to help counter rising trade risks after the petrochemical giant reported an increase in first-quarter earnings.
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Net income rose 21% to 3.72 billion yuan ($546 million) in the first three months of the year, according to a filing late Monday. Wanhua also reported a 3.9% decline in full-year earnings for 2025, in line with analyst estimates.
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The effective closure of the Strait of Hormuz due to the Iran war has upended the global petrochemical industry, choking off flows of inputs such as naphtha and liquefied petroleum gas needed to make a range of products. Wanhua is the world’s biggest producer of methylene diphenyl diisocyanate, used to make insulation foam, and typically buys feedstock from the Middle East.
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“The company is strengthening its global market presence and accelerating expansion in emerging markets to mitigate trade barriers,” Wanhua said in its earnings statement on Monday, without elaborating. Risks likely include US tariffs following an anti-dumping investigation into Chinese MDI exports.
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The fallout from the Iran war has started to snarl traffic at the Panama Canal as some Asian producers seek to secure US energy, including crude, to keep their operations running. That’s prompted some companies to pay millions in extra fees to progress shipments quickly through the waterway.
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Wanhua’s “global business faces some risks due to rising shipping costs and blockage of commercial traffic in the Strait of Hormuz,” according to a research note from Albert Li, an analyst with Bloomberg Intelligence. Still, the company could “exceed analysts’ estimates again in the second quarter as the Iran war has lifted MDI spreads significantly since March,” he said.
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Outside of petrochemicals, Wanhua is boosting investment in battery materials to diversify its growth drivers. The company is focusing on lithium iron phosphate batteries and developing renewable energy storage integration projects.
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