Huitian New Materials Yicheng Factory Fire Causes Production Halt, Performance Doubling Hit by "Emergency Brake"

(Source: Yujian Energy)

Chemical fires are not limited to Huitian; Chengxing and Honeycomb have also experienced incidents. Three fires, three fates—what happened to Huitian?

On March 16, 2026, at 1:52 PM, in Yicheng, Hubei. The soft packaging workshop of Huitian New Materials’ wholly owned subsidiary, Yicheng Huitian, suddenly caught fire in Zones 1 and 2. The fire was quickly extinguished with no injuries or fatalities, but the Yicheng Emergency Management Bureau issued a “On-Site Handling Measures Decision” that same day: evacuate personnel, suspend production and operations temporarily, and resume only after the cause is investigated and approved. The factory building, equipment, and inventory suffered varying degrees of damage, and the production of some polyurethane packaging adhesives was affected. The company’s announcement admitted that the 2026 operating performance would be impacted.

Before this fire, Huitian New Materials had just reported impressive results: an estimated net profit attributable to the parent of 190 million to 255 million yuan in 2025, an increase of 86.55% to 150.36%. At the peak of rapid growth, a fire halted the production line.

Huitian New Materials is not the only chemical company to have been burned recently. On October 20, 2025, Chengxing Co., Ltd.'s Jiangyin plant experienced a spontaneous combustion caused by illegal operation of a yellow phosphorus tank truck, leading to suspension until November 20. In 2024 and 2025, Honeycomb Energy’s Jintan base caught fire twice within a year—once in the warehouse, once on the roof photovoltaic panels.

Three companies, three fires—no fatalities. But after the flames, responses varied: some remained calm, some sank into difficulties, and some just announced positive earnings forecasts before facing shutdowns. Despite being large-scale chemical enterprises and all experiencing intense fires, why are the outcomes so different?

Under Production Suspension Orders

Who can “cross-province” to rescue capacity?

Chengxing’s fire occurred at noon on October 20, 2025. Inside the Jiangyin plant, a yellow phosphorus tank truck was melting materials when a third-party operator violated procedures, causing a small amount of yellow phosphorus to spill and ignite. Yellow phosphorus ignites at around 34°C when exposed to air—an age-old problem in the chemical industry. Wuxi’s Emergency Management Bureau quickly issued a suspension order: temporarily halt production for rectification until November 20.

However, Chengxing had already calculated that: the Jiangyin plant’s phosphate and phosphate salt inventories were sufficient, so order delivery wouldn’t be affected. If delivery became tight, the Qinzhou plant in Guangxi could take over phosphate orders, as it had ample capacity and relevant certifications. This plan was not improvised—Jiangyin had previously shut down multiple times: in 2024 due to safety license expiration, in 2021 for rectification, and there was even an explosion at a subsidiary in 2020. Repeated incidents taught the company the logic of multi-site supply chain management. More importantly, this old plant was scheduled to relocate to the Lingang Chemical Park, with new projects already underway for safety and environmental assessments. The fire involved a plant that was about to close, so the pressure for rectification was naturally less.

Huitian New Materials also aims to follow this path. After the Yicheng factory fire, the company emphasized in its announcement that a working group had been established to handle production and operation adjustments, and other bases could take on some capacity. But the problem is, polyurethane packaging adhesives mainly serve food soft packaging and pharmaceutical packaging—downstream clients demand high stability from suppliers. Are product certifications interchangeable across different bases? Will customers wait? These issues are more complicated than inventory. Even more uncertain is the resumption time for Yicheng: the investigation into the cause, rectification, acceptance, and approval for restart could take weeks or months.

Honeycomb Energy’s two fires reveal another dilemma. In November 2024, the independent warehouse storing cathode and anode materials caught fire. In July 2025, the roof photovoltaic panels of a shutdown plant caught fire again. Both incidents occurred at the Jintan base. The company responded similarly: employee safety was unaffected, procurement channels were diverse, and production wouldn’t be significantly impacted. This sounds as calm as Chengxing’s response, but closer inspection shows Honeycomb Energy lacks a backup like Qinzhou. As the seventh-ranked power battery installer, its production is highly concentrated in Jintan. If the core production line encounters issues, cross-base adjustments are much more difficult than in the chemical industry. Behind the calm statements, there’s little choice.

Flames Behind

Whose safety management is leaking?

Chengxing’s fire was caused by third-party operator violations. But blaming third parties is easy; the real question is: why could they violate procedures inside the factory? Where was the on-site supervision? This isn’t Chengxing’s first safety breach—its subsidiary exploded in 2020, injuring one person; it shut down in 2024 due to safety license expiration; and it stopped production in 2021 for rectification. Repeated violations indicate the problem isn’t the system but its implementation. However, Chengxing has a trump card: the anticipated relocation of the old plant has eased the pressure for immediate rectification.

Honeycomb Energy’s safety record is even more problematic. In June 2020, its Wuxi subsidiary was fined 57,500 yuan for not storing hazardous chemicals in dedicated warehouses. In November 2024, the warehouse storing cathode and anode materials caught fire. In July 2025, the roof photovoltaic panels of a shutdown plant caught fire again. Less than eight months apart, both incidents occurred at the same base. As a battery company under Great Wall Motors, founder Wei Jianjun has publicly emphasized that safety in the automotive industry always comes first—“we cannot treat users as guinea pigs.” Yet, two fires in one year at a key supplier sharply contrast with Great Wall’s “quality first” positioning. More awkwardly, the company suffered over 4 billion yuan in cumulative losses from 2020 to 2022 and withdrew its IPO application in December 2023, with a 15 billion yuan fundraising plan on hold. Safety management issues will be punished by the capital markets.

The cause of the fire at Huitian is still under investigation, but the Yicheng plant isn’t new; aging equipment, operational standards, and inspection systems—something has always gone wrong. The company’s 2025 performance doubled, and production accelerated. Did inspection frequency decrease? Did safety investments keep pace? After the fire, the company stated it would conduct thorough safety inspections. But for a company in expansion, how to ensure every base remains safe as management scope broadens is the real test.

On the Road to Performance Growth

Who can avoid the black swan of fire?

After Chengxing’s fire, its stock price fell that day but quickly stabilized. The market believes this logic: the fire occurred at the soon-to-be-closed old plant, with sufficient inventory and Qinzhou plant backing, so losses are manageable. More importantly, the company’s net profit attributable to the parent in the first half of 2025 surged by 211.08%, turning losses into profits. The fire was just a minor episode on the recovery path.

Honeycomb Energy’s situation is much heavier. After two fires, the company has yet to announce a new IPO timetable. With a production volume ranking seventh, it has accumulated losses exceeding 4 billion yuan. The fire itself may not have destroyed many equipment, but safety management loopholes have raised doubts about its production stability. For a company urgently needing financing, such doubts are fatal. Even more troubling, both fires occurred at the same base, indicating systemic issues rather than accidents. Systemic problems can’t be solved with a few announcements.

Huitian New Materials just tasted the sweetness of doubling its performance but was cooled by the fire. The company admitted in its announcement that its 2026 operating performance would be affected. How significant will this impact be? It depends on the resumption time, customer retention, and whether competitors will seize the opportunity. The polyurethane packaging adhesive market isn’t monopolized, and downstream companies won’t wait indefinitely. No matter how strong the capacity allocation at other bases, the order loss caused by the Yicheng shutdown can’t be changed. The optimistic outlook from January’s earnings forecast was shattered by the March fire.

The flames in the chemical industry never truly extinguish with a mere announcement. But these three fires at least show one thing: the duration of shutdowns, performance losses, and capital patience were already predetermined before the flames ignited. Calm responses with backup plans, or toughing it out without them, or abrupt growth halts—fire affects every company equally, but how much it burns depends on how well they prepared before the fire started.