Themes For 2025 – Oversupply In Some Sectors and Shortages in Others – Plus Uncertainty

Several themes that emerged in 2024 will run through 2025, especially the power shortage theme, which we expect to drive more investment and flexibility from regulated utilities and developers.
Polyethylene markets weakened further in December, and we do not see this as a usual seasonal dip, nor has the equity market. We still think everyone is too optimistic – weaker margins will drive shutdowns.
The Trump administration will create further anti-transition momentum while giving companies and countries an opportunity to walk back plans that are proving too expensive – tariff risk = volatility.
We continue to watch the industrial gas sector and note that while the Air Products saga might be a distraction, better industrial policy in Europe and the US, with or without a strong transition overlay, is good for gases.
Otherwise, we look at falling chemical and polymer prices and margins – with methanol as a stand-out variant – and more signs of weakness in Germany. Hydrogen and sustainability, in general, are also losing momentum.

Exhibit 1: Things we will be watching in 2025