Sprockets! Power Demand Surges as Gas Spreads Compress and European Chemicals Stop Dancing

Key Findings

General Thoughts: Growing structural natural gas demand, persistent global chemical overcapacity, and tighter grid constraints will jointly determine competitiveness and boost cross-sector consolidation well into 2026.
Supply Chain/Commodities: Structural cost disadvantages, weak demand, and global overcapacity deepened Europe’s 2H25 chemical sector downturn, reinforcing its need for coordinated rationalization and credible policy.
Energy/Upstream: Rising natural gas dependence, grid congestion, and accelerating electrification demand create structural scarcity, positioning integrated power-system players to capture value as load growth intensifies.
Sustainability/Energy Transition: Integrated grain-to-ethanol systems, accelerating low-CI credit economics, and co-product merchandising scale benefit integrated players disproportionately amid feedstock and policy swings.
Downstream/Other Chemicals: Normalized freight and a weaker dollar reset cost curves, shifting advantage toward integrated low-carbon exporters while compressing margins for fragmented global downstream markets.