Champagne Off, Reality On: Chemical Markets To Reward Preparedness, Not Patience In 2026

Depressed consumer sentiment and weak business expectations imply demand will not offset oversupply, with 2026 outcomes more likely to be determined by restructuring discipline rather than cyclical recovery hopes.
Flatter oil-to-gas ratios and low expectations for improvement stabilize chemical costs but delay natural exits, compress margins globally, and force management to execute, integrate, and rationalize capacity to lift returns.
Global chemical sector equity dispersion already rewards integrated producers acting decisively, as high-cost non-integrated players face escalating pressure to close assets, consolidate, or accept prolonged value erosion.
The most underappreciated opportunities in 2026 will likely arise where low expectations intersect with balance sheet strength, credible restructuring, and a willingness to exit uneconomic capacity across markets.
Otherwise, depressed global energy prices and freight rates mask binding carbon costs, currency swings, and oversupply, forcing restructuring, cautious trade, and margin defense across chemicals and adjacent markets.

Companies Mentioned: ExxonMobil, Dow, Westlake, Braskem, HD Hyundai, Lotte Chemical, LyondellBasell, BASF, SABIC, Sinopec
Products Mentioned: Ethylene, Polyethylene (PE), HDPE, Crude Oil, Natural Gas, Naphtha, Ethane, LNG

Exhibit 1: US consumer sentiment ended 2025 near multi-decade lows; corporate outlooks should not rely on recovery.