Crack Less, Feed More: Capital Feeds Fertilizer, Midstream, and Specialties as Plastics Starve

Key Findings

General Thoughts: Ammonia’s fertilizer-anchored cycle diverges from most chemicals, signaling tight supply and investment incentives, while petrochemicals face surplus-driven signals discouraging growth capital.
Supply Chain/Commodities: Asian petrochemicals face structural oversupply, with pricing, not demand, driving losses, forcing restructuring, cost exits, and portfolio shifts that favor early movers through 2026.
Energy/Upstream: US midstream integration and export scale anchor resilience, shifting chemical gravity to advantaged regions while bottlenecks, not oversupply, emerge as the underappreciated margin risk.
Sustainability/Energy Transition: Carbon price volatility fails to offset Europe’s natural gas disadvantage, leaving CBAM supportive at borders but capital flows driven by energy economics and execution in 2026.
Downstream/Other Chemicals: Auto softness shifts chemical pricing power downstream, as mix, contracts, and aging fleets support specialties while tariffs, lost volume, and regionalization cap commodity margins.