Margins Without Shock Absorbers: Ethylene’s Co-Product Reckoning Reshapes Competitiveness Globally

Key Findings

General Thoughts: Ethylene margins track co-product despair more than oil-gas spreads, flattening global cost curves and forcing integrated producers to weaponize downstream portfolios rather than feedstock advantage.
Supply Chain/Commodities: Historically cheap propane fails to gain a foothold in cracker feedslates, as collapsed co-products cut margins, narrowing arbitrage and turning capacity additions into catalysts for rationalization.
Energy/Upstream: The 4Q25 US propane glut, partially tempered by recent winter events, fragments transatlantic light-end spreads and reconfigures global clearing prices around volatile heating, storage, and export constraints.
Sustainability/Energy Transition: Carbon-capture and hydrogen narratives pivot from mega-export dreams to retrofit-first, cluster-embedded projects, constrained by thin binding offtake, volatile policy, and skeptical buyers.
Downstream/Other Chemicals: Low but jumpy container freight and a softening dollar amplify trade elasticity, shifting polymer, fertilizer, and fuel demand toward emerging-market buyers with constrained hedging.