The Reset Effect: When Structural Strain Becomes Industry’s Strongest Tailwind

Collapsing ethylene co-product credits and stubbornly oversupplied polymer markets now erase traditional feedstock advantages, potentially positioning the industry for a 2026 reset offering underappreciated upside.
Global cost-curve flattening, cheap freight, and Asian oversupply have rattled historical pricing relationships, forcing producers to rethink return strategies as investors increasingly demand action to restore profitability.
Propane’s recent disconnect from cracking economics reveals deep systemic stress across olefins, signaling a turning point at which restructuring and consolidation become catalysts shaping competitive outcomes.
US commodity chemical equities embed extreme pessimism, creating a setup in which valuation re-rating potential exceeds expectations if demand growth and supply attrition unite to more than offset excess capacity.
Otherwise, we discuss surging US natural gas prices relative to European markets, persistently tight ammonia markets, and shifting freight, FX, and mineral dynamics that are shaping global cost competitiveness and trade.

Companies Mentioned: Dow, LyondellBasell, ExxonMobil, CF Industries, Fertiglobe, Rio Tinto, Glencore, Albemarle, Ganfeng, Lithium Americas, Codelco
Products Mentioned: Polyethylene, Ethylene, Ethane, Propane, Butadiene, Propylene, Ammonia, Natural Gas, Crude Oil, Gasoline, Diesel, LNG, LPG, Naphtha, Methanol, Corn, Phosphate, Soybeans, Copper, Lithium, Nickel, Cobalt, Zinc, Manganese, Aluminum, Steel

Exhibit 1: US petrochemical commodity equities underperform amid compressed cost positions and low expectations.