Weekly Strategic Signals in Global Chemicals & Materials — Implications for Strategy, Capital & Supply Chains (January 26–February 1,2026)

1. Europe — Collapse in Chemical Industry Investment and Capacity Retrenchment

Date: January 27, 2026

Event:European chemical industry investment in 2025 fell by more than 80% year-on-year, with new capacity additions dropping from approximately 1.9 million tonnes in 2024 to around 0.3 million tonnes. Industry data and corporate disclosures indicate accelerated plant closures driven by high energy costs, regulatory burdens, and declining global competitiveness.

Impact Pathway:The sharp contraction in investment undermines Europe’s position as a global chemical manufacturing hub. Reduced capacity weakens supply chain resilience, increases reliance on imports, and shifts marginal production toward Asia and the Middle East. Over time, this may permanently alter global trade flows for basic and intermediate chemicals.

Financials:Significant capex pullback; impairment risks for existing assets; rising fixed-cost pressure per unit; margin erosion for European producers operating below optimal utilization rates.

Operations:Plant shutdowns and mothballing; reduced operating rates; workforce reductions; reassessment of European asset portfolios by multinational chemical companies.

Beneficiaries:Asian and Middle Eastern chemical exporters; regions with lower energy and regulatory costs.

Pressured:European integrated chemical producers; energy-intensive basic chemicals (petrochemicals, chlor-alkali, fertilizers).

Watchpoints: EU industrial policy responses; energy price developments; further capacity closure announcements; long-term impact on Europe’s chemical self-sufficiency.

2. Germany — Wacker Chemie Reports Sharp Earnings Decline

Date: January 28, 2026

Event:Wacker Chemie reported a significant decline in 2025 earnings, with EBITDA falling approximately 42% year-on-year amid weak global demand and persistently high energy costs. The company announced restructuring measures, including job reductions and cost-control initiatives.

Impact Pathway:Earnings pressure highlights structural challenges facing European specialty and performance materials producers. Weak end-market demand combined with elevated operating costs compresses margins and limits reinvestment capacity, reinforcing the broader European chemical downturn.

Financials: EBITDA decline ~42%; revenue down ~4% year-on-year; restructuring charges expected; cash preservation prioritized.

Operations:Cost-cutting programs; workforce reductions; portfolio optimization; delayed or scaled-back capital projects in Europe.

Beneficiaries:Lower-cost specialty chemical producers outside Europe; competitors with diversified geographic production footprints.

Pressured:European specialty chemical manufacturers with high energy exposure.

Watchpoints: Management guidance for 2026; energy cost trajectory; customer demand recovery in construction, electronics, and industrial segments.

3. United States — Dow Announces Large-Scale Workforce Reduction and Restructuring

Date: January 29, 2026

Event:Dow Inc. announced plans to eliminate approximately 4,500 jobs globally (around 13% of its workforce) as part of a restructuring program aimed at improving profitability by roughly USD 2 billion. The move follows weak demand and a reported net loss in Q4 2025.

Impact Pathway:The restructuring underscores persistent demand weakness across global petrochemicals and plastics markets. Cost reduction, automation, and operational streamlining are becoming primary levers for profitability rather than volume growth.

Financials:Targeted USD 2 billion core profit improvement; restructuring and severance costs in the near term; pressure on free cash flow during transition.

Operations:Workforce reductions; consolidation of production and support functions; increased reliance on digitalization and automation.

Beneficiaries:Producers with leaner cost structures; competitors operating in regions with cheaper feedstocks.

Pressured:Employees and communities tied to Dow’s legacy production assets; margin-exposed commodity chemical segments.

Watchpoints: Execution of restructuring plan; demand recovery in packaging, construction, and automotive; implications for global supply discipline.

4. China — Wanhua Chemical Plans Large-Scale Capital Injection into Olefins Subsidiary

Date: January 31, 2026

Event: Wanhua Chemical announced plans to inject over RMB 19 billion into its olefins subsidiary to support capacity expansion and integration along the petrochemical value chain. The announcement coincided with strong market performance of chemical equities.

Impact Pathway:The investment signals continued confidence among leading Chinese producers in long-term petrochemical demand and integration advantages. While global peers retrench, Chinese champions are reinforcing scale and feedstock-to-derivatives integration.

Financials:Capital injection exceeding RMB 19 billion; increased balance-sheet leverage in the short term; long-term return dependent on utilization and downstream margins.

Operations:Capacity expansion; deeper upstream-downstream integration; enhanced supply security for key chemical intermediates.

Beneficiaries:Integrated Chinese chemical producers; domestic downstream users benefiting from stable supply.

Pressured:Smaller, non-integrated petrochemical producers facing intensified competition.

Watchpoints: Project execution timeline; domestic demand recovery; margin performance amid global oversupply risks.

5. China / Europe — Chinese Chemical Firms Expand Overseas Market Engagement via JEC Composites Show

Date: January 31, 2026

Event:Multiple Chinese chemical and materials companies confirmed participation in the JEC World Composites Show in France, combined with European business visits targeting partnerships with leading chemical and materials groups.

Impact Pathway:Despite European capacity contraction, technology collaboration and downstream market access remain strategically attractive. Chinese firms are increasingly separating “production geography” from “technology and customer geography.”

Financials:Limited short-term financial impact; long-term potential for licensing, joint development, and overseas sales growth.

Operations:Increased overseas marketing and technical exchanges; exploration of cooperative R&D and application development.

Beneficiaries:Chinese advanced materials suppliers; European firms monetizing technology and application know-how.

Pressured:Traditional export-only business models lacking overseas engagement capabilities.

Watchpoints: Depth of cooperation agreements; regulatory and trade barriers; follow-up investments or joint ventures.