Azelis Group NV : Review of capacity additions and potential tailwinds in 2026

After a difficult year 2025, a significant rebound in chemical performance in 2026 is not very likely as weak end-market demand continues, while significant capacity additions in key feedstock like ethylene will limit the increase in utilization rates. However, some positive news, especially for European chemical producers, have come up including changes in the asphyxiating regulatory and environmental framework. Other measures, including potential anti-dumping duties and government support are also on the books and could help boost the performance of European chemical performance. That said, the volatile geopolitical environment will continue to be a key element in the chemicals bonds’ pricing, as seen with the latest attacks on Iran and Qatar. As usual, specialty chemicals will remain much more resilient thanks to their strong pricing power and significantly lower energy consumption vis-à-vis commodity players. Despite the current volatility, we note that HY chemical producers in the European space do not have significant debt maturing before the debt wall set in 2029.