Chemicals and Materials

Chemicals and Materials Strategy

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Thesis

Why this sector matters to investors right now. Structural, not market timing.

Chemicals and materials on this page are five businesses that share an industrial customer and a commodity cycle, not one multiple. Commodity chemicals (Dow, LyondellBasell) print volume into ethylene and polyolefins and lost the 2022 price peak: their combined calendar revenue fell from $107.4B in 2022 to $70.1B in 2025 (Financial Modeling Prep quarterly sums). Specialty chemicals and coatings (Sherwin-Williams, PPG, Ecolab, IFF) held combined revenue near $66B across the same years. Construction materials sell crushed stone, sand and gravel, and cement into public and private construction; USGS has crushed-stone output flat at 1.5 billion tons in 2024-2025e while average unit value rose from $15.86 per ton in 2023 to $18.50 in 2025e. Packaging is mid-combination: Smurfit Westrock, International Paper, and Amcor all changed entity in 2024-2025, so 2025 revenue bars are not organic growth. Fertilizer and steel close the roster. USGS raw steel was 82 million tons in 2025e against about 105 million tons of capacity. World Bank DAP averaged $685 per metric ton in 2025, above 2023-2024, after the 2022 spike had already faded.

Industrial gases stay on Hydrogen. Copper and lithium stay on Critical Minerals. The investible question on this page is which of these five P&Ls the cycle is actually in, not whether "materials" as a GICS label is cheap.

Structural drivers

Forces that shape long-run demand and economics. Each driver is sourced.
  • •US chemical production volumes are barely growing. The American Chemistry Council's December 2025 Situation and Outlook tables put total chemical volumes excluding pharmaceuticals at +0.3% in 2024, +0.7% in 2025e, and +0.3% in 2026f. Specialty volumes rebounded +4.3% in 2025e after -1.9% in 2024. Basic chemicals were -0.6% then +0.1%. Volume is not the 2022 earnings story.
  • •ACC puts US chemical shipments at $672B in 2024, $676B in 2025e, and $680B in 2026f (Table 5). Shipments are nominal dollars. They can rise when volumes do not, which is why the volume table and the shipments table have to be read together.
  • •Construction aggregates are a volume-plus-price story. USGS crushed stone sold or used was 1.51, 1.54, 1.55, 1.50, and 1.50 billion tons from 2021 through 2025e. Construction sand and gravel fell from 967 million tons in 2023 to 870 million in 2025e. Average unit value for crushed stone rose from $13.26 per ton in 2021 to $18.50 in 2025e.
  • •US cement production is below apparent consumption in every year of the USGS 2021-2025e window. Production went from 91.0 million tons in 2021 to 84.0 million in 2025e. Apparent consumption stayed near 110 to 114 million tons. Imports close the gap. USGS notes IIJA Federal-Aid Highway authorizations of $55.7B in FY2025 and $56.8B in FY2026, with program funding expiring at the end of FY2026.
  • •US raw steel is an electric-arc-furnace majority industry. USGS: 82 million tons produced in 2025e, combined capacity about 105 million tons per year, 47 companies at 102 minimills, two companies at eight integrated locations. Nucor and Steel Dynamics sit on this page as the large public EAF names. Copper miners do not.
  • •Nitrogen fertilizer is a natural-gas feedstock business. USGS: US ammonia production 13.6 million tons nitrogen content in 2024 and 14.0 million in 2025e, plants at about 80% of rated capacity, 88% of domestic ammonia going to fertilizer. Gulf Coast ammonia averaged $1,070 per short ton in 2022 and $450 in 2025e. CF Industries is the public nitrogen name on the roster.
  • •Phosphate and potash are import-tilted in the United States. USGS phosphate-rock production was about 20 million tons in 2025e with apparent consumption 21 million and net import reliance 16%. US potash production was 500 thousand tons K2O in 2025e against apparent consumption of 5.9 million tons and 92% net import reliance, mostly Canada. Mosaic is the phosphate and potash name. Corteva is seeds and crop protection, not a fertilizer-price beta.
  • •Packaging consolidation is rewriting the 2025 scoreboard. Smurfit Westrock calendar 2025 revenue was $31.18B, International Paper $24.90B, and Amcor $19.61B (FMP four-quarter sums). Those prints include the Smurfit Kappa-WestRock combination, the International Paper-DS Smith combination, and the Amcor-Berry Global combination. They are not like-for-like with 2023.

Structural risks

Forces that could compress demand, change economics, or break the thesis.
  • •Commodity chemical earnings are a spread, not a volume. Dow plus LyondellBasell revenue fell about 35% from 2022 to 2025 while ACC basic-chemical volumes were roughly flat. A volume recovery that does not restore the 2022 olefins spread will not restore those P&Ls.
  • •ACC's own 2026f volume outlook is +0.3% for total chemicals excluding pharmaceuticals, with agricultural chemicals -1.0% and specialties -0.2%. A fourth year of near-zero volume is the base case in the December 2025 tables, not a downside case.
  • •USGS reports that during the first eight months of 2025, total highway construction spending was 25% less than the same period in 2024, even with IIJA authorizations still live. Public-works dollars authorized are not the same as cement and aggregate tonnes poured.
  • •Cement capacity is constrained by idle plants, imports, and emissions rules. USGS: 97 plants in 34 states, 2025 production 84 million tons against 100 million tons of clinker capacity, and NESHAP compliance that can idle kilns. Apparent consumption held near 110 million tons because imports stayed near 23 million tons.
  • •Fertilizer prices can re-spike from gas and trade shocks that this page does not model. World Bank Pink Sheet urea jumped from a 2025 annual average of $423 per ton to $694 in 2026 Q2. The April 2026 Commodity Markets Outlook flagged Hormuz-related urea disruptions. CF and Mosaic earnings will move with that print. Corteva will not, in the same proportion.
  • •Combination accounting can be mistaken for operating leverage. Smurfit Westrock, International Paper, and Amcor 2025 revenue is the new entity. Integration cost, stranded overlap, and working-capital absorption are not in the revenue bar.
  • •CRH 2025 is not plotted on the construction-revenue chart because the FMP fourth-quarter figure ($28.7B) is not a usable quarterly print. Until an issuer 10-K or 20-F confirms 2025, any CRH 2025 comparison on this page would be invented.
  • •Steel utilization is a spread against scrap, not a volume trophy. USGS 2025e production of 82 million tons on 105 million tons of capacity is about 78% utilization. A demand fade that looks small in tonnes can be large in EAF margins.

Competitive landscape

How to think about the players. Framing along axes (pure play vs diversified, incumbent vs challenger, etc). Not stock picking.

Five archetypes, not one sector multiple.

1. Commodity chemicals (Dow, LyondellBasell). Ethylene, polyethylene, and related intermediates. Earnings track the olefins chain and global operating rates. Industrial gases (Linde, Air Products, Air Liquide) are adjacent on Hydrogen, not here.

2. Specialty chemicals and coatings (Ecolab, Sherwin-Williams, PPG, IFF). Water treatment, architectural and industrial coatings, and taste and scent ingredients. Less beta to the ethylene chain, more beta to recoats, industrial production, and consumer packaged goods.

3. Packaging (Ball, Amcor, Avery Dennison, International Paper, Packaging Corporation of America, Smurfit Westrock). Aluminum cans, flexible packaging, labels, and containerboard. Three of the six names changed entity in 2024-2025.

4. Construction materials (CRH, Martin Marietta, Vulcan). Aggregates and cement into highways, private construction, and data-center and manufacturing site work. Local zoning and transport cost make these regional businesses wearing national tickers.

5. Ag inputs and steel (CF Industries, Mosaic, Corteva, Nucor, Steel Dynamics). Nitrogen, phosphate, potash, seeds, crop protection, and EAF steel. Copper, lithium, and rare earths stay on Critical Minerals.

Key metrics to watch

The operational and financial metrics that matter most in this sector. Each one names its source and update cadence.
MetricSourceFrequencyWhy it matters
ACC chemical production volumes, ex-pharmaAmerican Chemistry Council Situation and Outlook tablessemi-annual in the published tables, monthly in ACC's CPRI for membersSeparates volume from price. 2024-2026f is a near-zero volume tape.
ACC US chemical shipmentsACC Situation and Outlook Table 5semi-annualThe dollar size of the US industry. $676B in 2025e is the industry, not the roster.
USGS crushed stone and sand and gravel, tons and unit valueUSGS Mineral Commodity Summaries, Stone (Crushed) and Sand and Gravel (Construction)annual in MCS, quarterly in Mineral Industry SurveysThe volume-plus-price mix that prices Vulcan, Martin Marietta, and the aggregates leg of CRH.
USGS cement production versus apparent consumptionUSGS Mineral Commodity Summaries, Cementannual, with monthly clinker and shipment surveysThe import gap is the domestic capacity story. Production at 84 Mt against consumption at 110 Mt in 2025e is the chart.
USGS raw steel production and capacityUSGS Mineral Commodity Summaries, Iron and Steelannual in MCS, monthly AISI-adjacent prints in other USGS tables82 Mt on 105 Mt of capacity is the utilization starting point for Nucor and Steel Dynamics.
World Bank DAP, urea, and potash pricesWorld Bank Pink Sheet monthly and annual averagesmonthlyThe 2022 spike and the 2025-2026 rebound are what move CF and Mosaic. Corteva is a different P&L.
USGS ammonia production and Gulf Coast priceUSGS Mineral Commodity Summaries, Nitrogen (Fixed), Green Markets price via USGSannual in MCSDomestic nitrogen supply and the gas-linked price that CF Industries lives on.
Issuer quarterly revenue, complete years onlyCompany 10-K and 10-Q via Financial Modeling Prep and SEC companyfactsquarterlyThe only way to compare the 20 names without mixing combination years and missing quarters.

Catalysts and milestones

Known upcoming events that could move the sector. Dated where possible.
  • •ACC mid-year 2026 Situation and Outlook update (tables historically land in June): whether 2026f volume stays at +0.3% or is revised.
  • •USGS Mineral Industry Surveys through 2026: quarterly crushed stone and sand and gravel shipments, and monthly cement clinker, will show whether the 2025e flat tape holds.
  • •IIJA Federal-Aid Highway funding expires at the end of FY2026 (USGS cement and aggregates chapters). A successor bill, or the absence of one, is a 2026-2027 construction-materials event.
  • •World Bank and Green Markets fertilizer prints after the 2026 H1 urea spike. A sustained urea print above the 2025 annual average would rewrite the CF 2026 year. A fade would not.
  • •Issuer 10-K and 20-F filings for FY2025: CRH 2025 confirmed revenue, Nucor missing-quarter 2025, and pro forma packaging combinations.
  • •US EPA action on the 2024 PM NAAQS reconsideration (noted in the USGS cement chapter, March 2025 announcement). Cement kiln utilization is a regulatory variable, not only a demand variable.

What would change the view

Conditions or evidence that would invalidate the thesis or materially shift the risk picture.
  • •ACC total chemical volumes excluding pharmaceuticals running above 3% for a full year would break the 'flat volume, mix and price do the work' framing.
  • •USGS crushed stone and sand and gravel both falling for two consecutive years while unit values also fall would break the aggregates volume-plus-price story.
  • •US cement production closing most of the gap to the 110 million ton consumption print without a demand collapse would mean domestic capacity, not imports, is the swing factor.
  • •A confirmed CRH FY2025 that cannot be reconciled to the 2023-2024 $32-33B run-rate would force a restatement of the construction-materials roster, not a silent chart edit.
  • •World Bank urea and DAP remaining near 2024 averages for four consecutive quarters would make the 2026 H1 spike a shock, not a regime.
  • •A packaging combination being unwound, or a major write-down on Smurfit Westrock, International Paper-DS Smith, or Amcor-Berry, would make the 2025 revenue bars a warning rather than a scale story.
  • •US raw steel production back through 90 million tons on the same 105 million ton capacity base would be a utilization regime this page does not currently assume.

What we are not covering

Sub-areas, technologies, or companies we are deliberately excluding from the analysis, and why.
  • •Industrial gases: Linde, Air Products, and Air Liquide stay on Hydrogen. They sell molecules into refining, chemicals, and electronics, not a blended multiple with Dow.
  • •Copper, lithium, nickel, cobalt, and rare earths: those miners and processors stay on Critical Minerals. Steel is in scope here. Copper is not.
  • •Private chemical and materials companies, and non-S&P 500 public names (Albemarle is on Critical Minerals as lithium). This roster is the S&P 500 coverage gap, not a global chemicals universe.
  • •Company-level custom KPI floors. Deferred on purpose. Financial time series are FMP statements, not four-card KPI pages.
  • •Modeled 2026 roster revenue. If FMP is missing a quarter or a fourth quarter looks like an annual dump, the year is left off the chart.

Sources

Primary sources cited in this analysis. Links open in a new tab.

Audit trail

Record of the last review and what changed. Required on every refresh.
Last reviewed: 2026-08-25
Change log
  • 2026-08-25Replaced the scaffold strategy with sourced copy from USGS MCS 2026, ACC December 2025 tables, World Bank Pink Sheet August 2026, and FMP quarterly sums for the locked 20-name roster. CRH 2025 and incomplete Nucor years are called out as gaps rather than filled.
Unresolved questions
  • •What is issuer-confirmed CRH FY2025 revenue, and why does FMP Q4 2025 print $28.7B?
  • •What is Nucor Q1 2025 revenue so calendar 2025 can be completed?
  • •What are the issuer-stated pro forma 2024 revenues for Smurfit Westrock, International Paper-DS Smith, and Amcor-Berry so 2025 can be read as organic plus mix?
  • •Will ACC's mid-year 2026 tables revise 2026f volumes away from +0.3%?
  • •Does the IIJA highway authorization get a successor before FY2026 ends, and do USGS quarterly aggregate shipments already show the 25% highway-spend fade?
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Chemicals and Materials Strategy: Market Data | Sterling