What if Cheap LNG and gas reignite global petrochemical capacity glut?
Abundant cheap gas and naphtha-displacing ethane feedstock spur a global petrochemical capacity wave that gluts ethylene and polymers, pressuring chemical margins even as it lifts gas demand.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a mixed shock. Abundant cheap gas and naphtha-displacing ethane feedstock spur a global petrochemical capacity wave that gluts ethylene and polymers, pressuring chemical margins even as it lifts gas demand. The trigger decomposes into signed root‑shocks — Natural gas ▲ · Industrial demand ▲ · Inflation expectations ▼ · Risk appetite ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Freeport (copper) FCX 📈 chart | Equity | ▲ +0.3% hist -1.71–+3.06% · other way +3.75% (n=9) |
| 2 | Natural gas NGon Hyperliquid 📈 chart | Commodity | ▲ +0.2% hist -1.25–+2.07% · other way -4.85% (n=9) |
| 3 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▲ +0.1% hist -1.25–+2.11% · other way -2.85% (n=9) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -1bp hist -6.26–+13.45% · other way +10.3% (n=12) |
| 5 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -1bp hist -8.41–+14.05% · other way +3.6% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 17 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| High-yield credit HYG | SHORT | -0.4% · 5d +0.1% ↺ fades | 68% | 13 | 0.24 | · |
| US dollar DXY | LONG | +0.6% · 5d -0.2% ↺ fades | 64% | 17 | 0.23 | · |
| 30y yield DGS30 | LONG | +13bp · 5d +6bp | 64% | 17 | 0.22 | ⚠ differs |
| Volatility VIX | SHORT | -5.0% · 5d -3.4% | 65% | 16 | 0.21 | · |
| 10y yield DGS10 | LONG | +15bp · 5d +7bp | 56% | 17 | 0.09 | ⚠ differs |
| XCU XCU | LONG | +2.1% · 5d -0.6% ↺ fades | 53% | 15 | 0.06 | ✓ matches cascade |
| Gold XAU | SHORT | -0.9% · 5d -0.8% | 53% | 15 | 0.06 | · |
| FCX FCX | LONG | +2.9% · 5d +-0.0% ↺ fades | 53% | 15 | 0.05 | ✓ matches cascade |
| NG NG | LONG | +2.0% · 5d +0.6% | 50% | 15 | 0.00 | ✓ matches cascade |
| Bitcoin BTC | LONG | +5.1% · 5d -3.3% ↺ fades | 45% | 9 | 0.00 | · |