The global chemical supply chain is facing unprecedented disruption. Tim Doggett, CEO of the Chemical Business Association (CBA), reflects on the current state of the sector.
The global chemical supply chain is under sustained pressure from multiple directions, and while it has weathered similar storms before, particularly during the pandemic and following Russia’s invasion of Ukraine, many of the vulnerabilities exposed during those crises remain unresolved.
The conflict in the Middle East has brought this into sharp focus. The region is not only a major production hub, but a critical transit corridor and energy centre. Disruption there moves quickly through global supply chains, affecting availability, pricing and reliability.
That impact is being felt across the chemical supply chain. While functional, it is under increasing strain and edging uncomfortably close to a full-blown crisis.
A system under pressure
While the escalating and fluctuating cost of oil dominates the headlines in terms of energy costs, the reality is that other, less reported factors – especially disruption to global shipping – are now causing equally significant, and in some cases greater pressure across the chemical supply chain.
Crucially, security of supply has become just as important as cost, because ultimately, price becomes irrelevant if material cannot be accessed at all.
At the same time, market behaviour is shifting. Traditional pricing structures are giving way to shorter-term arrangements, with pricing being withdrawn altogether due to volatility and the growing use of force majeure, in some cases. As availability tightens, some markets are beginning to move from buyer-led to seller-led dynamics, with some countries withdrawing export licences to protect domestic supply.
UK vulnerabilities exposed
While these pressures are global, the UK is particularly exposed. The UK chemical supply chain is heavily reliant on imports, meaning global disruption is quickly reflected in domestic pricing and availability, even where direct sourcing from affected regions is limited.
This is the result of longer-term structural challenges. Over several years, the sector has faced inconsistent policy focus, ongoing regulatory uncertainty – particularly around UK REACH – and declining domestic investment, all of which has accelerated the erosion of domestic capacity.
This has been compounded by a persistent lack of strategic recognition – despite its designation as Critical National Infrastructure (CNI) and its foundational role across manufacturing and the wider economy, the chemical sector was omitted from the UK’s Modern Industrial Strategy last year.
It has also been impacted by political and policy instability. Frequent changes in direction, delayed decision-making and a lack of strategic alignment across Government have created ongoing uncertainty. Among CBA members, around 80% report negative impacts from the current Government’s actions and decisions, while more than 96% highlight a lack of clarity in future policy direction.
Business conditions
Behind these pressures are businesses working hard to navigate increasingly difficult conditions. SMEs, which make up a significant proportion and are indeed the backbone of the UK chemical supply chain, are disproportionately affected. They are dealing with rising costs, subdued demand, international competition and growing regulatory complexity, often without the capacity to absorb prolonged and widespread disruption across multiple business fronts. According to the CBA’s latest quarterly trends survey, many are working hard simply to stand still.
Demand patterns are also becoming less predictable, with fluctuations across different sectors. At the same time, customers are resisting price increases despite rising costs, intensifying pressure on margins. Stockpiling and forward purchasing are also becoming more common as businesses try to manage risk and maintain supply continuity.
Priorities for the sector
If there is one clear lesson from the current situation, it is that resilience cannot be reactive – it must be a constant strategic priority. This is not just an economic issue, but one of national security. And that starts with recognition. As a CNI sector and foundational enabler of the entire economy, the importance of chemicals – and logistics – must be fully reflected in policy and decision-making.
Clarity and stability in the policy environment are equally important. Ongoing uncertainty, particularly around UK REACH, continues to hold back investment and long-term planning. Businesses need a coherent and consistent framework that allows them to operate with confidence.
There is also a need to strengthen domestic capability. The UK’s reliance on imports increases exposure to global shocks, and improving resilience will require a renewed focus on domestic production and supply chain infrastructure.
Consistency in an uncertain world
The pressures facing the global chemical supply chain are not short-term. They reflect a more complex and less predictable operating environment that is here to stay. This means that the need for consistent representation and practical support is greater than ever.
The CBA plays a vital role in providing this consistency. Amid ongoing disruption, it will continue to support its members and the wider chemical industry while working with Government to ensure that this critical sector is recognised, valued and protected.
