Goldman Sachs warns that the chemical industry faces an unprecedented supply crisis originating from the Strait of Hormuz, with Asia-Pacific bearing the brunt. Basic chemical prices have surged over 60% in recent weeks, the fastest pace on record, and about 20% of global chemical supply is already disrupted. For overseas buyers, this means severe cost pressures and supply chain delays that may persist into 2027, even under the most optimistic scenarios.
Supply-chain impact
Goldman Sachs reports that the price surge for basic chemicals is twice as fast and severe as the 2022 European energy crisis. The disruption directly hits petroleum and naphtha, which together account for about 70% of petrochemical production costs, versus natural gas's 10-15% in the 2022 crisis. About 20% of global chemical supply is now interrupted, with no quick recovery expected.
Asia-Pacific as the epicenter
Asia-Pacific is the hardest-hit region because it relies on the Middle East for about 70% of its chemical feedstock, compared to Europe's 20%. The region accounts for roughly 65% of global chemical production and 51% of manufacturing value added. Many Asian petrochemical plants have already reduced operating rates to 50-60%, and some face shutdown risks as inventories dwindle.
What buyers should watch
Cost impacts vary by sector. Goldman Sachs estimates an average 11% increase in cost of goods sold for US and European companies, with furniture (20%), medical aesthetics (18%), and apparel (15%) hit hardest. Automotive and consumer electronics face 11% and 7% rises respectively. Peak price pressure for end consumers is expected in Q3 or Q4 2026, with a 6-12 month lag.
Compliance and logistics signals
Even if the Iran-US conflict ends immediately, chemical supply normalization may take until 2027. Dow Chemical estimates 250-275 days for full recovery. The Strait of Hormuz shipping backlog prioritizes oil, fuel, and fertilizers over chemicals, creating a "double queue." European and Asian supply relief is unlikely before Q3 2026, with further price increases and demand contraction expected.
China sourcing context
Asia's short supply chains mean that US and European buyers, who typically use quarterly or annual pricing contracts, will feel peak cost impacts later—in H2 2026. Goldman Sachs warns that investors and buyers have not yet fully priced in the depth and breadth of this shock, urging immediate reassessment of exposure to consumer goods, manufacturing, chemicals, and related supply chains.
Source: Read the original report | Published: April 28, 2026