The geopolitical conflict in the Strait of Hormuz continues to escalate, with Goldman Sachs' latest warning indicating that approximately one-fifth of the global chemical supply has been disrupted. While the exact timing of the events is unclear, they have already severely hampered naphtha and crude oil imports in the Asia-Pacific region, significantly reducing the operating rate of petrochemical plants and directly impacting the delivery stability of basic chemicals such as upstream raw materials for amino acids, solvents, and organic intermediates. Chemical trading, raw material procurement, fine processing, and export-oriented manufacturing companies need to pay close attention to the risks of delivery delays, inventory pressure, and cost fluctuations.

Event Overview

Goldman Sachs issued a new warning, pointing out that due to the escalation of geopolitical conflicts in the Strait of Hormuz, about 20% of the global chemical supply has been disrupted; the Asia-Pacific region relies on imports of 70% of naphtha and crude oil from the Middle East, and the current average operating rate of petrochemical plants has dropped to 50-60%, with inventories generally at rock bottom; physical feedstock supply will begin to ease as early as late May, but it will take 45 days to restart cracking units, and the full recovery of overall delivery capacity is expected to be delayed until the third quarter of 2026.

Which sub-sectors will be affected?

Direct trading enterprises

Due to the disruption of shipping routes through the Middle East, foreign trade enterprises that use China as a distribution center and export basic chemical products (such as upstream raw materials for glycine/methionine, solvents for acetone/butanone, and intermediates for benzene/alkanolamines) to Europe, the United States, and Southeast Asia are facing problems such as shipping delays, increased uncertainty in documentation, and heightened risks in fulfilling letters of credit. The impact is mainly reflected in longer order confirmation cycles, slower customs clearance of goods in transit, and increased difficulty in coordinating third-party logistics.

Raw material procurement companies

Downstream companies in the formulation, coating, adhesive, and electronic chemical industries that rely on imported naphtha derivatives or raw materials directly supplied from the Middle East have had their procurement plans disrupted. The main impacts are a significant increase in spot purchase premiums, a decrease in long-term contract fulfillment rates, and an extension of the verification period for the compatibility of alternative raw materials.

Processing and manufacturing enterprises

Fine chemical manufacturing enterprises that start with imported intermediates for compounding, synthesis or refining are facing tight supply of key components (such as ethylene and downstream propylene derivatives) due to the low-load operation of upstream cracking units. The impact is mainly reflected in frequent adjustments to production line schedules, accelerated depletion of safety stock, and increased difficulty in batch consistency control.

Supply chain service companies

Third-party supply chain service providers offering customs clearance, warehousing, multimodal transport, and VMI management need to cope with situations such as customers temporarily changing logistics routes (e.g., switching to China-Europe freight trains or transiting through Southeast Asia), a surge in urgent warehouse relocation needs, and pressure on bonded warehouse turnover rates. The main impacts are narrowing service response windows, increasing complexity of single-ticket operations, and increased pressure on systemic collaboration.

What key areas should relevant businesses or practitioners focus on, and how should they respond at present?

Focus on changes in actual delivery capabilities for key product categories and critical milestones.

At present, it is more important to pay attention to the arrival data and port inventory dynamics of core raw materials for cracking routes such as naphtha, liquefied petroleum gas (LPG), styrene, and acrylates, rather than just tracking geopolitical news. It is recommended to connect with customs and shipping companies at major ports to obtain weekly loading and unloading volume information, and prioritize assessing the redundancy of unloading capacity at major ports in East and South China.

Distinguishing between policy signals and the actual pace of business implementation

Analysis suggests that official statements regarding energy supply security or alternative transportation channels are mostly medium- to long-term in nature, while current operational indicators such as actual plant operating rates, cracking unit maintenance status, and available tank capacity better reflect short-term delivery capabilities. It is recommended to simultaneously track the monthly production reports of major refining and chemical enterprises such as Sinopec and PetroChina, rather than relying solely on interpretations of macroeconomic policies.

Initiate technical adaptation and business contingency plans for alternative solutions in advance.

From an industry perspective, some solvents and intermediates can be supplemented in stages by the production capacity in Northeast Asia (Japan and South Korea) or Southeast Asia (Singapore and Thailand), but attention should be paid to specification differences and registration compliance. It is recommended to sort out the list of replaceable materials in the existing BOM, complete small-scale test certification in conjunction with the technical department, and sign framework agreements with alternative suppliers to lock in the production capacity window.

Strengthen delivery communication mechanisms with overseas buyers

Observations show that overseas customers' acceptance of delayed delivery is rapidly diverging: European and American end customers are more inclined to accept phased delivery starting in Q3 and adjust payment schedules, while Southeast Asian distributors generally require proof of alternative sources of goods or compensation for air freight costs; it is recommended to develop communication scripts and supporting materials according to customer type to avoid trust loss caused by uniform templates.

Editor's Viewpoint / Industry Observation

This event should be understood as a structural supply disruption rather than a short-term logistical interruption. Analysis shows that its depth of impact depends on the dual variables of the restart progress of cracking units and the efficiency of customs clearance for imported alternative raw materials, rather than simply the intensity of the conflict. Observably, it has evolved from a geopolitical risk signal into an actual delivery constraint, but has not yet constituted a systemic supply disruption. From an industry perspective, this shock highlights the high path dependence of the Asia-Pacific chemical supply chain on a single sea route. Whether it will trigger regional capacity reallocation or the establishment of localized reserve mechanisms warrants continued monitoring.

In conclusion, the core industry significance of this event lies in revealing the real gap between the resilience of basic chemical raw material supply and the certainty of delivery. It is not an isolated geopolitical episode, but a real stress test of companies' supply chain resilience, technological substitution capabilities, and cross-market coordination levels. It is more accurately understood as a mid-term reset of delivery capabilities than a short-term fluctuation. A rational response requires data monitoring, tiered communication, and pragmatic substitution, rather than waiting for the external environment to naturally recover.

Information Source Notes: The main information comes from Goldman Sachs' "Global Chemical Supply Disruption Alert" (Month X, 2024). The article does not specify the time of the event, but the relevant data on capacity load, inventory status, and recovery cycle are all cited from the report. The timeline of 45 days required to restart the cracking unit and full recovery to the third quarter of 2026 are clearly stated in the report. The parts that need to be continuously monitored include the actual recovery progress of shipping in the Middle East, changes in import clearance time at major ports in the Asia-Pacific region, and the scale of import clearance for alternative raw materials.