Even with tariffs on the horizon, nearly six in ten specialty chemical suppliers aren’t padding inventories, Society of Chemical Manufacturers and Affiliates (SOCMA) found in its April survey. One-third (33%) of companies have taken action to frontload inventory; this includes 26% adding one to three months’ supply and 7% stockpiling four months or more.
The unanswered questions regarding chemicals supplies are having an impact on R&D timelines. A total of 44% are feeling strain from tariffs on innovation, and nearly one-third report tariffs are already causing delays in R&D, scale-up, or new product introductions (See Page 6 of the April SOCMA report). Rising raw-material costs and lengthening lead times trail close behind as the next big pain points, underscoring how tariff policy can ripple well beyond the loading dock and straight into experiment schedules.
Full results from SOCMA.
This pressure is also hitting bottom lines, too, but not uniformly. The SOCMA poll reveals a split in how companies are handling rising expenses. While 37% successfully pass most (76-100%) cost increases to customers via specialized offerings or strong market positions, many others lack that pricing power. A substantial portion of firms are absorbing significant cost hits internally owing to competitive pressures or customer resistance. A total of 8% are absorbing all costs while a broader swath, 25%, is absorbing between 1 and 25% of the price increases.
Outside of the chemistry industry, recent months have seen a string of announcements about investments, including Apple, TSNC, Hyundai, ABB, Toyota, and Bristol Myers Squibb. The SOCMA poll reveals a similar growing interest in North American chemical suppliers. Some 36% of respondents reported an increase in customer inquiries from foreign markets, especially notable from the European Union, India, and China. Additional activity is noted from Canada, Japan, Korea, and elsewhere in Asia.
