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The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products. The plastics industry contains some overlap, as some chemical companies produce plastics as well as chemicals.

Basic chemicals, or "commodity chemicals" are a broad chemical category including polymers, bulk petrochemicals and intermediates, other derivatives and basic industrials, inorganic chemicals, and fertilizers. Polymers are the largest revenue segment and includes all categories of plastics and man-made fibers. The major markets for plastics are packaging, followed by home construction, containers, appliances, pipe, transportation, toys, and games. Petrochemicals and intermediate chemicals are primarily made from liquefied petroleum gas (LPG), natural gas and crude oil fractions. Large volume products include ethylene, propylene, benzene, toluene, xylenes, methanol, vinyl chloride monomer (VCM), styrene, butadiene, and ethylene oxide. These basic or commodity chemicals are the starting materials used to manufacture many polymers and other more complex organic chemicals particularly those that are made for use in the specialty chemicals category. Other derivatives and basic industrials include synthetic rubber, surfactants, dyes and pigments, turpentine, resins, carbon black, explosives, and rubber products and contribute about 20 percent of the basic chemicals' external sales. Inorganic chemicals (about 12% of the revenue output) make up the oldest of the chemical categories. Products include salt, chlorine, caustic soda, soda ash, acids (such as nitric acid, phosphoric acid, and sulfuric acid), titanium dioxide, and hydrogen peroxide. Fertilizers are the smallest category (about 6 percent) and include phosphates, ammonia, and potash chemicals.

The chemical industry involves the use of chemical processes such as chemical reactions and refining methods to produce a wide variety of solid, liquid, and gaseous materials. Most of these products serve to manufacture other items, although a smaller number go directly to consumers. Solvents, pesticides, lye, washing soda, and portland cement provide a few examples of product used by consumers. The industry includes manufacturers of inorganic- and organic-industrial chemicals, ceramic products, petrochemicals, agrochemicals, polymers and rubber (elastomers), oleochemicals (oils, fats, and waxes), explosives, fragrances and flavors. Chemical processes such as chemical reactions operate in chemical plants to form new substances in various types of reaction vessels. In many cases the reactions take place in special corrosion-resistant equipment at elevated temperatures and pressures with the use of catalysts. The products of these reactions are separated using a variety of techniques including distillation especially fractional distillation, precipitation, crystallization, adsorption, filtration, sublimation, and drying. The processes and product or products are usually tested during and after manufacture by dedicated instruments and on-site quality control laboratories to ensure safe operation and to assure that the product will meet required specifications. he petrochemical and commodity chemical manufacturing units are on the whole single product continuous processing plants. Not all petrochemical or commodity chemical materials are made in one single location, but groups of related materials often are to induce industrial symbiosis as well as material, energy and utility efficiency and other economies of scale.

Those chemicals made on the largest of scales are made in a few manufacturing locations around the world, for example in Texas and Louisiana along the Gulf Coast of the United States, on Teesside (United Kingdom), and in Rotterdam in the Netherlands. The large scale manufacturing locations often have clusters of manufacturing units that share utilities and large scale infrastructure such as power stations, port facilities, road and rail terminals. To demonstrate the clustering and integration mentioned above, some 50% of the United Kingdom's petrochemical and commodity chemicals are produced by the Northeast of England Process Industry Cluster on Teesside.