You learn alchemy at level 7. Level 5 for spellcrafters. It's the art of dissecting stuff from animals, (and you thought that was biology! Nope, alchemy!) and the brewing of inks, chalks, oils and potions.
Okay, a brief bit about dissect. For dissect you need a knife in your inventory and a corpse on the ground of the race you need a bodypart of. You also need 5sp. Type 'dissect corpse' to hack it up. This will violate claims, so watch you don't hack up someone else's stuff. When you have the bodypart, the corpse is still available for everything you might need a corpse for - feeding shadowspawn, draining, eating, skinning/gutting/carving/plucking, birthdays, bar-mitzvahs, etc. So, that's nice. Dissecting works on alchemy, and will increase your alchemy, so if you don't care to raise the ability it will raise itself pretty nicely just by running an amateur biology lesson on everything you come across.
To brew things, you'll need a fire (nope, an anvil won't do it). For everything but chalks, you'll also need an empty drink container. Try the 'ficer shop, or Drudge's beer bottles.
You can brew coloured inks, which are required to make the more powerful scrolls. You can buy black ink from the shop, but you can also learn the formula in the Library of Artifice and make it, which is a VERY good way of raising your alchemy ability.
Inks require an empty bottle, and 5 sp. They don't take any concentration, and they're weightless when made so you can stock up on a lot for scroll madness.
Chalks are required for runes. The more colourful chalks are needed for more exotic runes. They're weightless when in chalk form and require no concentration, so stock up. It's an alright way to raise alchemy ability. All chalks require limestone. It costs 5sp to brew a chalk, and you don't need a bottle (you may still need a heat source). You can learn white chalk in the Library of Artifice, but you can also just buy chalk a few rooms away, so, you know. YOU know. Yeah.
Oils are essential for spellforged weapons, enchanted amulets, rings and wands, and doubly essential for constructs. Good thing you can learn them all at the Library of Artifice then! They require no concentration, take 5 sp to brew, and are weightless. A skill you will learn as a 'ficer is how to farm all the stuff you need for these oils, since you will be using them a lot.
Potions do a bunch of cool things, like you can make shanni potion doubles, stat boosters, throwable potion bombs, even potions to give you a good night's sleep. For a full list check out here. You need 25sp to brew a potion, and they take concentration. 2 for neutrals, 4 for smithcrafters, and none for spellcrafters. That means as a spellcrafter you can stock up on a lot of these pretty easily. Nice!