Hexene Prices Rise in US, Asia and Europe Saw bearishness in the latter half of September 2024

The global Hexene market exhibited mixed trends in the latter half of September, with firm pricing in the United States, contrasted by declines in Europe and Asia. These shifts were driven by varying regional factors, including supply disruptions, seasonal demand fluctuations, and logistical challenges.

Hexene prices in the U.S. remained firm throughout late September, primarily due to production constraints caused by a series of hurricanes that disrupted supply chains along the U.S. Gulf Coast (USGC) and Louisiana. Hurricane Francine, followed closely by Hurricane Helene, resulted in a 30% reduction in the supply of key petrochemicals, including Hexene and its precursor, Ethylene. This supply shortfall coincided with increased stocking activities by U.S. suppliers, who sought to buffer inventories ahead of the impending economic uncertainties associated with the upcoming presidential elections.

The recent 50 basis point rate cut by the U.S. Federal Reserve, while anticipated to influence broader market sentiment, has yet to significantly impact the petrochemical sector, as the immediate effects of monetary policy changes are still materializing. Meanwhile, U.S. Gulf Coast facilities have struggled to recover from weather-related disruptions, with no significant new Hexene orders placed during this period. The ongoing labor strikes in key U.S. ports have further compounded supply chain challenges, leading to prolonged delivery lead times and increased shipping costs for U.S.-bound shipments.

In the Asia-Pacific (APAC) region, Hexene prices weakened as major markets, particularly in Northeast Asia, saw reduced activity due to the autumn festival season. This period of lower production and reduced working hours contributed to a temporary decline in demand for Hexene and its derivatives, such as Linear Low-Density Polyethylene (LLDPE) and High-Density Polyethylene (HDPE). Consequently, supply chains in this region operated at reduced capacities, with Hexene prices in the Middle East, a key supplier to APAC, dropping by $10/MT during the same period.

Additionally, the diversion of shipping routes towards Indian and Saudi Arabian destinations, owing to lower freight costs on the Northern Europe-Asia route, further influenced pricing trends. In India, subdued demand for HDPE and LLDPE persisted, contrary to the historical upliftment trends typically observed in September, as per ChemAnalyst's analysis. This has led to an overstocked situation for LLDPE/HDPE resins in Saudi Arabia, pressuring regional Hexene prices downwards.

Europe experienced a distinct decline in Hexene prices due to sluggish demand across both inland and overseas markets for Hexene-derived products. Lower purchasing activity, particularly in polyethylene (PE) sectors, coupled with reduced freight charges along key trade routes, contributed to a USD 10/MT drop in Hexene prices. The Northern Europe-Asia freight rates were revised downward by 4% weekly, adding to the bearish sentiment.

The broader logistics landscape has also played a pivotal role in shaping Hexene market dynamics. In Europe, shipping disruptions due to strikes at East Coast ports have complicated Hexene spot orders, leading to a decline in U.S.-Europe bound shipments. This has resulted in a fragmented supply chain, with European producers facing feedstock shortages and increased dependency on imports.

Looking ahead, the Hexene market is expected to remain volatile, with U.S. prices likely to experience downward pressure as production normalizes and stock levels adjust. However, the impact of prolonged labor strikes and potential logistical bottlenecks could create short-term price fluctuations.

In the APAC region, demand is anticipated to recover post-autumn festivities, which could provide some support to prices. Meanwhile, European markets are likely to continue facing headwinds from subdued downstream activity and persistent supply chain disruptions, with recovery hinging on improved demand fundamentals and logistical stability.

Overall, the global Hexene market remains in a state of flux, with regional disparities shaping the short-term outlook. Stakeholders will need to closely monitor geopolitical developments, supply chain conditions, and macroeconomic trends to navigate the evolving market landscape effectively.