Texas (USA): 1-Hexene prices turned bullish globally in February 2024 as supply issues in the Red Sea continued to disrupt trade volumes worldwide. The acceleration in prices was also driven by improved demand in certain regions of Asia, Europe, and the Americas. The month also witnessed upward price revisions for ethane, subsequently affecting downstream ethylene prices, by Middle Eastern and Asian suppliers. East Asian markets remained inactive for a week due to Spring festivities, leading to strong bullish trends in 1-Hexene prices in the early part of the month, partially offset by lower trading activities in the middle of the month.

In the US markets, 1-Hexene prices stabilized by the end of February 2024 owing to a pickup in demand from the domestic market. Forward-looking statements from INEOS Oligomers suggest that price recovery in 1-Hexene is improving in tandem with domestic demand in the US, partially due to the country's independence from OPEC supplies and largely due to increasing consumer demand as fiscal year 2024 is expected to observe three rate cuts from the US Federal Reserve. Exports to the EU and South America showed reduced volumes of 1-Hexene, while there was an uptick in export volumes of LLDPE and HDPE due to rising demand for manufacturing and construction end-uses. Market players revealed that domestic tightening of 1-Hexene supply is being undertaken in anticipation of rising downstream order books and strong consumer sentiment, as interest rate cuts are expected in the second half of fiscal year 2024. Operational capacity utilization of PE and 1-Hexene suppliers is expected to increase further in March as the rush to generate additional inventory demand by the end of the first quarter.

Regarding price levels, ChemAnalyst’s researchers concluded that prices remain 22% subdued compared to fiscal year 2023 on a year-on-year basis, while there was a 4% month-on-month elevation in prices. Recovery in 1-Hexene prices on a month-on-month basis suggests that with US demand largely surpassing major economic blocs like the EU and China's recovery, 1-Hexene prices are expected to recover in the coming months, with a forecast of a bullish trend due to domestic market tightening. Moreover, spread margins remained comfortable in the second half of fiscal year 2023 for 1-Hexene despite weak domestic market conditions, as raw material prices depreciated faster than product prices.

In European markets, 1-Hexene prices remained largely stable in February, with spread margins remaining lower than January 2024 and lower materials affecting the production value chain. Overall, European markets remained challenging for 1-Hexene and HEC suppliers, largely due to subdued German demand partially offset by uptake in the Netherlands, Italy, and France. European 1-Hexene prices have recovered by 13% on a year-on-year basis and 2% on a month-on-month basis. Price movements for 1-Hexene in Germany currently reflect US market trends, as the US remains a major supplier of 1-Hexene. With supply tightening due to the Suez Crisis and US stocking up for fiscal year 2024, suppliers have held onto their prices in February, with price revisions expected in the coming months. ChemAnalyst’s forecast for 1-Hexene prices FD Hamburg for Europe remains bullish for the next three months owing to improved demand, with input prices for PE industries, especially INEOS and Lyondellbasell, at lower cracker volumes as construction, automobile, and consumer spending pick up as inflation falls and EU sustainability transition plans proceed further.

Overall, market sentiments remain bullish for 1-Hexene in the next three months as US and other global suppliers tighten 1-Hexene supply to cater to the domestic market, with the EU increasing cracker utilization to match demand sentiments for the second quarter of fiscal year 2024.