1-Hexene Prices Stabilizes in Europe in August 2024, Bullish Outlook Anticipated

1-Hexene prices extends its price stability during the third week of August 2024 in the European market, while in the last assessment by ChemAnalyst, prices increased by USD 30/MT or 1.4% during the week ending on 16^th August 2024, cumulatively over two weeks. The three weeks cumulatively price rise remained modest of 1.4%. The price rise has been attributed to higher cost of ethylene. Ethylene prices surged by 2.2% over the four week period. In the latest round of assessment, the prices of 1-Hexene were forecasted for bullish momentum in Europe amidst higher cost transfers down the value chain and increased supply constraints as Chinese exports from Europe eases in the downstream plastics section as China moves towards further self-sufficiency.

1-Hexene prices in Germany, assessed by ChemAnalyst showed upward movement of USD 20/MT after speculative demand continues to rise in Germany due to explosion recorded at BASF site at the end of the previous month. BASF is one of the largest producers of 1-Hexene in the European market, revealed a market player, and such an accident has led to higher frequency of queries by the downstream participants for more supply. The accident triggered bullishness in the upstream ethylene prices almost immediately with CFR Hamburg Ethylene prices surged up by 2% in the beginning of the month. In the downstream 1-Hexene market, the prices remained bullish as volume recoveries amidst lowering of mortgages and inflationary pressure across European markets allowed for higher consumption of LLDPE and HDPE. The revival was largely due to consumer spending, revealed a market participant. In the spot markets, LLDPE prices were recorded at €1165-1175/mt FD Northwest Europe, reflecting an increase of €20/mt from the previous week.

In the contract markets, LLDPE grade prices remained stable at €1600-1605/mt FD NWE Germany and FD NWE France, showing no change from the prior week. Since the downstream price pressure and price support remained positive, 1-Hexene suppliers continue to keep their prices bullish in European markets. Saudi as well as Korean 1-Hexene deliveries remained elevated due to higher freight costs and LNG prices across to NE Asian markets. The cost pressures on import prices remained a major challenge for European supplies. However, Shell chemicals and Shell’s Q2 reports revealed that higher LPG conversion to cracker products and relatively higher operating rates in Europe has kept the prices relatively lower than gas based imports, revealed ChemAnalyst’s Analysis. One of the major drivers of 1-Hexene prices up has been resilient consumer demand as mortgages and other interest rates have been revising downwards in Europe.

1-Hexene prices in Europe have been forecasted for bullishness in September as active trade season and pre-fall stocking in Europe will begin. This will lead to additional surcharges and further rise in consumption in Europe of LLDPE and HPDE derived out of 1-Hexene will keep the prices upwards.