Hexene Prices Set to Surge In US, Flat and Stable in Europe and Asia as June Arrives

Texas (USA): Hexene prices are set to surge in the US after NOAA gave a higher-than-normal frequency of hurricanes for the season in the US Gulf, bolstered further by low inflation data recorded in April 2024. The PE markets are set for a flat to marginally bullish forecast for June as supply is expected to be tightened and demand is partially expected to stabilize in the given timeframe. European markets have remained flat for Hexene sales, largely from the Middle East and the US. NE Asia Hexene demand is expected to remain flat amidst overcapacities and weak ethylene prices in Asia due to subdued demand sentiment.

Hexene prices in the US remained elevated on a month-on-month basis for assessment done around 2nd June by ChemAnalyst by 2 to 3%. The increment in Hexene prices for the past two months has been attributed to strong price pressure and the increment in carbon premiums being pushed into PE and Hexene markets. ChemAnalyst’s research on carbon prices and Hexene prices for the US revealed that the hike in carbon prices turned up by 8% for the past two months, adding heavily to ethylene as well as Hexene and downstream PE markets.

Downstream HDPE prices plateaued in the US with prices observed around FOB Texas blowmolding grade of USD 1235/MT for the past six weeks as sellers remained adamant to hold on to their prices. Two market participants separately in an inquiry revealed that carbon prices are being added by suppliers across the supply chain to keep up with the sustainability mandate despite demand for HDPE and LLDPE in the end-use markets remaining marginally weaker in the US. Especially from construction as well as automotive. Hexene-derived HDPE demand in the US slowed down in May 2024 further owing to high stocks rolled over from April. Hexene prices in the US markets have achieved pre-pandemic levels of price levels after capacity additions observed in the previous year.

Strategically, overall production and utilization for Hexene remained lower than 60%, assessment revealed, with big major plants remaining off-line for most of the second half of 2023. Upstream NGL and Natural Gas price assessments revealed that US prices have deflated by 7% YoY basis for June, while for Asian and European markets, 22% upward movement in prices were recorded, which is further expected to hurt domestic Hexene supply.

Hexene prices for Germany FD basis are expected to record a modest rise of 2-3% overall for June, due to high supply costs as freight charges from the Middle East, US-East coast to Europe remain elevated, reaching January highs. Domestic HDPE and LLDPE capacities of Europe are expected to observe higher downturns. This is despite assessment showing demand is expected to improve. Ethylene and cracking operations are expected to remain down in Europe due to the Dutch TTF hitting USD 10.00/MMBtu supply of gas, making Europe dependent on raw materials like Hexene and meeting significant portions of HDPE and LLDPE demand through imports.

Asian and NE Asian PE demand is expected to remain flat with prices revised upwards as Naphtha contracts for the third quarter and the latter half of the second quarter have remained higher than previous deliveries. Korean Hexene demand has remained flat for the past two months with major fluctuations in spot prices partially owing to frequent supply disruptions from the US to Asia and an increment in domestic production which forced a surge in price rise. Downstream HDPE prices have remained elevated due to forward buying contracts due to the geopolitical situation developing in the Middle East for feedstock supply and freights moving from the Pacific to the Atlantic.