Texas (USA): Recently, LyondellBasell released its Q4 results, noting a robust recovery in the Olefins market in the USA, while marginal improvements were observed in the European and Asian markets during Q4. Peter Vanacker, CEO of LyondellBasell, anticipates earnings and price recovery in 2024. Hexene prices are expected to rebound globally in FY24, but variations in distribution may occur across continents due to supply challenges.

In North American markets, LyondellBasell saw improvements in Hexene and polyethylene earnings, driven by increased volume and exports, partially offset by lower margins. Operating margins in the Hexene markets in the US remained higher than in Europe and Asia, with a utilization rate of 85%. LyondellBasell observed an advantageous oil-to-gas ratio in the feedstock market, while downstream ethylene and Hexene markets faced a significant decline in margins. Q4 witnessed lower feedstock pricing amid overall reduced demand globally. American markets increased their Hexene market share globally due to lower pricing amid declining margins while gaining export volumes. Market experts argue that demand is largely driven by increased wages amid a tightening labor market, coupled with expansion in the service sectors. The US continued to balance the reduction in OPEC+ output by increasing domestic output, averaging 13 million bbl/day, keeping crude and gas prices stable and bearish, providing positive margin pressures in the American supply chain. Hexene markets showed improvement due to the automobile vertical, coupled with specialty chemicals pulling up Hexene markets. Mortgage rates in the US continued to fall since October 2023, allowing consumers to increase spending on goods.

In Asian and European markets, LyondellBasell faced relatively higher Hexene prices, mainly due to higher feedstock naphtha prices and variable pricing amid rising uncertainty since December due to the Suez crisis. Chinese demand remained subdued, largely owing to a weak construction sector, while European markets showed marginal recovery, especially in Italian and Dutch markets. UK markets also showed an uptick in Hexene/ethylene copolymers due to sustainability transition. Hexene markets incurred losses in European markets, largely owing to depressed consumption and an overall slowdown in the construction market. LNG prices remained subdued during the given timeframe amid strong inventories of gas, partially offset by the loss in demand. Chinese demand for Hexene remained weaker, largely owing to reduced consumption. Indian markets showed stable demand for Hexene in the region, while overall Asia Pacific and European demand are expected to remain subdued.

For Q1 FY24, Hexene prices are anticipated to remain subdued globally, largely owing to seasonal demand and lower feedstock prices due to oversupply of ethylene and polyethylene in the markets because of new Chinese capacities coming online. Demand for Hexene/ethylene copolymers is expected to recover in the second quarter as demand is expected to rise, largely owing to anticipation of rate cuts and falling mortgage rates. European and Asian markets' recovery is expected to be slower due to high dependence on imports from Saudi Arabia and the USA. The Suez Canal crisis is expected to introduce significant inflationary pressure down the Hexene value chain.