Al -Jubail (Saudi Arabia): In the past few weeks, 1-hexene prices have experienced a notable decline. This bearish trend in 1-hexene pricing is largely attributed to reduced trading activities and ongoing contract negotiations for the latter half of 2024. Ethane prices saw a modest increase of 6% throughout the month, while ethylene prices remained relatively stable, showing a slight 4% rise month-over-month. In the Saudi Arabian market, 1-hexene FOB Al-Jubail prices dropped by USD 140/MT, representing a 7% decrease. On the demand front, the 1-hexene market remained stable yet declining, influenced by subdued polyethylene prices. The supply chain for 1-hexene largely involves Mediterranean and Middle Eastern sources supplying Europe, while deliveries to Asia have moderated due to rising freight costs on the Asia-Mediterranean route and lower availability of liquid tankers in the Indian Ocean from the Red Sea.

The market situation for 1-hexene in Saudi Arabia has remained relatively stable, with moderate easing in supply due to higher freight charges. Shipping costs from Asia to Northern Europe have increased, with CFR charges per ton rising by USD 8 to 10/MT. Despite these logistical challenges, Saudi suppliers have increased discounts to Europe to maintain material flow. However, the 1-hexene market's weakening demand has led to a slowdown in price acceleration to a four-week low, with new orders also slowing down. Inflation has stagnated, with core inflation rising and OPEC+ price cuts causing crude prices to increase from USD 78/barrel to USD 87/barrel. The domestic construction sector in Saudi Arabia has also slowed down, exacerbated by high temperatures and labor shortages, despite ample 1-hexene and other intermediate material supply, especially HDPE and LLDPE. These factors have contributed to a slowdown in HDPE prices due to persistent weakness in the automobile and construction sectors, affecting demand up the chain to ethylene, whose prices have begun to fall in newer quotations.

Looking forward, the forecasted pricing trend for 1-hexene in Saudi Arabia suggests a continued decline in the near term. Prices are expected to decrease in May 2024 and in June 2024, before rebounding in July 2024. This deflation is driven by the de-stocking of excess inventories in spot markets as downstream polyethylene plants undergo downturns both in the Middle East and in major export destinations like China and India. The demand for 1-hexene and polyethylene is slowing, with suppliers extending discounts to sell off excess stocks. Additionally, domestic construction demand in Saudi Arabia is expected to decline due to high temperatures and lower water availability. Although 1-hexene contract pricing remains low due to stable summer demand, a recovery is expected by the month's end as supply stabilizes, and prices begin to settle. Moreover, with the anticipated cut in interest rates by the US Federal Reserve, consumer confidence in the economy is expected to improve, potentially boosting demand for 1-hexene-derived PE from the construction and automotive sectors.