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A Pessimistic Outlook is Likely to Surround the US 1-Hexene Market
A Pessimistic Outlook is Likely to Surround the US 1-Hexene Market

A Pessimistic Outlook is Likely to Surround the US 1-Hexene Market

  • 27-Jun-2023 12:09 PM
  • Journalist: Nicholas Seifield

Texas, USA: The 1-Hexene market in the US has observed a significant downturn in the second quarter of 2023. The major driving factors of the 1-Hexene market are the downstream HDPE and LLDPE markets. The demand from the downstream High-Density Polyethylene (HDPE) and Linear Low-Density Polyethylene (LLDPE) was observed to be suppressed in the US market as the consumers were reluctant for newer purchases, and a strong wait-and-see attitude prevailed in the region. The slowdown in the US economy led to a drop in demand for 1-Hexene from end-use automotive and construction industries.

The prices of 1-Hexene DEL US Gulf dropped by 13.0% to USD 1400 per tonne in April from USD 1610 in March. Further, the prices of 1-Hexene declined by another 4.0% to USD 1344 per tonne in May due to a solid contraction in new orders amid bleak demand conditions.

The manufacturing PMI of May dropped to 46.9 from 47.1 in April, registering the biggest contraction in the past seven months because of a drop in new orders of 1-Hexene. The new order index contracted to 42.6 from 45.7 in April. The domestic manufacturers mainly slowed the output rates, and businesses were mainly operating on a demand basis. Amidst this, the inventories index dropped to 45.8; the April reading was 46.3.

The economic conditions in the region were the primary factors that dampened the business sentiments. The debt-ceiling talks and the continuous fear of interest rate hikes coupled with looming inflationary pressure across the globe, all attributed to the deteriorated market conditions of linear alpha olefins, specially 1-Hexene.

Another reason for the slowdown in the entire chemical manufacturing industry was the recession in European countries. The sentiments in the German economy suffered a setback. The Business Climate Index fell to 91.7 points in May after 93.4 points in April. After six increases in a row, this was the first drop.

The European Union (EU) and the United States (US) have one of the largest and most comprehensive bilateral trade and investment relationships and enjoy the most integrated economic relationship in the world.

The EU's top service trading partner is still the United States. In 2021, bilateral trade in services surpassed 500 billion euros, a record high.

As per the ChemAnalyst database, the market sentiments for 1-Hexene are presumed to decline further in the upcoming month, and later, it is expected to rebound and show a slight improvement as the demand outlook enhances and the European economy stabilizes. Also, the competitiveness from the overseas markets is anticipated to surge, hence positively developing the 1-Hexene market in the USA.

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