European Hexene Prices Poised for Recovery amidst rising C2 prices, volume growth forecast in Q3
- 09-Aug-2024 6:12 PM
- Journalist: Kim Chul Son
Hexene prices poised for recovery in Europe amidst rising ethylene prices in the early days of August. C2 spot prices were revised up by producers like LYB and Eni amidst commodities market speculative trading began. Spot prices went as high as USD 25/MT to USD 40/MT while the contract price revision for August went up by EUR 20/MT. While the suppliers focus on extracting higher margins, demand for Hexene remained relatively stronger on a YoY basis in 2024. This was attested largely due to falling interest rates by European Central bank and subsequently by reflected in the fall of mortgage rates in the beginning of August 2024. In the context of falling interest rates, easing of crude futures and rising C2 prices, the Hexene market and subsequent HDPE and LLDPE markets are forecast for recovery in H2 2024.
On July 29, an explosion occurred at BASF Ludwigshafen facility affecting largely Vitamin supply lines. Subsequently, FM majeure was declared on supplies due to repair works commencement. Market intelligence and sources revealed that other market suppliers revised their prices upwards as speculative demand in the commodities market increased. Ethylene quotations dated 31st July by a supplier showed contract prices going up however, no significant volume orders were placed as speculative demand trailed behind the price hike. As early as 2nd August, the Hexene quotations showed upward price movement before BASF further clarified their positions. Ethylene futures initially gained amidst supply woes affecting immediate rise in Hexene prices, a market participant revealed. ChemAnalyst continues to track this development in Hexene prices.
Hexene prices previously reached their bottom quotations of FD Hamburg USD 2280/MT in the mid-July, according to the data as Saudi bound prices continued to drop as demand for Hexene weakened. Europe’s LLDPE and HDPE markets began to show higher activities and an increase in volumes for Hexene. Tracking the prices, HDPE and LLDPE prices surged upto 10% on spot basis throughout the 45 day period. The upward revision observed resilient consumer spending as Spring and Summer and pent-up European demand after inflation eased. Films, packaging companies expanded their inventories for materials as more orders from retail and logistics allowed suppliers to keep their prices up. On the other hand, increased downturns as INEOS as well as LyondellBasell announced their crackers to undergo maintenance in the early days of August triggered a competitive upward revision of prices amongst the traders as speculation and uncertainty persisted.
Hexene prices are set for recovery as interest rates have been falling and construction industry is on the turnaround. Eurostat’s data for June revealed. On the other hand, easing gas and crude prices continues to keep petrochemical prices down while maintaining margins at stable rates. The capacity utilization surged in Q2, Shell reported and their forward looking statements reflect that with increasing demand for Hexene and subsequent PE products, the prices are expected to recover as price premiums to keep on increasing for European consumption.