Hexene Market in the USA Remain Bearish Despite Major Production Cuts
- 18-Jan-2023 7:07 PM
- Journalist: Jai Sen
Houston (Texas): Hexene market in the western region has remained on a bearish trajectory in the past couple of months. These developments are majorly attributed to the inadequate demand outlook in the domestic and overseas markets. In the fourth quarter of 2022, the FOB Texas monthly average discussions for Hexene plunged by 6.17% to USD 2478 per tonne in December 2022.
As per the customs data, the US imports for Polymer grade Olefins ( incl. Hexene) in primary form totaled 16800.5 tonnes in October 2022, from 19602.4 tonnes in October 2021, accounting for a substantial drop of 14.30% in the imports of Hexene in year-on-year basis. The rising inflation and hiked interest have substantially impacted the cost of living on the consumer end. In response, these developments impacted the demand pattern for Hexene in the region.
The downstream Polyethylene (PE) market has remained highly congested amidst the region's high market competitiveness. China, one of the major importing nations of US Polyethylene (PE), has remained subdued throughout the H2 of 2022. However, in the last month, the PE market has observed a substantial rebound as restocking practices were evident across the Asia Pacific region. Despite that, the positive impact on the Hexene and PE offers has been negated by the destocking drive amongst the market players resulting in a wider window of negotiations and high price competitiveness across all regions.
In December 2022, the Arctic blast and winter storm brought extreme weather conditions has disrupted transportation and power, forcing the major producers to take precautionary measures. As a ripple effect, several Hexene manufacturers in the Gulf Coast region have either reduced the operating rates or temporarily suspended operations of their crackers. In response, these developments have taken a major toll on the supplies of Hexene in the US domestic market.
As per the ChemAnalyst pricing intelligence, despite the recent constraint over the supplies of Hexene, the market dynamics will likely remain bearish throughout January 2023. As inquiries from China remain muted amidst the upcoming festive season, and the European market players lack market competitiveness amidst the high energy prices and rising inflation & interest rates.