May Hexene Prices Remain Unrelenting in The US Market
- 11-May-2022 5:14 PM
- Journalist: Patricia Jose Perez
In the latest turn of events, Natural gas prices have crossed the USD 8/MMBTU and hovering in the USD 7.5-8/MMBTU. The sudden surge in the Natural gas prices has pressured the downstream petrochemical market, where the US depends mainly on crude oil and natural gas for petrochemical production. Meanwhile, the crude oil market remains resurgent, fluctuating between USD 105-110/b.
As of the week ending 6th May 2022, Hexene prices were assessed at USD 3849 per MT on FOB basis. Hexene is one of the downstream derivatives of natural gas. Market participants have reported increased cost pressure as the primal factor impacting sentiment in the US. Meanwhile, demand from the downstream plasticizer market has been stable as the plastics market has stabilized after months of the bullish rally. The European market has been under severe inflationary pressure, which has opened the arbitration window for the US producers.
Hexene, one of the Linear Alpha Olefins (LAOs), has been on a consistent uptrend mirroring the trend of other LAOs since the beginning of volatility in the crude oil market. Hexene relies heavily on other olefins like ethylene for production, and olefins have been gaining persistently, putting undue pressure on the producers. In lieu of that, producers have been keeping the strong pricing sentiment in the domestic market.
While in Saudi Arabia, the Hexene market has shown early signs of change in momentum as the plastic market has witnessed a drop in prices, the first in several months. This is likely to stabilize the prices of Hexene in the Middle East region. However, crude oil prices continue to march upwards, maintaining healthy cost pressure on the downstream Hexene.
As per ChemAnalyst, "Hexene market has been expected to remain healthy in the coming weeks owing to soaring natural gas prices in the US market. Meanwhile, demand fundamentals have been stable to the firm from the plasticizer market."