Resilient Recovery of N-Hexane Prices After Recent Decline in Chinese market
Resilient Recovery of N-Hexane Prices After Recent Decline in Chinese market

Resilient Recovery of N-Hexane Prices After Recent Decline in Chinese market

  • 14-Feb-2024 4:17 PM
  • Journalist: Emilia Jackson

Shanghai (China): The n-Hexane market witnessed a recovery in prices during the early weeks of February, marking a rebound from the recent decline in January 2024. However, overall market sentiments remained subdued. The surge in crude oil prices, influenced by disruptions in the Red Sea supply, had a marginal impact on feedstock crude oil prices, coinciding with speculations about a ceasefire between Hamas and Israel.

The increasing demand for soybeans, driven by urbanization, income growth, and rising per capita consumption of soy-related foods, has a direct impact on the pricing of n-Hexane. N-Hexane, utilized as a solvent in the extraction of vegetable oils, particularly in the food industry, is intricately linked to the soybean market. The stability of n-Hexane prices in China correlates with the country's advancements in biological breeding and seed innovation. Innovations like oilseed with shorter growth cycles play a pivotal role in enhancing extraction efficiency downstream. China's emphasis on genetically modified crops underscores a dedication to sustainability, contributing to both food security and the stability of crucial industrial sectors. Concurrently, U.S. soybean export sales data for the same period displayed mixed outcomes, with sales experiencing an increase but remaining below the average. This reflects the impact of intensified global competition in the soybean market and impacted the n-Hexane price.

As the Spring Festival approaches, overall n-Hexane production remains subdued, characterized by scattered small orders downstream that are moderately stocked. Additionally, there has been a moderate surge in inquiries for downstream paint and coating, primarily from the automobile industry. This surge is attributed to an increase in automobile sales. According to data from the China Association of Automobile Manufacturers (CAAM), China's domestic vehicle sales witnessed a significant surge, rising by 48% to 2.44 million units in January 2024 compared to the previous year's sales of 1.65 million units.

In the Asian petrochemical markets, a mixed trend characterized the lead-up to the Lunar New Year holiday, signaling a stagnant market environment and a less optimistic industry outlook. The customary extended holiday period for migrant workers, who return to their hometowns during this time, has contributed to a subdued market scenario. These workers typically resume work after the Lantern Festival, scheduled for 24 February this year. Alongside these market dynamics, the price of n-Hexane witnessed a 1.2% surge in the second week of February, settling at USD 1670/MT FOB Qingdao.

Anticipated temporary closures during the Lunar New Year holiday are expected, with factories projected to resume operations post-festivities. According to ChemAnalyst, forecasts for n-Hexane prices in the Chinese market suggest a gradual and steady movement in the first quarter of 2024. This is anticipated to be supported by enhanced productivity rates and a moderate demand outlook for n-Hexane.

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