For the Quarter Ending March 2022
North America
Hexene market was firm during the first quarter of 2022 owing to strong cost pressure from crude oil prices and robust demand from downstream Polymers and other industries. Market dynamics were tighter as the global demand for crude oil was outpacing the available supply. In addition, the Ukraine-Russia conflict further exacerbated the demand-supply dynamics of crude oil. Both Brent and WTI prices remained strong in the global market and consequently, inflationary over Hexene compounded while demand for the material rebounded in H2 of Q1 2022. Chevron Phillips has reported normalcy in production with limited to no production disruptions during the quarter. The company has also signified the consistent rise in crude oil may not show any short-term drawbacks however midterm to long term implications could be dire having global ramifications. Demand from polymer segment has increased and, as of March 2022, Hexene prices were assessed at USD 3595 per MT on FOB basis.
Asia Pacific
Middle East region, key producer of Hexene in Asia, has observed strong Q1 2022 where Hexene prices skyrocketed in the backdrop of rising prices of crude oil and its derivatives. Hexene prices were assessed in excess of USD 3300 per MT on FOB basis owing to strong demand sentiment and increased prices of crude oil. SABIC, only producer in the middle east Asia region, has increased prices amid rising demand from downstream plasticizers and growing international consumption. Middle East Asia cater to South Asian demand of Hexene and consequently, India and China have witnessed strong pricing sentiment during the quarter. China also has domestic production and uptrend in the prices has also been observed in the domestic market and prices were assessed at USD 3140 per MT on FOB basis after conclusion of Q1 2022.
Europe
During the first quarter, prices of Hexene remained firm on the back of strong cost pressure and robust demand from downstream Polyolefins. Crude oil prices started the year on a firm note as prices were assessed in USD 80-90/b range however the Russian invasion of Ukraine exacerbated market dynamics and crude oil prices went haywire. Consequently, downstream Naphtha prices broke charts in Q1 pressuring downstream derivatives including Hexene. Imports of LNG become strained as trade in Black Sea region got hampered while relationship between the West and Russia reached its lowest point in decades. Limited availability of LNG increased inflationary pressure and subsequently production cost increased substantially. Hence, after conclusion of Q1 2022, Hexene prices were assessed at USD 3940 per MT on FOB basis.
For the Quarter Ending December 2021
North America
Skyrocketing prices of crude oil has culminated in substantial rise in overall cost of Hexene causing market participants to increase prices of the material in both domestic as well as international markets. Continuous climb in crude oil price has been speculated to be caused by underutilized capacities around the world and production disruptions in Q3. Strong polymer demand in USA has kept an upward pressure on the demand of Hexene in the market further extrapolating the overall prices of Hexene where November prices were assessed at USD 3415 per MT FOB Texas. However, demand declined towards the end of the quarter and crude values stabilized in H2 which provided necessary reprieve for the downstream buyers as prices declined to USD 3330 per MT FOB Texas.
APAC
In India, Hexene prices observed strong performance in the first half as polymer demand drove hexene consumption forwards and consequently prices rose to INR 101500 per MT on Ex-location basis. However, demand of polymers stagnated towards H2 of Q4 which limited the consumption of Hexene and thereby, prices dropped to INR 98400 per MT on Ex-location basis in December. In Saudi Arabia, Hexene prices remained robust throughout the last quarter showing no signs of retreat due to increase in average feedstock prices and high product demand in the export market. FOB Al-Jubail offers increased to USD 3130 per MT in November. Some players reported decrease production volumes as a result of the periodic maintenance at some of the factories. Higher downstream polyethylene sales volumes, driven by continued strong demand was partially offset by higher utility costs. Logistical hurdles continued to impact traded volumes. However, last weeks of December observed some stagnancy in pricing owing to decline in demand and consequently prices dropped marginally to USD 3108 per MT FOB AL-Jubail.
Europe
Hexene prices continued to rally up throughout the quarter which was driven by firm upstream costs and continued supply tightness in the market. Increased upstream prices have also been influenced by the changing dynamics of freight markets. In November, the prices of Hexene observed a steep increment and settled at USD 2535 per MT CFR Hamburg. Persistent tightness in the market has led to a spike in pricing indications as well in the export markets. Demand has been primarily driven due to higher polyethylene sales volumes across Europe. Imports have been limited as freight charges and shipping costs continue to soar upwards which made Asian exports uncompetitive and unsustainable.
For the Quarter Ending September 2021
Consistent demand for end products such as C6-LLDPE due to the heavy buying interest for packaging material positively impacted the market fundamentals of Hexene in August. Buyers were heard stockpiling heavy cargoes of Polyethylene over its increased demand from local vendors, thereby leading to a strong consumption of feedstock Hexene in the process. Moreover, Hexene consumption as a fuel additive also experienced a considerable surge on increment in domestic commute activities in the domestic market. Following the appreciable revival in its demand outlook, traders were heard extending their profit margins to make up for the loss incurred in the previous quarter.
Increased prices of Natural Gas and Crude oil around the world translated into strong pricing for several petrochemicals in the European domestic market. In lieu of that, Hexene pricing in Germany also followed the same pattern. Demand from the downstream polyethylene sector along with curtailed imports from Asia and North America further exaggerated the market dynamics resulting in a continuous rise in pricing. Furthermore, resolutely high shipping and freight charges from Asia continued to play a crucial role in the overall pricing trend of Hexene. Prices of Hexene as of the 2nd week of September were assessed at USD 1890/MT CFR Hamburg. With distorted market dynamics of Hexene across the globe, prices are likely to continue to increase further in Q4.
Prices of 1-Hexene witnessed historic highs in the 3rd quarter due to increased raw material pricing and continued tightness in the market supply. As per the market experts, the prices showed notable gains in the second half of the financial year due to a combined impact of higher upstream Brent crude oil and global supply disruptions. “C6 pricing is relatively high as availability is still restricted from the overseas and crude is showing no signs of retreat. We are currently sending shipments only to Eurasian countries and that too on priority orders,” said a leading manufacturer. FOB Al-Jubail prices touched USD 2904/MT during the week ending 17th September. As per the market players, the global shortage of Hexene also affected the supply of several grades of mLLDPE whose demand is picking up with the economic rebound during the quarter.
