Bearish Market Sentiment Clouds Hexane Outlook Amid Falling Replacement Costs
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Chemicals Price
Importers have reduced Hexane prices for direct end-users by ₹3/kg, with current prices at ₹88++ Ex Kandla, ₹89++ Ex Mumbai, ₹91++ Ex Vizag, and ₹92++ Ex Chennai, on advance payment terms.
Trader offers were mixed, with prices at ₹90++ Ex Kandla on 60-day credit terms. Consumers are reluctant to make bulk purchases due to surplus inventories and expectations of further price corrections.
Chemicals Supply & Demand
Supplies remain abundant, with port inventories reaching an all-time high, according to a market participant. Importers and traders are under pressure due to weak demand and sluggish liquidation. Additionally, lower replacement costs are adding to the anxiety within trade circles, as noted by a trader.
Both bulk consumers and traders are avoiding inventory accumulation, opting for just-in-time purchases given the surplus stock, poor demand, and declining replacement costs. Furthermore, bearish crude oil prices are contributing to negative market sentiment in the short term.
India's demand for N-Hexane and food-grade Hexane is approximately 11,250 MT per month. Domestic producers BPCL, CPCL, and IOL each produce around 5,000 MT.
Chemicals News
In international news, upstream crude oil benchmark WTI prices dropped by 0.22%, settling at $71 per barrel. CIF India Hexane offers for October shipments have also fallen to $950/MT on LC at sight payment terms.
Expert Opinion
As per experts, N-Hexane prices will likely remain under pressure this week due to weak downstream demand, surplus inventories, and lower replacement costs. Buyers are advised to exercise caution while building inventories.
Daily Market Report
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