Hexane Prices Adjust to Surplus Inventory, Market Awaits Seasonal Demand Boost

Key Takeaways:

• Hexane Price Drop: Prices for Hexane have been reduced by ₹1/kg, with offers ranging from ₹85.50 to ₹88++ per kg across Kandla and Mumbai.
• Surplus Supply: Port chemical inventories are at record highs, causing fluctuations in spot prices.
• Demand Shift: Chemical buyers are favoring spot purchases due to surplus and falling replacement costs, maintaining market activity.
• Global Factors: Weakening crude oil prices and geopolitical tensions are influencing chemical market sentiment.

Chemical Price: Hexane Price Reduced in Key Regions

• Hexane prices for direct end-users have been reduced by ₹1/kg, with current offers at ₹87++ per kg Ex-Kandla and ₹88++ per kg Ex-Mumbai, based on 60-day payment terms.
• Trader offers are more varied, with prices quoted at ₹85.50++ per kg Ex-Kandla for advance payment terms.
• End-users are showing reluctance to engage in bulk deals due to weakening crude oil prices and excess Hexane inventories at ports. Additionally, there is an expectation of further price corrections.

Excess Supply and Inventory Pressure on Hexane Market

• Hexane supply remains in surplus, with port inventories reaching record levels in September. Spot prices are fluctuating as importers push for quicker sales. Traders holding inventories are under pressure due to sluggish demand and limited liquidation. Furthermore, falling replacement costs are adding to the market panic.
• Despite the abundant supply and steady arrivals of vessels, both importers and traders remain hopeful for a market rebound. However, with lower replacement costs, buyers are opting for spot deals rather than building up inventory. This increased activity in spot transactions provides some optimism for market recovery.
• Bearish crude oil prices continue to weigh down market sentiment, although the ongoing conflict between Iran and Israel has not yet impacted Hexane prices significantly.
• India's monthly demand for industrial and food-grade Hexane is estimated at approximately 11,250 metric tons. BPCL, CPCL, and IOL, the key domestic producers, have a combined production capacity of 5,000 metric tons per month.

Chemical News: Global Market Impact on Hexane Demand

• In the international market, the crude oil benchmark WTI saw a marginal increase of 0.07%, reaching $70.72 per barrel. Meanwhile, natural gas prices dipped by 0.35%, settling at $2.33 per MMBtu.

• CNOOC Ningbo Daxie Petrochemical, a major para-xylene producer located in Ningbo, China, has announced an annual shutdown of its plant from 10th October 2024, with operations expected to resume in mid-December. The plant's production capacity is 1.60 million metric tons per annum.

Explore more industry updates and N-hexane news here!

Expert Opinion on Chemical Market Trends

• Hexane prices are expected to remain mixed due to the surplus inventories and lower replacement costs. However, the anticipated rise in seasonal demand may provide some support.
• The market remains active, with most buyers favoring spot purchases over long-term inventory stocking, sustaining a steady trade environment.