N-Hexane Prices Soar as Market Prepares for Seasonal Extraction Demand
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Importers have raised the price of N-Hexane by ₹5/kg, bringing it to ₹98++ per kg ex-Kandla on a 60-day credit basis. Traders are offering even higher rates, around ₹100++ per kg ex-Kandla on the same credit terms. No bulk deals were reported, as sellers are reluctant to liquidate their limited inventories.
Chemical Price
- Importers have raised the price of N-Hexane by ₹5/kg, bringing it to ₹98++ per kg ex-Kandla on a 60-day credit basis. Traders are offering even higher rates, around ₹100++ per kg ex-Kandla on the same credit terms.
- No bulk deals were reported, as sellers are reluctant to liquidate their limited inventories.
- Domestic manufacturer BPCL's food-grade hexane is priced at ₹148.95/kg ex-Mumbai on advance payment terms.
- The sharp increase in N-Hexane prices is attributed to limited inventory at ports, coupled with the resumption of extraction demand expected from October 2024.
Chemical Demand and Supply
- During July and August 2024, N-Hexane prices underwent correction due to surplus inventories. Additionally, the decline in crude oil prices impacted hexane prices in both domestic and international markets.
- However, there were no issues with liquidation in August, as buyers had planned their inventories ahead of the anticipated supply disruptions caused by the Indian port workers' union strike, which began on 28th August 2024. As a result, N-Hexane inventories were quickly depleted.
- With feedstock crude oil prices showing some rebound and limited inventories at ports, higher hexane prices are inevitable, according to a market participant.
- The seasonal demand for oil extraction is expected to resume from October 2024, and the rebounding crude oil prices are likely to support hexane prices in the short term.
- The principal consumers of N-Hexane are the edible oil extraction industry, which constitutes 53% of the demand, followed by the pharmaceutical and polymer sectors at approximately 40%, with adhesives, sealants, and other applications making up around 7% of the demand.
- The Indian demand for N-Hexane and food-grade hexane is approximately 11,000-11,250 MT per month. Domestic manufacturers produce 5,000 MT per month, while the remaining 6,000-6,250 MT is imported monthly. Domestic manufacturer BPCL has a production capacity of 7,000 MT/year, while CPCL in Chennai and IOL in Koyali have production capacities of 25,000 MT/year and 28,000 MT/year, respectively.
Chemical News
- In the international market, upstream crude oil benchmark WTI prices decreased by 0.46% to $73.72/barrel.
- FOB Singapore naphtha prices stood at $658/MT.
- Downstream, N-Hexane CIF India for September 2024 incoming shipments were in the range of $980-$1,010/MT.
Expert Opinion
- It is expected that N-Hexane prices are expected to remain bullish this week due to limited inventory at ports and the upcoming seasonal demand for edible oil extraction.
- However, the lower replacement costs and decrease in crude oil prices could exert downward pressure on prices. Buyers are advised to remain cautious while making bulk purchases.
Daily Market Report
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