Europe hexane firms on rising feedstock but market remains long

20 July 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--Prices in the European hexane market firmed this week on the back of increasing feedstock prices, however sources on Friday described the market as long.

Market participants throughout the UK and northwest Europe have reported a glut of supply of the hydrocarbon solvent, despite entering a traditional busy season.

A UK distributor said the oversupply could be due to a recent production bottleneck now streaming into the market, or a quiet buying period.

Another source said there is a lull in demand as buyers hold off, as they had purchased when prices were low and are now in the sidelines as prices increase.

Firming feedstock prices of crude oil and naphtha are having an impact in the market with European free delivered prices firming to €860-910 ($1,047-1,108)/tonne FD NWE, an increase of €10/tonne.

In the UK, free delivered market prices were around 53-55 pence/litre FD, an increase of 1 pence/litre.

A European producer said last week the long market had created a large price spread in the free delivered market. However, prices at these levels could no be confirmed.

It is understood the free on board market is quiet, with little to no interest in offering or bidding on spot barges.

Hexane demand is usually higher at this time of year to coincide with the vegetable harvest extraction process.

A source said there may be a spike in demand in August, however much of the agricultural buying may have already been done.

Sources said the overall reduced demand is not an example of buyers moving away from the product, rather a seasonal supply and demand adjustment.

($1 = €0.81)


By: Kate Wilcock
+44 208 652 3214



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