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Shenhua Auction: Discounts sustained sell-through rates amid weak fundamentalsAuction results showed that deals for PP homo yarn and LLDPE film were broadly similar to the previous session, supported mainly by the producer’s agile pricing strategy to mitigate the impact from weaker futures trading. |
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Shenhua Baotou Coal Chemical Co., China’s largest coal-based petrochemical producer, wrapped up its 20 August auction with modest deal volumes, underscoring the market’s persistent caution despite fresh price concessions. Results for prime grades were as follows:
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Product |
Auction Volume |
Deal Volume |
Auction Prices |
Deal Prices |
Deal % |
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CNY/ton |
USD/ton |
CNY/ton |
USD/ton |
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Combined and reported by CommoPlast |
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PPH Yarn |
1502 |
927 |
6700 |
$825 |
6700-7020 |
$825-864 |
61.0% |
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PPH Inj |
50 |
10 |
6750 |
$831 |
6750 |
$831 |
20.0% |
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PPBC |
200 |
60 |
7050 |
$868 |
7050 |
$868 |
30.0% |
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LL Film |
350 |
300 |
7100 |
$873 |
7100 |
$874 |
85.7% |
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*Auction and Deal volumes are in tonnage *All USD equivalent prices only exclude the 13% value-added tax (VAT). They have not taken into account other costs that might incur in the selling process, i.e. import duty, customs clearances. |
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Auction platform: https://www.e-chnenergy.com
Auction time: Monday – Friday, 10 AM – 12 PM
Key takeaways:
Auction results showed that deals for PP homo yarn and LLDPE film were broadly similar to the previous session, supported mainly by the producer’s agile pricing strategy to mitigate the impact from weaker futures trading. In fact, auction prices for both PP and LLDPE were down adjusted by CNY 20-50/ton from the previous day, with deal prices reflecting even steeper discounts of between CNY 30/ton and CNY 170/ton.
Even so, the appetite for fresh purchases remains muted. Buyers are highly selective, reluctant to replenish beyond immediate requirements as downstream orders stay thin. Market participants noted that seasonal demand from packaging and agricultural film has yet to meaningfully offset pressure from China’s softer macroeconomic backdrop, where July industrial production and retail sales growth undershot expectations.
Written: Kat Yun Yun
Edited: Farid Muzaffar
Country
China
