CommoPlast Article

Shenhua Baotou Coal Chemical Co., China’s largest coal-based petrochemical producer, concluded its auction on 22 December 2025 with starkly contrasting results between its core products. The session was defined by a total liquidity freeze in the PE sector as futures hit fresh lows.

Product	Auction Volume	Deal Volume	Auction Prices		Deal Prices		Deal %
Product	Auction Volume	Deal Volume	CNY/ton	USD/ton	CNY/ton	USD/ton	Deal %
*Combined and reported by CommoPlast*
PPH Yarn	900	700	6000	$754	6020-6080	$757-764	77.8%
LL Film	700	0	6260	$787	-	-	0.0%
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.

The first trading session of the week was overshadowed by a continued slide on the Dalian Commodity Exchange (DCE). Both PP and LLDPE May 2026 futures contracts extended their downward trajectory, breaching last week's support levels. This persistent technical weakness in the futures market weighed heavily on auction sentiment, particularly for the PE segment.

At the auction, the performance of PP and LLDPE showed a divergent trend. Homo-PP yarn managed to secure relatively healthy turnover. Market sources attributed the 77.8% deal rate to essential, need-based purchases.

Shenhua lowered the opening bid by CNY 50/ton from last Friday to CNY 6,000/ton, a move that successfully aligned the auction with spot market adjustments and enticed buyers to cover immediate requirements despite the broader bearish outlook.

In contrast, the LLDPE film auction suffered a complete standstill with a 0.0% deal rate. Even though the producer lowered the floor price by CNY 110/ton from Friday’s failed hike, the adjustment failed to gain traction. The sharp morning drop of over CNY 100/ton in LLDPE futures acted as a significant deterrent, leaving the auction floor entirely vacated.

"The LLDPE market is in wait-and-see mode," a local trader commented. "While PP found buyers through targeted discounts, LLDPE is still struggling to find its bottom. Buyers are haunted by the sharp decline in futures this morning and are questioning if prices need to retreat toward levels seen during the 2020 pandemic downturn before they become attractive again."

With the Lunar New Year fast approaching and essential year-end requirements largely fulfilled, the prevailing sentiment remains defensive. The total absence of LLDPE deals today signals that producers may face mounting inventory pressure, likely necessitating a more aggressive downward reset of opening bids in the coming sessions to restore liquidity.

Shenhua Auction: Weaker futures pressure prices, buying activity for PP and LLDPE diverged