Shenhua Auction: Sluggish PP bids underscore deepening price sensitivity

Shenhua Baotou Coal Chemical Co., China’s largest coal-based polyolefins producer, closed its 30 June 2025 auction on a muted note, with sharp contrasts in performance between PP and LLDPE grades pointing to divergent market dynamics.

Auction platform: https://www.e-chnenergy.com  

Auction time: Monday – Friday, 10 AM – 12 PM 

Key takeaways:

The auction results underscored deepening caution in the PP segment, with homo-PP yarn achieving a meagre 5.3% deal ratio despite consistent offer volumes. In contrast, LLDPE film drew robust interest, moving 86% of listed cargoes at flat pricing.

The slump in PP deal volumes followed a CNY 110/ton hike in starting prices from the previous session, pushing offers to CNY 7,110/ton. This uptick met immediate buyer resistance, with traders citing subdued downstream demand and pressure from the Dalian Commodity Exchange as key deterrents.

“The market continues to display acute sensitivity to pricing. Without deeper cuts, Shenhua may struggle to offload PP cargoes in the near term,” one bidder commented.

Sources also flagged the unchanged auction volume for homo-PP—despite poor sell-through—as a potential indicator of rising stock pressure at Shenhua, which may weigh further on prices if not addressed.

With the Dalian futures market offering little encouragement and buyers pushing back on any upward price moves, Shenhua's auction results signal a precarious start to the second half of the year for the PP market. Unless producers recalibrate offers to better align with market appetite, further weakness in buying sentiment appears likely.

Written: Kat Yun Yun 

Edited: Rochelle Nguyen