Shandong Yulong Auction: Softer PE prices stimulate limited buying; PP sentiment weakens

Shandong Yulong’s latest polyolefin auction on 21 October showed diverging results between PP and PE, as PE continued to attract limited but improved buying interest while PP demand remained stagnant.

LLDPE film stood out as the most actively traded grade, with nearly half of the offered volume concluded. The product was priced below the CNY7,000/ton threshold on a delivered basis, roughly aligned with current market indications and considered reasonable by most converters. Despite this, the achieved deal prices were about CNY30/ton lower than last week, underscoring persistent caution in the market.

Other PE grades recorded mixed outcomes. HDPE film managed moderate buying momentum with a 34% deal ratio, while blow moulding and yarn grades posted smaller volumes.

PP performance remained muted, with no deals concluded for mainstream PPH yarn and only sporadic trades for copolymer and random grades. Buyers continued to hold back amid weak downstream operating rates and expectations of further discounts.

Market discussions centred on speculation that Yulong might trim PP and PE operating rates, though no confirmation was available. “There are still rumours about potential production cuts, but buyers are largely unconcerned since supply remains adequate,” one trader commented. “Sentiment is steady but cautious — there’s no sign of real demand coming back yet.”

The overall outcome reflected a market still trapped in a wait-and-see phase, with producers relying on competitive PE offers to sustain transaction flow while PP continues to lag. Unless downstream orders improve or feedstock costs stabilise, the short-term outlook across both resins remains subdued.

Written: Kat Yun Yun
Edited: Aiman Haikal