Shenhua Auction: Buying interest rebounds, PP continues to outperform LLDPE

Shenhua Baotou Coal Chemical Co., China’s largest coal-based petrochemical producer, concluded its auction 18 December 2025, with the results for prime grades as follows:

Buying activity at Shenhua’s latest auction improved from the previous session, supported by a degree of stabilization in futures markets, while PP continued to outperform LLDPE.

PP and LLDPE May 2026 futures contract on the Dalian Commodity Exchange maintained diverged, with PP futures trading in a relatively firmer range compared with the weaker tone seen in LLDPE. This divergence was reflected in auction results. Overall deal volumes for both grades increased from yesterday, but price performance differed.

Homo-PP yarn deal prices were observed at stable to CNY 70/ton higher, indicating improved buyer acceptance at current price levels. The stronger sentiment drove deal rates to 81.8%, a significant recovery from the previous session. 

In contrast, LLDPE film deal prices were reported at stable to CNY 30/ton lower, underscoring the persistently weak sentiment in the polyethylene market despite the slight improvement in volume uptake.

Market participants noted that purchases remained largely need-based, but supply-side dynamics are beginning to shift. Reports emerged that several domestic producers are either shutting down units or switching swing-capacity from LLDPE to HDPE to ease near-term supply pressure. 

With margins under continued strain and prices trending lower, this production discipline aims to stem further erosion, though it has yet to spark a broad shift in buyer confidence.

Written by: Kat Yun Yun 

Edited by: Aiman Haikal