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Shandong Yulong’s latest auction concluded without any prime-grade PE cargoes on offer, while the limited PP volumes listed remained completely unsold. The session underscored a deepening disconnect between producer targets and market reality, as the producer effectively withdrew from public price discovery for its PE grades in favor of private negotiations.

In a strategic pivot to generate liquidity without signalling a further collapse in public auction benchmarks, the producer redirected LLDPE film volumes to its distributor network for offline spot sales. Offers in this channel were reported at a low-end FD basis of CNY 6,460–6,600/ton ($812–830/ton, excluding VAT), marking a significant reduction of approximately CNY 130/ton ($18/ton) from the previous auction’s levels. 

However, market sources noted that even these discounted "shadow prices" failed to gain traction, as they remain uncompetitive against the aggressive offers circulating in the broader spot market.

The zero-uptake result for the remaining homo-PP yarn and PPBC further highlights the defensive stance of buyers, who continue to prioritize alternative procurement channels. With spot availability abundant and distributors undercutting producer offers to clear stocks, end-users found little incentive to engage with the auction platform, preferring to leverage the intense competition among sellers to secure deeper concessions.

Market players observed that this shift to offline sales reflects the intensifying margin pressure facing Shandong Yulong. While no official production cuts have been confirmed, the move suggests an attempt to stem inventory builds while avoiding the visibility of lower auction prints. 

Participants remain cautious, expecting prices to remain under downward pressure in the near term as long as spot supply overhangs persist and downstream demand remains lukewarm.

Written by: Kat Yun Yun
Edited by: Aiman Haikal

Country
China