23 February 2024 - Shenhua's coal-based PP and PE Auction Results

Shenhua Baotou Coal Chemical Co has concluded the auction session for its coal-based PP and PE cargoes on 23 February 2024. The following table showed the details of the auction results for prime grade only: 

Even with a drastic surge in the auction quantity, Shenhua managed to achieve strong sales results on the final trading day of the week. Players ascribed the positive sales outcome to the futures market's recovery trend during the auction period particularly for homo-PP and LLDPE auctioned prices maintaining on a stable note. 

A favourable aftermath where buyers who were holding off purchases yesterday made hand-to-mouth procurements to replenish their cargoes given the reasonable price point, showcasing market acceptance. However, a greater number of players reckoned that the auction results did not accurately represent the current state of the market because their own domestic sales were performing rather poorly.

While some customers stated that the auction deals will primarily be driven by price competitiveness — auctioned cargoes are currently priced at the lower end of the market so those who are in need of inventories will prioritise purchasing from the auction first or else they would rather wait for more movements the following week.

Background: 

Shenhua Baotou Coal Chemical Co is currently the largest coal-based polyolefins producer in China, operates under four subsidiaries, namely: Shenhua Xinjiang Coal-based New Materials Project, Shenhua Yulin Energy Co Ltd, Shenhua Baotou Coal Chemical Co Ltd and Shenhua Ningxia Coal Industry Group (Ningmei).

The company has an annual capacity of 2.65 million tons/year of PP, 750,000 tons/year of HDPE/LLDPE and 570,000 tons/year of LDPE.

Shenhua Baotou Coal Chemical Co is active in spot trading, while also conducting the daily auction for its cargoes daily between 10AM to 12PM on the official online platform that specifically designed for this purpose: https://www.e-chnenergy.com