15 August 2024 - Shenhua's coal-based PP and PE Auction Results
The persistent lackluster results from recent auctions have prompted Shenhua to intensify its efforts in the offline market. Industry sources indicate that the producer is now more amenable to negotiations in the spot market, aiming to expedite the movement of excess inventory.
Shenhua Baotou Coal Chemical Co has concluded the auction session for its coal-based PP and PE cargoes on 15 August 2024. The following table showed the details of the auction results for prime grade only:
|
Product |
Auction Volume |
Deal Volume |
Auction Prices |
Deal Prices |
Deal % |
||
|
CNY/ton |
USD/ton |
CNY/ton |
USD/ton |
||||
|
Combined and reported by CommoPlast |
|||||||
|
Homo-PP |
850 |
726 |
7590 |
$938 |
7590-7740 |
$938-957 |
85.4% |
|
PP Thinwall |
- |
- |
- |
- |
- |
- |
- |
|
PPBC |
588.4 |
212.4 |
7550 |
$933 |
7700-7800 |
$952-964 |
36.1% |
|
LLDPE |
750 |
265 |
8120 |
$1004 |
8120-8160 |
$1004-1009 |
35.3% |
|
LDPE heavy duty |
- |
- |
- |
- |
- |
- |
- |
|
HDPE |
- |
- |
- |
- |
- |
- |
- |
|
*Auction and Deal volumes are in tonnage *All USD equivalent prices only exclude the 13% value-added tax (VAT). They have not taken into account other costs that might incur in the selling process, i.e. import duty, customs clearances. |
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Trading sentiment on the Shenhua Auction Platform deteriorated towards the end of the week, as the coal-based producer struggled to secure full deals for both PP and PE, despite a significantly reduced auction volume. The decline in buying interest provides a clear reflection of the current demand conditions in the market.
The persistent lackluster results from recent auctions have prompted Shenhua to intensify its efforts in the offline market. Industry sources indicate that the producer is now more amenable to negotiations in the spot market, aiming to expedite the movement of excess inventory.
Additionally, it is noteworthy that the lower-priced LLDPE seen in yesterday’s auction was not repeated in today’s offerings. This shift creates a misleading impression of rising auction prices, although the actual price levels remain stable.
Background:
Shenhua Baotou Coal Chemical Co, the largest coal-based polyolefins producer in China, operates through four subsidiaries: 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 boasts an annual production capacity of 2.65 million tons of PP, 750,000 tons of HDPE/LLDPE, and 570,000 tons of LDPE.
Active in spot trading, Shenhua Baotou also conducts daily auctions for its cargoes from 10 AM - 12 PM on its dedicated online platform, available at https://www.e-chnenergy.com.
Written by: Kat Yun Yun
Edited by: Rochelle Nguyen