12 December 2024 - Shenhua's coal-based PP and PE Auction Results
According to market sources, this reduction stems from a strategic shift toward prioritizing offline sales to converters, allowing the producer to secure better profit margins. Additionally, Shenhua is reportedly withholding stock in anticipation of price increases in the near term.
Shenhua Baotou Coal Chemical Co has concluded the auction session for its coal-based PP and PE cargoes on 12 December 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 |
450 |
439 |
7450 |
$908 |
7480-7550 |
$912-920 |
97.6% |
|
PPBC |
- |
- |
- |
- |
- |
- |
- |
|
LLDPE |
400 |
400 |
8620 |
$1051 |
8650-8750 |
$1054-1067 |
100.0% |
|
*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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Shenhua concluded its latest auction session on a strong note, although the coal-based producer significantly reduced its auction volumes, particularly for homo-PP. According to market sources, this reduction stems from a strategic shift toward prioritizing offline sales to converters, allowing the producer to secure better profit margins. Additionally, Shenhua is reportedly withholding stock in anticipation of price increases in the near term.
Although several new PP plants have recently commenced operations within the country, market participants anticipate that the added supply will not make a meaningful impact until the next quarter. As a result, any immediate supply-side pressure has been largely discounted.
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