Shenhua Auction: Lower prices stimulate modest need-based buying

Shenhua Baotou Coal Chemical Co.—China’s leading coal-based polyolefin producer—concluded its 25 June 2025 online auction with mixed results, reflecting persistent caution in the broader market despite some improvement in sell-through rates.

Auction platform: https://www.e-chnenergy.com  

Auction time: Monday – Friday, 10 AM – 12 PM 

Key takeaways:

Despite weakening trends in key polyolefin futures contracts on the Dalian Commodity Exchange, Shenhua succeeded in improving deal volumes by lowering auction starting prices across major product lines. A notably reduced allocation ahead of month-end also supported the improved sell-through ratios.

Market participants noted that buying interest was largely price driven as Shenhua’s coal-based homo-PP was priced CNY 60–140/ton below equivalent materials in the domestic spot market, attracting need-based procurement from converters and traders.

“The market has largely priced in the de-escalation of Middle East tensions, and current procurement is guided by cost competitiveness,” said one trader. “However, attention is now shifting back to the ongoing US-China trade strain. With American buyers reducing forward purchases, the demand outlook for raw materials is turning increasingly bearish.”

Written: Kat Yun Yun 

Edited: Rochelle Nguyen