Shenhua Auction: Deal rates plummet as futures weakness renews buyer caution

Shenhua Baotou Coal Chemical Co., China’s largest coal-based petrochemical producer, concluded its auction on 16 December 2025 with lacklustre results. Buying interest weakened sharply across both PP and PE grades, reversing the tentative stability seen in previous sessions.

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

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

Participation at the auction evaporated as PP and LLDPE futures on the Dalian Commodity Exchange (DCE) traded in a weak, range-bound pattern during the morning session. The lack of upward momentum in the futures market immediately dampened sentiment in the physical market.

While the auction floor prices were set at CNY 5,820/ton for PP and CNY 6,300/ton for LLDPE, the actual transaction prices for deals concluded weakened noticeably. Market participants reported that the upper end of the transaction range fell by approximately CNY 20–150/ton compared to the previous day, signaling that sellers had to compromise to move even limited volumes.

The sharp drop in deal rates—down to 34.2% for PPH and a dismal 22.2% for LLDPE—indicates that converters are once again adopting a defensive stance.

"Confidence remains fragile," a local market participant commented. "Although futures did not break to new lows during the morning, the market is merely range-bound rather than showing any genuine strength. Buyers are questioning whether current price levels can be sustained, making price formation challenging."

The prevailing sentiment suggests that without a decisive rebound in the futures market or a clearer demand signal, procurement will remain strictly hand-to-mouth.

Written by: Kat Yun Yun 

Edited by: Aiman Haikal