Shandong Yulong Auction: Higher offers face pushback amid weak market sentiment
Shandong Yulong’s latest auction saw muted participation on Tuesday, weighed down by weaker futures and a generally soft local market environment.
|
Product |
Auction Volume |
Deal Volume |
Auction Prices |
Deal Prices |
Deal % |
||
|
CNY/ton |
USD/ton |
CNY/ton |
USD/ton |
||||
|
Combined and reported by CommoPlast |
|||||||
|
LLDPE Film (FD) |
1353 |
30 |
6590 |
$828 |
6650 |
$836 |
2.2% |
|
HDPE Film (FD) |
600 |
60 |
7090 |
$891 |
7090 |
$891 |
10.0% |
|
HDPE Film (EXW) |
600 |
30 |
7050 |
$886 |
7050 |
$886 |
5.0% |
|
HDPE Blow (FD) |
600 |
0 |
6700 |
$842 |
- |
- |
0.0% |
|
HDPE Yarn (FD) |
300 |
0 |
7140 |
$898 |
- |
- |
0.0% |
|
* 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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Shandong Yulong’s latest auction saw muted participation on Tuesday, weighed down by weaker futures and a generally soft local market environment.
Auction prices for LLDPE and HDPE were set CNY 50–260/ton ($7–37/ton) higher than the previous session late last week, prompting resistance from buyers, according to market participants. The firm offers contrasted with the broader market, where discounts were readily available, further limiting buying interest.
A market source noted that Yulong had issued guidance to distributors and customers last week, urging the avoidance of unhealthy price competition. “Yulong’s auction prices were already relatively uncompetitive, and the latest upward adjustment has further eroded appetite,” the source said. “With local prices under pressure and discounts available elsewhere, sustaining sales at these levels will be challenging.”
Currently, the lower end of the spot market for LLDPE and HDPE film stands at CNY 6,500/ton and CNY 7,000/ton EXW China, respectively. Many auction participants indicated they would wait for potential price cuts, as they doubt the market can hold at higher levels, reducing their willingness to engage in the Yulong auction.
Written by: Kat Yun Yun
Edited by: Farid Muzaffar