Shandong Yulong Auction: LLDPE liquidity remains elusive despite additional afternoon session and price concessions
Both PP and LLDPE yielded disappointing sales results, characterized by weak demand and a persistent lack of buyer confidence.
|
Product |
Auction Volume |
Deal Volume |
Auction Prices |
Deal Prices |
Deal % |
||
|
CNY/ton |
USD/ton |
CNY/ton |
USD/ton |
||||
|
Combined and reported by CommoPlast |
|||||||
|
PPH Inj (FD) |
300 |
0 |
6170 |
$776 |
- |
- |
0.0% |
|
PPBC Inj (FD) |
300 |
0 |
6200 |
$779 |
- |
- |
0.0% |
|
LLDPE Film (EXW) |
3000 |
540 |
6130 |
$771 |
6190 |
$778 |
18.0% |
|
* 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 for PP and LLDPE yielded disappointing sales results, characterized by weak demand and a persistent lack of buyer confidence. While the producer initially excluded LLDPE film cargoes from the morning session, it later introduced an additional afternoon session specifically for this grade with a significantly larger volume of 3,000 tons. Despite the focused effort to stimulate liquidity, only 18% of the LLDPE volume was transacted, while PP injection and copolymer grades recorded zero uptake.
The auction outcome mirrors the broader "technical floor" search currently paralyzing the polyolefin complex. With Dalian Commodity Exchange (DCE) futures for May 2026 delivery continuing to weaken—PP and LLDPE shedding CNY 48/ton and CNY 40/ton respectively during the morning trade—buyers have retreated to a defensive "wait-and-see" stance.
The auction floor for LLDPE film was set at a competitive CNY 6,130/ton, yet the lukewarm response suggests that price concessions alone are insufficient to overcome the bearish sentiment fueled by a massive year-end supply overhang.
Market participants noted that the producer’s decision to open an afternoon session followed failed attempts to secure liquidity through private channels earlier in the day. “We heard that the producer attempted to engage in negotiations with customers in the local spot market earlier today, but the weak responses likely led them to open the afternoon auction session,” a local participant commented. This strategic pivot from offline to online channels highlights the intensifying pressure on producers to clear inventories and meet year-end sales targets amidst a structural glut.
The near-term outlook remains firmly pessimistic, as the market lacks clear guidance or bullish catalysts to trigger a recovery. With LLDPE prices now rapidly approaching 2020 pandemic-era lows, buyers appear to be waiting for the definitive bottom.
Most industry players anticipate that tactical maneuvers, such as additional auction sessions or minor price adjustments, will continue to face pushback until the official "anti-involution" mandates expected in March 2026 provide a concrete framework for capacity rationalization.
Written by: Kat Yun Yun
Edited by: Aiman Haikal