Shenhua Auction: Market reopens with modest gains as post-holiday buying fails to meet expectations

Shenhua Baotou Coal Chemical Co., China’s largest coal-based petrochemical producer, concluded its auction 05 January 2026, with the results for prime grades as follows:

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

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

Key takeaways

Shenhua’s PP and LLDPE auctions concluded the first session of 2026 with a measured uptick, as trading activity initially concentrated on auction platforms following the holiday pause. Buyers returned to the market to replenish depleted inventories, but overall sentiment remained cautious amid lingering uncertainty over near-term price direction.

Market participants reported a clear divergence between trading channels in the opening sessions. While auction transactions cleared at relatively firm levels, spot market demand lagged expectations. 

The anticipated post-holiday rebound, following widespread purchase deferrals in late December, has yet to materialise in full, leaving participants broadly in observation mode.

“The market reopened with a much calmer tone than expected,” a local trader said. “Despite earlier hopes for a strong rebound, actual demand remains thin. Most buyers are sticking to hand-to-mouth procurement and are unwilling to commit to larger volumes until a clearer price trend emerges.”

The cautious buying stance has persisted despite a major geopolitical shock in upstream energy markets, after the United States carried out a military operation in Venezuela. The development, which had been expected to inject a significant risk premium into crude markets, has so far failed to translate into sustained upstream support for petrochemical pricing.

Brent and WTI crude benchmarks remained largely stable at the start of the week, as adequate global supply and limited immediate disruption to Venezuelan oil exports offset geopolitical risk. The muted crude response has reinforced downstream caution, with converters opting to keep inventories lean rather than hedge against potential price volatility.

Meanwhile, domestic producers have largely maintained firm spot offers, a strategy that has further encouraged buyers to prioritise auction channels, where pricing is perceived as more competitive. Looking ahead, near-term sentiment is expected to hinge on whether upstream energy markets begin to reflect prolonged geopolitical risk and on clearer evidence of a demand recovery, with most participants likely to remain selective until a more defined price floor emerges.

Written by: Kat Yun Yun 

Edited by: Farid Muzaffar