June PP Resources Auction at Shenhua Group

Highlights

Shenhua Group, the first commissioned coal-to-PP enterprise in domestic PP industry, including subsidiaries such as Shenhua Ningxia Coal Industry, China Shenhua (Baotou) Charcoal Chemical, Shenhua Yulin Energy and Shenhua (Xinjiang) Group. Considerable attention was paid to the auction situation of resources from Shenhua Group, so that it could help market players to learn about the transactions.

China’s PP market prices mounted up at first, but then the prices declined in June. Meanwhile, the PP futures prices moved upwards at the end of June, and the PP producers kept their offers firm, so the PP market prices fluctuated at high levels. Seen from the above chart, the turnover ratio hovered around 70%-90% in H1 June. From June 15 to June 22, the turnover ratio hovered around 35%-70%, while it rallied to 70%-90% after June 25. Generally speaking, the average turnover ratio was 75%. Therein, the turnover ratio of raffia materials was 74% in June, which was largely unchanged from April and May.

According to the statistics, the overall auction volume of PP resources at Shenhua Group was 91,179mt in June, and the transaction volume was 72,084mt. The turnover ratio was 75%. Therein, the transactions of resources at China Shenhua (Baotou) Charcoal Chemical were fine, with 87% of turnover ratio.

The main sales regions of raffia materials were North China, East China and Northwest China. The trading activities were active in East China, with the turnover ratio of 91%. The turnover ratio of copo PP was higher than that of raffia materials in June. Perhaps, it was because that prices of copo PP were high under strong downstream demand for low-melting copo PP.