LLDPE：地缘升级，裂解供应收缩延续；PP：多种原料供应受限，上游开工收缩

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The geopolitical situation remains unrelieved, with shipping stagnant in the Strait of Hormuz, affecting the logistics of oil tankers. Naphtha is expected to be strong, leading to an increase in PE costs. There is an expected improvement in the demand for mulch film after the festival, and the packaging film industry will gradually recover after the Lantern Festival. On the supply side, BASF Zhanjiang has achieved mass production, and the planned maintenance and production cuts are expected to increase in March. The production of standard products remains stable, but the inventory accumulation during the festival is significant. Attention should be paid to the persistence of the geopolitical situation and the willingness to restock during the peak season [3]. - For PP, C3 is affected by supply disruptions from Saudi Arabia and Iran, with strong cost support, and the PDH maintenance rate remains high. There is no new production before the 2605 contract, intensifying the game between existing supply and demand. After the Lantern Festival, downstream enterprises are expected to resume work intensively, with a month - on - month improvement in demand. The PDH profit remains at a low level, and multiple PDH plants in South China have not resumed operation. Under the deep - loss situation of PDH profit, attention should be paid to the marginal changes of cracking and PDH plants [3]. 3. Summary by Relevant Catalogs 3.1 Fundamentals Tracking - Futures Data: For L2605, the closing price yesterday was 8416, with a daily increase of 2.19%, trading volume of 1392919, and a change in open interest of 15415. For PP2605, the closing price was 8603, with a daily increase of 3.61%, trading volume of 1568850, and a change in open interest of 9927. The 05 - contract basis for L2605 was - 166 (previous day: - 86), and for PP2605 was - 103 (previous day: - 3). The 05 - 09 contract spread for L2605 was 271 (previous day: 302), and for PP2605 was 535 (previous day: 552) [2]. - Spot Price: In the North China region, the LLDPE spot price was 8250 yuan/ton (previous day: 8150), and PP was 8400 yuan/ton (previous day: 8300). In the East China region, LLDPE was 8400 yuan/ton (previous day: 8180), and PP was 8500 yuan/ton (previous day: 8300). In the South China region, LLDPE was 8400 yuan/ton (unchanged), and PP was 8400 yuan/ton (previous day: 8300) [2]. 3.2 Spot News - The weekly operating rate of PE and PP decreased by 3 - 5%. Plants such as CNOOC Shell, Sinochem Quanzhou, and Tianjin Bohua stopped production during the week. In terms of profits, domestic derivatives generally failed to keep up with the increase in US - dollar - denominated raw material prices, resulting in a significant compression of profits. The spot sentiment declined, with tight capital occupation in the middle - stream, and downstream enterprises resisted high prices. The trading atmosphere weakened significantly in the second half of the week. Downstream product quotations were difficult to pass on raw material costs, and some enterprises considered temporary production suspension. There was an inversion of domestic and foreign price spreads, and foreign enterprises declared force majeure [2]. 3.3 Market Condition Analysis - LLDPE: Geopolitical factors have led to a continuation of the contraction in cracking supply. The cost of PE has increased due to the strong performance of naphtha. There is an expected improvement in demand after the festival, but attention should be paid to the supply situation affected by maintenance and inventory [3]. - PP: Multiple raw material supplies are restricted, and the upstream operating rate has contracted. The cost support is strong, and the game between supply and demand is intensifying. Attention should be paid to the marginal changes of cracking and PDH plants under the low - profit situation [3]. 3.4 Trend Intensity - The trend intensity of LLDPE is 1, and that of PP is 1 [5].