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].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - For plastics, there is a game between high supply and cost support, and it is expected to fluctuate. In February, the maintenance intensity was insufficient, with the daily average output expected to increase by 13.2% year - on - year to 104,000 tons. In March, the planned new maintenance devices are only 1 million tons, and the supply - side pressure remains. The post - holiday inventory of the two major oil companies has risen to a neutral level, and the recovery of the agricultural film market is slow. If the recovery of the plastic film in March falls short of expectations, the industry chain may face de - stocking pressure. The supply - demand pattern is weak, and the basis has fallen to a low level, with limited upward drivers. However, the strong oil price provides cost support at the bottom. It is recommended to operate with a fluctuating mindset [4]. - For PP, the devices maintain a high level of maintenance, and there is still support at the bottom of the market. In February, the supply maintenance intensity continued to exceed expectations, with the daily average output expected to increase by 4.2% year - on - year to 110,000 tons. According to the maintenance plan, the newly planned maintenance devices in March will be 3.28 million tons. Considering that there are no new device production plans before May, the industry chain's explicit inventory and basis are at a neutral level, and there are no prominent supply - demand contradictions at present. If the demand gradually recovers, the market is expected to stop falling and stabilize. Overall, due to the strong oil price and the lack of prominent fundamental supply - demand contradictions, it is advisable to be cautious about shorting. Attention should be paid to the price changes of propane and propylene at the cost end [8]. 3. Summary by Directory 3.1 Market Review - Plastics in February fluctuated weakly and broke through the previous low. It opened 15 points higher at 7029 at the beginning of the month, rebounded to the monthly high of 7086, and then weakened significantly. After the holiday, the inventory accumulation was in line with expectations, but the upstream maintenance was insufficient. It finally fell below the support level at the end of the month, reaching a one - month low of 6553, a decline of 8% from the high at the end of January. The monthly fluctuation range was between 6553 and 7086, with an amplitude of 533 points [3][13]. - PP in February fluctuated weakly but was significantly stronger than plastics. It opened higher at 6857 at the beginning of the month, rebounded to the monthly high of 6896, and then weakened. Before the holiday, it fluctuated within a narrow range, and on the last trading day before the holiday, it fell to the monthly low of 6552 following the oil price, a decline of 6% from the high at the end of January. After the holiday, due to high - level upstream maintenance, it was strong in the olefin sector, and the LP05 spread once fell to - 28 at the end of the month. The monthly fluctuation range was between 6552 and 6896, with an amplitude of 344 points [7][13]. 3.2 Market Indicators - **Funds**: As of Thursday this week, the main contract position of PE was 550,000 lots, reaching the highest level in the same period [19]. - **Basis**: As of Thursday this week, the main - contract basis of plastics was - 128 yuan/ton, at an extremely low level; the main - contract spread of PP was - 40 yuan/ton, at a neutral level in the same period [22]. - **Monthly Spread**: As of Thursday this week, the L59 spread was - 74 yuan/ton, hitting a new low this year; the PP59 spread was - 17 yuan/ton [25]. - **Warehouse Receipts**: As of Friday this week, the number of warehouse receipts for L and PP were 9,428 and 21,679 lots respectively [28]. - **Cross - Variety**: As of Thursday this week, the LP05 spread was 179 yuan/ton, and the MTO05 spread was - 186 yuan/ton [31]. 3.3 Supply and Demand Analysis - **Supply** - **PE**: This week's PE output was 730,000 tons, with a capacity utilization rate of 88% and a cumulative year - on - year increase of 11%. In March, only Zhejiang Petrochemical, Zhong'an United, and Lanzhou Petrochemical, with a total capacity of 1 million tons, are planned for maintenance, and the overall maintenance intensity is insufficient, so the supply side is under pressure [49]. - **PP**: This week's PP output was 770,000 tons, with a capacity utilization rate of 76% and a cumulative year - on - year output increase of 5.3%. In March, the planned new maintenance devices will be 3.28 million tons, and the upstream supply is expected to maintain a high level of maintenance [51]. - **Imports and Exports** - **PE**: In 2025, the average monthly import volume of PE was 1.12 million tons (a year - on - year decrease of 3.2%); the import volume in December was 1.32 million tons (a month - on - month increase of 25% and a year - on - year decrease of 4.6%), reaching the highest level in 2025. The cumulative year - on - year changes of LL, LD, and HE were - 8.8%, 8.5%, and - 4.2% respectively. The average monthly export volume of PE in 2025 was 90,000 tons (a year - on - year increase of 29%) [54]. - **PP**: In 2025, the average monthly export volume of PP was 260,000 tons (a year - on - year increase of 29%), and the single - month export volume in December was 270,000 tons. The average monthly import volume was 280,000 tons (a year - on - year decrease of 8.3%), and the import volume in December was 330,000 tons, the highest in the whole year [55][56]. - **Downstream** - **PE**: The downstream start - up rate of PE has declined, and the start - up rate of the agricultural film industry is at a low level in the same period [57]. - **PP**: The downstream start - up rate of PP has declined [61]. - **Exports**: In 2025, the average monthly export value of plastics and products was 11.8 billion US dollars (a year - on - year increase of 0.4%), and the proportion of exports to the United States was 14% [67]. - **Inventory** - **Commercial Inventory**: This week, the commercial inventory of PE was 1.22 million tons, slightly below the neutral level in the same period; the commercial inventory of PP was 1.08 million tons, at a high level in the same period [69]. - **Petrochemical Inventory**: As of Thursday this week, the petrochemical inventory of polyolefins was 870,000 tons [71]. 3.4 Balance Sheet - **Annual Balance Sheet**: The report provides the annual supply - demand balance sheets of PE and PP from 2014 to 2026E, including data on capacity, output, import volume, export volume, apparent consumption, output year - on - year growth rate, apparent demand year - on - year growth rate, and capacity utilization rate [74]. - **Monthly Balance Sheet in 2026**: It provides the monthly supply - demand balance sheets of PE and PP in 2026, including effective capacity, capacity utilization rate, monthly output, import volume, export volume, apparent consumption, cumulative output year - on - year growth rate, and cumulative apparent consumption year - on - year growth rate [75][76]. - **Balance Sheet by Contract**: It provides the supply - demand balance sheet forecasts for PE and PP contracts such as 05, 09, and 01, including data on output, import volume, total supply, month - on - month and year - on - year changes, export volume, apparent demand, and inventory month - on - month changes [77]. 3.5 Strategy - **Plastics** - **Unilateral**: Operate with a fluctuating mindset. Pay attention to the range of 6400 - 6800 yuan/ton for L2605 [6]. - **Arbitrage**: Hold the short position of the LP05 spread [6]. - **Hedging**: Since the basis is at a low level, sell - hedge at high prices [6]. - **PP** - **Unilateral**: Be cautious about shorting. Pay attention to the range of 6450 - 6850 yuan/ton for PP2605 [9]. - **Arbitrage**: Hold the short position of the LP05 spread [9]. - **Hedging**: Since the basis is at a neutral level, operate with a fluctuating mindset [9].

1. Report Industry Investment Rating No information provided. 2. Core View of the Report - The fundamentals of the polyethylene (PE) market show a situation of strong supply and weak demand. The supply pressure is expected to increase, and the inventory is expected to rise. The demand side has limited restocking, and attention should be paid to the destocking rhythm after the downstream resumes work. The short - term cost support is strong, which boosts the price [3]. - For polypropylene (PP), geopolitical disturbances push up oil prices and propane prices, increasing the cost support. The supply is reduced in the short term, and the demand is in the off - season. The short - term cost increase still boosts the price. Attention should be paid to the geopolitical situation and the destocking rhythm of the upstream and middle - stream after the downstream resumes work [4]. 3. Summary According to the Directory 3.1 Market News and Important Data - **Price and Basis**: The closing price of the L main contract is 6,668 yuan/ton (-109), and that of the PP main contract is 6,675 yuan/ton (-45). The LL spot prices in North China and East China are 6,580 yuan/ton (-100) and 6,660 yuan/ton (-120) respectively. The PP spot price in East China is 6,650 yuan/ton (-30). The LL basis in North China is -88 yuan/ton (+9), the LL basis in East China is -8 yuan/ton (-11), and the PP basis in East China is -25 yuan/ton (+15) [1]. - **Upstream Supply**: The PE operating rate is 88.0% (-0.5%), and the PP operating rate is 75.5% (-0.4%) [1]. - **Production Profit**: The PE oil - based production profit is -215.7 yuan/ton (+13.9), the PP oil - based production profit is -555.7 yuan/ton (+13.9), and the PDH - based PP production profit is -467.7 yuan/ton (+20.3) [1]. - **Import and Export**: The LL import profit is -42.0 yuan/ton (-17.3), the PP import profit is -390.5 yuan/ton (-58.0), and the PP export profit is -62.5 US dollars/ton (-8.2) [2]. - **Downstream Demand**: The PE downstream agricultural film operating rate is 10.1% (-14.7%), the PE downstream packaging film operating rate is 24.7% (+4.4%), the PP downstream plastic weaving operating rate is 29.3% (+5.2%), and the PP downstream BOPP film operating rate is 36.7% (-6.0%) [2]. 3.2 Market Analysis - **PE**: The supply pressure is expected to increase, and the inventory is expected to rise. The demand side has limited restocking, and attention should be paid to the destocking rhythm after the downstream resumes work. The short - term cost support is strong, which boosts the price [3]. - **PP**: Geopolitical disturbances push up oil prices and propane prices, increasing the cost support. The supply is reduced in the short term, and the demand is in the off - season. The short - term cost increase still boosts the price. Attention should be paid to the geopolitical situation and the destocking rhythm of the upstream and middle - stream after the downstream resumes work [4]. 3.3 Strategy - **Unilateral**: Wait and see; in the short term, it mainly fluctuates with the cost side [5]. - **Inter - period**: Cautiously shrink the L05 - 09 spread when it is high [5]. - **Inter - variety**: Cautiously shrink the L - PP spread when it is high [5].

1. Report Industry Investment Rating - Not provided in the report 2. Core Views Plastic Part - The supply is expected to increase in January, with some production shifting back to standard products. The futures and spot markets may not continue to resonate. The market supply - demand pattern is not optimistic, and prices are under pressure. It is recommended to take a short - position on rebounds in the single - side trading, and not recommend cross - period and cross - variety trading for now [5] Polypropylene Part - The valuation has increased, leading some devices to return. The PDH has concentrated maintenance in the first quarter. The market supply - demand pattern is not optimistic, and prices are expected to fluctuate. It is also recommended to take a short - position on rebounds in the single - side trading, and not recommend cross - period and cross - variety trading for now [82][84] 3. Summary by Directory Plastic Part Price & Spread - Futures prices, spot prices, and various price spreads have changed. The basis has strengthened, and the 5 - 9 month spread has strengthened. The import window has been repaired, and the non - standard price spread has changed. The overall profit has been repaired, with significant recent repairs in ethane and externally - purchased ethylene profits [9][13][23][34] Supply - From the end of 2024 to the first half of 2025, the production capacity base has increased, with a significant increase in total supply. The current maintenance plan in Q1 is not yet available, and the supply is expected to remain loose. The import volume may remain relatively high at the end of the year and the beginning of the next year [38][40][49] Demand & Inventory - The overall downstream demand is showing signs of decline. The inventory has shifted from the upstream to the mid - stream, but the mid - stream inventory reduction has been slow [59][65][77] Polypropylene Part Price & Spread - Futures and spot prices, as well as various price spreads, have fluctuated. The basis has strengthened slightly, and the month - spread has fluctuated. The import window is approaching to open, and the non - standard price spread has changed. The overall profit is compressed [88][93][100][120] Supply - From the end of 2024 to the middle of 2025, the production capacity has increased significantly. The start - up rate has declined recently, and the maintenance volume is higher than the same period last year. The subsequent maintenance scale is considerable, and the supply is expected to decrease [128][129][140] Demand & Inventory - The downstream demand is mixed. The inventory has shifted from the upstream to the mid - stream, and the oil - based inventory has been significantly reduced [153][160][166]

1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - **Plastic**: The supply of plastic is expected to remain loose in 2026, despite some production shifts and minor decreases in supply due to maintenance. The demand from the downstream industries is entering a seasonal off - peak period, with the overall market supply - demand pattern being unfavorable. The price is likely to face pressure before the Spring Festival. The recommended strategies are to take a short position on rebounds in a sideways market, and not to recommend cross - period or cross - variety trading for now [6]. - **Polypropylene**: The polypropylene market is also under price pressure during the off - season. The supply may see marginal changes due to potential PDH plant maintenance, but the overall supply - demand situation is still not optimistic. Similar to plastic, the recommended strategies are to take a short position on rebounds in a sideways market, and not to recommend cross - period or cross - variety trading for now [92][94]. 3. Summary by Relevant Catalog Plastic Part Price & Spread - Futures and domestic spot prices have shown some fluctuations, with the 5 - 9 month spread strengthening to - 31, and the basis remaining stable. The import window has been restored, and the import profit of LD is at a relatively high level within the year [6][9]. - The upstream prices have different trends: crude oil is in a low - level oscillation, naphtha is weakly stable, ethylene monomer is weakening, and coal prices are slightly rebounding. The overall profit of PE production has been restored, especially for ethane and ethylene procurement [30][36]. Supply - In 2025, the total effective capacity of PE increased by 16%, and the domestic output increased by 18%. The current overall supply is loose. Although there are some maintenance plans in January, the maintenance plans for February and March are limited, and the supply is expected to remain relatively loose [6]. - The import of Middle East and US sources is concentrated in January, and the overall import may increase at the end of 2025 and the beginning of 2026 [6]. Demand & Inventory - The demand from the downstream industries such as agricultural film and packaging film is entering a seasonal off - peak period. The overall demand from downstream industries shows signs of decline, and the raw material demand is expected to decrease. The overall inventory of PE is not being smoothly destocked, and the confidence of the middle and lower reaches in the future market is average [6]. Polypropylene Part Price & Spread - The basis of polypropylene is weakly oscillating, and the month spread is weakening. The overall profit of production is compressed, with the PDH production valuation remaining at a low level, and the coal - based and propylene - based production processes in a loss state [94][104][129]. - The upstream prices show that crude oil is strengthening at a low level, naphtha is sideways, and propylene is strengthening. Coal prices are rebounding [121]. Supply - In 2025, the total effective capacity of PP increased by 12.7%, and the annual output increased by 16.7%. The supply center has been declining recently, and the maintenance scale in January has increased. The follow - up maintenance scale is expected to increase, and the supply may be marginally supported if the maintenance plans are fulfilled [92]. - The import volume of PP is limited in the short term, and the export volume is expected to remain at a basic level [92]. Demand & Inventory - The downstream开工率 of polypropylene is declining. Although there is some demand release during the Spring Festival period, the off - season demand is difficult to resonate. The overall inventory of PP is not being smoothly destocked, and the inventory in the middle reaches has increased significantly this week [93][94].

Report Overview - The report is a weekly report on polyolefins by Guotai Junan Futures, covering plastics and polypropylene, including price, supply, demand, inventory, and other aspects [1] Plastics Section Core Viewpoint - The price of plastics is under pressure due to ample supply and weak demand. The market is expected to remain in a pattern of increasing supply and decreasing demand before the Spring Festival, with prices under pressure. The recommended strategy is to short on rebounds [5] Price & Spread - The spot price increase is limited following the futures price rebound, leading to a weaker basis and a stronger 5 - 9 month spread. The import window is repaired, and the non - standard price difference is at a relatively high level [5][14][15] Supply - The total effective production capacity in 2025 increased by 16%, with domestic production increasing by 18%. The supply is ample due to low maintenance in Q4 and some restarts during holidays. Some standard products are being converted to non - standard products, and the import volume may remain high at the beginning of 2026 [5] Demand & Inventory - The demand for agricultural films is in a seasonal off - peak, and the demand for packaging films is short - term and limited. The overall downstream demand is expected to decline. The inventory removal is not smooth, and the social inventory removal is slowing down [5] Polypropylene Section Core Viewpoint - The polypropylene price is under pressure in the off - season. The supply may have marginal changes if PDH plants shut down as expected. The market is also likely to face a pattern of increasing supply and decreasing demand in Q4, with a pessimistic outlook [91] Price & Spread - The basis is weak and volatile, and the month spread is oscillating. The import window is approaching closure, and the export profit to Southeast Asia has limited increase [91][101][105] Supply - The total effective production capacity increased by 12.7% in 2025, with an estimated annual output increase of 16.7%. The planned maintenance at the end of the year is decreasing, but there is an expectation of PDH plant shutdowns in January. The import and export volumes are expected to remain at a basic level [91] Demand & Inventory - The downstream start - up is temporarily stable, but the orders for some industries are seasonally weakening. The inventory removal is not smooth, and the inventory is concentrated in the middle stream, with a higher year - on - year level [91] Investment Strategy Plastics - Single - side: Oscillate weakly, short on rebounds [5] - Inter - period: Not recommended for now [5] - Inter - variety: Not recommended for now [5] Polypropylene - Single - side: Oscillate weakly, short on rebounds [91] - Inter - period: Not recommended for now [91] - Inter - variety: Not recommended for now [91]

1. Industry Investment Rating - Not provided in the report 2. Core Viewpoints - For PE, in December, the overall maintenance volume of PE is not high, and the planned maintenance volume in the later period is also relatively limited. The PE start - up rate is expected to continue to rise, and a new 500,000 - ton FDPE device of BASF is expected to be put into production by the end of the year. The demand side is in a weak state with the decline of downstream start - up rates. Although the social inventory of PE is decreasing, the absolute inventory levels of LL and LD are still high, and the cost support from oil - based production is weakening. In the short term, it is difficult to have substantial improvement under the supply - demand contradiction [2]. - For PP, the supply is expected to remain at a high level as the maintenance intensity weakens and the supply may increase slightly. The profit of PDH has declined to the lowest level of the year, but the marginal device shutdown is not obvious. The downstream demand has limited order follow - up, and the overall inventory level is still high. The cost support has weakened, and the short - term rebound drive is limited [3]. - The trading strategy is to hold a wait - and - see attitude for single - sided trading with the short - term trend being weak and oscillating at the bottom. For cross - period trading, there is no recommended strategy. For cross - variety trading, it is advisable to shrink the L05 - PP05 spread when it reaches a high level [4]. 3. Summary by Directory 3.1 Market News and Important Data - **Prices and Basis**: The closing price of the L main contract is 6,543 yuan/ton (-14), and that of the PP main contract is 6,256 yuan/ton (+2). The spot prices of LL in North China and East China are 6,500 yuan/ton (+0) and 6,580 yuan/ton (+0) respectively. The spot price of PP in East China is 6,200 yuan/ton (+0). The LL basis in North China is - 43 yuan/ton (+14), in East China is 37 yuan/ton (+14), and the PP basis in East China is - 56 yuan/ton (-2) [1]. - **Upstream Supply**: The PE start - up rate is 84.1% (+0.1%), and the PP start - up rate is 78.3% (+0.7%) [1]. - **Production Profits**: The PE oil - based production profit is 231.1 yuan/ton (+47.6), the PP oil - based production profit is - 388.9 yuan/ton (+47.6), and the PDH - made PP production profit is - 774.2 yuan/ton (+43.2) [1]. - **Imports and Exports**: The LL import profit is - 105.0 yuan/ton (+7.1), the PP import profit is - 273.0 yuan/ton (+49.4), and the PP export profit is - 11.5 US dollars/ton (-0.9) [1]. - **Downstream Demand**: The PE downstream agricultural film start - up rate is 46.4% (-1.7%), the PE downstream packaging film start - up rate is 49.6% (-0.6%), the PP downstream plastic weaving start - up rate is 44.1% (+0.0%), and the PP downstream BOPP film start - up rate is 62.9% (+0.3%) [1]. 3.2 Market Analysis - **PE**: The supply is expected to increase with low maintenance and new device commissioning. The demand is weakening as the downstream start - up rates decline. The inventory pressure is still large despite the social inventory reduction. The cost support from oil prices is weakening [2]. - **PP**: The supply is expected to remain high with reduced maintenance. The demand has limited order follow - up, and the inventory level is high. The cost support has weakened [3]. 3.3 Strategy - **Single - sided**: Wait and see, with short - term weak oscillation at the bottom [4]. - **Cross - period**: No strategy [4]. - **Cross - variety**: Shrink the L05 - PP05 spread when it reaches a high level [4].

Report Overview - Report Title: Polyolefin Daily Report - Date: October 17, 2025 - Research Team: Energy and Chemical Research Team of Jianxin Futures [4] 1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints - The polyolefin market is under pressure due to the continuous imbalance between supply and demand, with supply pressure remaining difficult to ease. The market's cost - side support is weak, and it is expected to operate under pressure [6]. 3. Summary by Directory 3.1 Market Review and Outlook - Futures Market: The opening, closing, highest, lowest prices, price changes, price change rates, trading volumes, and position changes of plastic (L2601, L2605, L2609) and PP (PP2601, PP2605, PP2609) futures contracts are presented. For example, L2601 closed at 6,929 yuan/ton, up 21 yuan/ton (0.3%), and PP2601 closed at 6,618 yuan/ton, up 28 yuan/ton (0.42%) [5][6]. - Market Situation: Despite the slight increase in futures prices, the market trading atmosphere improved little. Traders sold at discounted prices, and downstream buyers mostly waited and watched. The supply - demand imbalance in the polyolefin market continued to suppress prices. Although some upstream enterprises increased maintenance due to lower - than - expected peak - season demand, the expected maintenance losses from September to November will narrow, and new production capacity is planned to be put into operation in the fourth quarter. After the holiday, social inventories increased, and the demand in October had some resilience but with limited new orders. The downstream mainly replenished inventory at low prices, and the inventory - removal pressure was high. The upward revision of the crude oil supply forecast may lead to accelerated inventory accumulation in the fourth quarter, and cost - side support is difficult to find [6]. 3.2 Industry News - Inventory: On October 16, 2025, the inventory level of major producers was 800,000 tons, a decrease of 20,000 tons (2.44%) from the previous working day, compared with 820,000 tons in the same period last year [7]. - PE Market: The PE market price declined weakly. The LLDPE prices in North China, East China, and South China were in the ranges of 6,880 - 7,170 yuan/ton, 6,950 - 7,500 yuan/ton, and 7,130 - 7,600 yuan/ton respectively [7]. - Propylene Market: The mainstream price of propylene in the Shandong market was 6,200 - 6,230 yuan/ton, a decrease of 45 yuan/ton from the previous working day. The demand for propylene weakened, and production enterprises sold at discounted prices with a poor trading atmosphere [7]. - PP Market: The PP market was mostly stable with minor fluctuations. The mainstream prices of North China, East China, and South China were in the ranges of 6,480 - 6,570 yuan/ton, 6,460 - 6,630 yuan/ton, and 6,470 - 6,650 yuan/ton respectively [7]. 3.3 Data Overview - Multiple data charts are presented, including L basis, PP basis, L - PP spread, crude oil futures settlement price, two - oil inventories, and two - oil inventory year - on - year increase/decrease rate, but specific data values are not detailed in the text [9][12][14].

1. Report Industry Investment Rating - The investment rating for polyolefins is trending weakly with oscillations [1][5][7] 2. Core Views of the Report - For polypropylene, the external environment is volatile, new production capacity offsets supply - side efforts, and the overall supply is in excess. Although there is optimism about improved trade - war situations, the high - level should be treated with caution. The key to future seasonal reversal may be the recovery of Sino - US seasonal demand driven by the Fed's interest - rate cuts [6] - For polyethylene, the easing of the conflict between Iran and Israel has led to a retracement of the premium caused by import risks. The demand is weak, but the rapid decline in social sample warehouse inventory provides short - term support. The supply pressure will gradually increase in Q3 2025, and attention should be paid to the spread changes between different types of polyethylene [8] 3. Summary by Relevant Catalogs 3.1 Overview - Polypropylene is trending weakly with oscillations. The external environment brings uncertainty, new production capacity offsets supply - side efforts, and export growth is limited [5][6] - Linear low - density polyethylene (LLDPE) is also showing a weakly oscillating trend. The macro environment affects the price premium, and supply - demand imbalance exists [7][8] - Core data shows that the spot price of both polypropylene and polyethylene has decreased compared to the previous period and the same period last year. The basis and monthly spread of both have weakened. The polypropylene's average capacity utilization has decreased, while polyethylene's has increased. The polyolefin inventory has increased slightly compared to the previous period but decreased compared to the same period last year [9] 3.2 Polypropylene Supply and Demand - **Price and Spread**: The non - standard price spread is not conducive to price rebound [17] - **Supply - Side**: New domestic production capacity is being put into operation, and more manufacturers are producing copolymer products with higher profits. The short - term overall start - up rate has declined, and there are still many overhauls in July, but new production capacity offsets the support from overhauls. The potential new production capacity in 2025 is 785.5 million tons, with a capacity increase of 15.4% [20][22][26] - **Inventory**: The production inventory has decreased, while the trader inventory has increased. The total commercial inventory has decreased slightly, mainly due to more upstream overhauls and lower downstream purchasing enthusiasm [27][31] - **Cost and Profit**: The cost has decreased due to the decline in crude oil prices. The profit of oil - based manufacturers has declined, while the profit of PDH - based production has increased [32][37] - **Downstream**: The BOPP start - up rate remains flat, with fewer orders and more finished - product inventory. The profit is at a low level due to over - capacity. The tape master - roll start - up rate, orders, and the start - up rate and orders of plastic - weaving and non - woven fabric industries have all declined. The CPP start - up rate and orders have slightly decreased [39][42][47] 3.3 Polyethylene Supply and Demand - **Spread**: The short - term L - LL spread is declining, which is negative for polyethylene. The HD - LL spread has expanded in 2025, but may oscillate later [62][65] - **Supply - Side**: The start - up rate has decreased, but the output has increased. The expected overhaul loss in July will be less than that in June. The potential new production capacity in 2025 is 613 million tons, with a capacity increase of 17.17% [66][69][70] - **Inventory**: The production - enterprise inventory has decreased, while the social inventory has increased [72] - **Cost and Profit**: The cost has decreased due to the decline in crude oil prices, and the profit of oil - based production devices has declined [76][82] - **Downstream**: The start - up rate and orders of the agricultural film industry have decreased. The start - up rate and orders of the packaging film industry have increased. The start - up rates of the pipe and hollow industries are lower than the same period last year [84][85][86]

Report Industry Investment Rating - No industry investment rating is provided in the report. Core Viewpoints - The fundamentals of polyolefins maintain a supply - exceeding - demand pattern, and the futures market shows narrow - range fluctuations. The petrochemical inventory is accumulating, while downstream factories have strong restocking efforts, leading to a slow reduction in upstream factory inventory and trader inventory. During the petrochemical plant maintenance season, there are many planned maintenance devices, and several previously shut - down devices are expected to restart soon, resulting in an upward trend in supply and some supply pressure. It is currently the traditional off - season for polyolefin downstream demand. The agricultural film operating rate continues to decline, and the operating rates of other end - users fluctuate weakly. End - user factories have low enthusiasm for raw material procurement, mainly making rigid - demand purchases. The international crude oil price is on the rise, strengthening the cost support for polyolefins. There is still cost - side support for PDH - made PP, and with the decline in propane prices, the operating rate of PDH - made PP has increased slightly [2]. Summary by Related Catalog I. Market Analysis - **Price and Basis**: The closing price of the L main contract is 7,078 yuan/ton (+12), and that of the PP main contract is 6,932 yuan/ton (+7). The LL spot price in North China is 7,090 yuan/ton (+0), and in East China is 7,100 yuan/ton (+0). The PP spot price in East China is 7,070 yuan/ton (-10). The LL basis in North China is 12 yuan/ton (-12), in East China is 22 yuan/ton (-12), and the PP basis in East China is 138 yuan/ton (-17) [1]. - **Upstream Supply**: The PE operating rate is 77.4% (+0.6%), and the PP operating rate is 77.0% (+1.6%) [1]. - **Production Profit**: The PE oil - based production profit is 207.1 yuan/ton (-80.1), the PP oil - based production profit is - 52.9 yuan/ton (-80.1), and the PDH - made PP production profit is - 164.9 yuan/ton (+7.4) [1]. - **Imports and Exports**: The LL import profit is - 310.6 yuan/ton (+9.4), the PP import profit is - 460.1 yuan/ton (+52.8), and the PP export profit is 14.6 US dollars/ton (-1.2) [1]. - **Downstream Demand**: The operating rate of the PE downstream agricultural film is 12.9% (-0.1%), the operating rate of the PE downstream packaging film is 48.9% (+0.3%), the operating rate of the PP downstream plastic weaving is 44.7% (-0.5%), and the operating rate of the PP downstream BOPP film is 60.4% (+0.7%) [1]. II. Strategy - **Unilateral**: Be cautiously bearish on plastics [3]. - **Inter - period**: No inter - period strategy is provided [3].