Report Overview - Report Title: Polyolefin Weekly Report [1] - Report Date: January 11, 2026 [2] - Analyst: Zhou Fuqiang [2] Investment Rating The report does not mention the industry investment rating. Core Views PE - The supply of PE is expected to remain relatively loose in the future, with increased imports at the end of 2025 and the beginning of 2026. The demand from downstream industries such as agricultural films and packaging films is in a seasonal off - peak period, and the market supply - demand pattern is not optimistic. The price is under pressure before the Spring Festival [5][6]. - The cost - side support for PE is average, and the inventory de - stocking is not smooth. The market is in a pattern of increasing supply and decreasing demand, and the price is expected to fluctuate, with a suggestion of shorting on rebounds [6]. PP - In the off - season, the PP price is under pressure. The supply center has declined recently, and the Q1 PDH device maintenance plan has increased. The import and export volumes are expected to remain at a basic level in the short term [92]. - The downstream demand is mixed, with some industries showing weakening demand and others having certain support. The overall inventory de - stocking is not smooth, and the market supply - demand pattern is not optimistic. It is recommended to short on rebounds [93][94]. Summary by Directory PE Section Price & Spread - The futures price of PE has shown a strong and volatile trend, with the basis remaining stable, and the 5 - 9 month spread strengthening to - 31. The production profit of different processes has different degrees of change, with the oil - based profit at - 520 (+30), and the coal - based at - 80(+70) [6]. - The domestic and overseas prices and spreads of PE have changed, with the Chinese arrival price increasing by 10 - 30 dollars, and the import window gradually opening [15][24]. Supply - In 2025, the total effective capacity growth rate of PE was 16%, and the domestic production growth rate was 18%. The overall start - up rate was 83.7% (+0.4%). Although there were some maintenance and production conversions, the supply was still relatively high [6]. - The import of PE is expected to increase at the end of 2025 and the beginning of 2026, and the new order imports are relatively cautious [6]. Demand & Inventory - The demand from downstream industries such as agricultural films and packaging films is in a seasonal off - peak period, with the agricultural film start - up rate decreasing and the demand for raw materials expected to decrease [6]. - The inventory de - stocking of PE is not smooth, with the social inventory de - stocking slowing down, and attention should be paid to whether the inventory can be transferred downstream [6]. PP Section Price & Spread - The basis of PP is weakly volatile, and the month spread is weakening. The production profit of different processes is under pressure, with the oil - based profit at - 1300 (+10), and the coal - based at - 220(-50) [94]. - The Chinese arrival price of PP has rebounded, and the import window is tending to open, but the export profit to Southeast Asia has limited increase [108]. Supply - In 2025, the total effective capacity growth rate of PP was 12.7%, and the annual production growth rate was 16.7%. The Q1 PDH device maintenance plan has increased, and the supply center has declined [92]. - The PP import volume is expected to be limited in the short term, and the export volume is also restricted by factors such as freight and overseas demand, and is expected to remain at a basic level [92]. Demand & Inventory - The downstream start - up rate of PP has declined, but the demand for some industries such as BOPP films is relatively good. The overall inventory de - stocking is not smooth, and the inventory is relatively high compared to the same period [93][94].

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints - Polyolefins are expected to have limited upside and a weakening oscillation. In December, constrained by continuous supply and weak demand, polyolefin prices repeatedly sought the bottom. Although the downstream demand for PP increased and the BOPP operation rate rebounded, the decline in the PP main contract futures price was smaller than that of PE. Due to intensified geopolitical conflicts in Venezuela during the holiday, the crude oil price on the cost side may be affected. In Q1 2026, the production of polyolefins will slow down, and the expectation of supply reduction will drive the price of polyolefins to rebound. However, overall, the demand improvement is insufficient, and the upside space is still expected to be limited. It is expected that the PE main contract will oscillate weakly within a range, with attention to the support at 6400, and the PP main contract will oscillate weakly, with attention to the support at 6300. The LP spread is expected to widen [8]. - Plastics still face supply - demand contradictions and are expected to oscillate. The prices of various types of plastics, such as LDPE, HDPE, and LLDPE, have decreased to varying degrees. The LLDPE South China basis and the 1 - 5 month spread have also changed. The cost of plastics is affected by factors such as the prices of WTI crude oil and Brent crude oil, and the profit of oil - based and coal - based PE has different trends. The supply side shows a decrease in the production start - up rate and weekly output of polyethylene, while the demand side shows a decline in the start - up rates of downstream industries such as agricultural film and packaging film [8][11][22]. - PP is under great trend pressure and is expected to oscillate weakly in the short term. The price of the PP main contract has decreased, and the prices of related products have also changed. The cost of PP is affected by the prices of WTI crude oil and Brent crude oil, and the profit of oil - based and coal - based PP has decreased. The supply side shows a decrease in the start - up rate of PP petrochemical enterprises and the weekly output of PP pellets, while the demand side shows different trends in the start - up rates of downstream industries such as plastic weaving, BOPP, injection molding, and pipes [52][58][75]. 3. Summary by Relevant Catalogs 3.1 Plastics 3.1.1 Weekly Market Review - On December 31st, the closing price of the plastic main contract was 6472 yuan/ton, with a month - on - month decrease of 4.67%. The average price of LDPE was 8400 yuan/ton, a month - on - month decrease of 6.67%; the average price of HDPE was 6862.50 yuan/ton, a month - on - month decrease of 7.71%; and the average price of LLDPE (7042) in South China was 6518.33 yuan/ton, a month - on - month decrease of 9.30%. The LLDPE South China basis was 46.33 yuan/ton, a month - on - month decrease of 88.40%, and the 1 - 5 month spread was - 202 yuan/ton (- 134) [11]. 3.1.2 Key Data Tracking - **Month - to - Month Spread**: The 1 - 5 month spread on December 31, 2025, was - 202 yuan/ton, a decrease of 134 yuan/ton compared to November 28, 2025; the 5 - 9 month spread was - 37 yuan/ton, a decrease of 12 yuan/ton; and the 9 - 1 month spread was 239 yuan/ton, an increase of 146 yuan/ton [16]. - **Spot Price**: The spot prices of different plastics in various regions have different trends and fluctuations. For example, in the Northeast region, the price of HDPE film remained unchanged, while in the North China region, the price of some types of plastics decreased [19]. - **Cost**: In December, WTI crude oil was reported at 57.41 US dollars/barrel, a decrease of 1.07 US dollars/barrel compared to the previous month, and Brent crude oil was reported at 60.91 US dollars/barrel, a decrease of 1.41 US dollars/barrel. The price of anthracite at the Yangtze River port was 1070 yuan/ton (- 50) [22]. - **Profit**: The profit of oil - based PE was - 668 yuan/ton, a decrease of 331 yuan/ton compared to the previous month, and the profit of coal - based PE was - 207 yuan/ton, an increase of 30 yuan/ton compared to the previous month [28]. - **Supply**: The production start - up rate of polyethylene in China this month was 82.64%, a decrease of 1.87 percentage points compared to the end of the previous month. The weekly output of polyethylene was 67.22 tons, a month - on - month decrease of 1.84%. The weekly maintenance loss was 11.09 tons, an increase of 2.41 tons compared to the previous week [33]. - **2026 Production Plan**: Multiple companies have production plans for 2026, with a total planned production capacity of 550 tons [36]. - **Maintenance Statistics**: Many enterprises' plastic production lines have been shut down, and the restart time of some production lines is undetermined [37]. - **Demand**: The overall start - up rate of domestic agricultural film this week was 38.95%, a decrease of 10.09% compared to the end of the previous month; the start - up rate of PE packaging film was 48.41%, a decrease of 2.29% compared to the end of the previous month; and the start - up rate of PE pipes was 30.17%, a decrease of 1.66% compared to the end of the previous month [39]. - **Downstream Production Ratio**: Currently, the production ratio of linear film is the highest, accounting for 34.2%, and the difference from the annual average level is 1%. The difference between the current proportion of low - pressure drawing and the annual average data is obvious, currently accounting for 5%, and the difference from the annual average level is 1% [43]. - **Inventory**: This week, the social inventory of plastic enterprises was 47.51 tons, an increase of 0.85 tons compared to the end of the previous month, a month - on - month increase of 0.76% [45]. - **Warehouse Receipts**: The number of polyethylene warehouse receipts was 11,353 lots, a decrease of 193 lots compared to the end of the previous month [48]. 3.2 PP 3.2.1 Weekly Market Review - On December 31st, the closing price of the PP main contract was 6348 yuan/ton, a decrease of 61 yuan/ton compared to the end of the previous month, a month - on - month decrease of 0.95% [52]. 3.2.2 Key Data Tracking - **Downstream Spot Price**: The prices of PP - related products such as PP pellets, PP powder, and PE have different trends. For example, the price of PP pellets (T30S) remained unchanged on January 4, 2026, while the price of PE (7042) increased by 50 yuan/ton [56]. - **Basis**: On December 31st, the spot price of PP reported by Shengyi.com was 6170 yuan/ton (- 3.04%). The PP basis was - 178 yuan/ton (- 132), and the 1 - 5 month spread was - 40 yuan/ton (- 19) [58]. - **Cost**: Similar to plastics, the cost is affected by the prices of WTI crude oil and Brent crude oil [67]. - **Profit**: The profit of oil - based PP was - 632.49 yuan/ton, a decrease of 34.23 yuan/ton compared to the end of the previous month, and the profit of coal - based PP was - 582.64 yuan/ton, a decrease of 2.84 yuan/ton compared to the end of the previous month [75]. - **Supply**: This week, the start - up rate of Chinese PP petrochemical enterprises was 76.87%, a decrease of 1.27 percentage points compared to the end of the previous month. The weekly output of PP pellets reached 79.37 tons, a week - on - week decrease of 2.99%, and the weekly output of PP powder reached 6.79 tons, a week - on - week increase of 1.88% [78]. - **Maintenance Statistics**: Many PP production lines of enterprises have been shut down, and the restart time of some production lines is undetermined [82]. - **Demand**: This week, the average start - up rate of downstream industries was 53.24% (- 0.33). The start - up rate of plastic weaving was 43.74% (- 0.36%), the start - up rate of BOPP was 63.24% (+ 0.64%), the start - up rate of injection molding was 58.35% (- 0.51%), and the start - up rate of pipes was 39.74% (- 2.44%) [84]. - **Import and Export Profits**: This week, the PP import profit was - 330.70 US dollars/ton, a decrease of 83.74 US dollars/ton compared to the previous month, and the export profit was - 3.74 US dollars/ton, an increase of 8.57 US dollars/ton compared to the previous month [88]. - **Inventory**: This week, the domestic PP inventory was 49.07 tons (- 7.99%); the inventory of the two major oil companies decreased by 8.04% month - on - month; the inventory of traders decreased by 5.34% month - on - month; and the port inventory decreased by 3.49% month - on - month. The finished product inventory of large - scale plastic - weaving enterprises was 1004.70 tons, a month - on - month decrease of 0.73%, and the BOPP raw material inventory was 10.42 days, a month - on - month increase of 0.58% [90][94]. - **Warehouse Receipts**: The number of PP warehouse receipts was 15,445 lots, a decrease of 421 lots compared to the end of the previous month [98].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report Plastic - This week, the supply elasticity of price reduction has not been realized yet. At the end of the year, the supply increases while the demand weakens, putting pressure on prices. The Q4 may gradually enter a pattern of increasing supply and decreasing demand, and the price is under pressure [5]. Polypropylene - In the off - season, the price is under pressure, and there may be marginal changes in PDH on the supply side. The Q4 may gradually enter a pattern of increasing supply and decreasing demand, and the market supply - demand pattern is still not optimistic [92]. Summary by Directory Plastic Part Price & Spread - The basis has not strengthened significantly. The low price in North China has continued to decline, and East and South China have made up for the decline. The 5 - 9 month spread fluctuates around - 50, and the warehouse receipts remain high at a stable level. The import window is compressed, and the non - standard import profit is at a relatively high level within the year [5]. Supply - The total effective capacity growth rate is 16%. The domestic production volume growth rate is 18% in the first half of the year. The current maintenance scale in December has declined. It is expected that the supply will remain in a loose state. The import volume may still be high at the end of 2025 and the beginning of 2026 [5]. Demand & Inventory - The agricultural film start - up rate continues to decline, and the packaging film festival effect has gradually subsided. The downstream raw material inventory is maintained at a low level, and the demand for raw materials is expected to decrease. The inventory removal of the PE as a whole is not smooth, the upstream factory inventory has accumulated slightly, and the social inventory has decreased slightly [5]. Polypropylene Part Price & Spread - The basis fluctuates weakly, and the month spread strengthens slightly. The overseas price of PP rebounds and then falls back, and the import window tends to close [94]. Supply - The total effective capacity growth rate is 12.7%, and the estimated annual output growth rate is 16.7%. The planned maintenance volume at the end of the year declines, and the supply center is high. The short - term PP import volume is limited, and the export volume is expected to maintain the basic level in the short term [92]. Demand & Inventory - The downstream start - up rate is temporarily stable, but the orders of plastic weaving, pipes and other industries have weakened seasonally. The downstream is mainly digesting inventory, and the raw material procurement is sluggish. The inventory removal of PP as a whole is not smooth, and the inventory is higher than the same period of last year [93].

Report Information - Report Title: Polyolefin Morning Report - Date: December 18, 2025 - Author: Jin Zebin from Dayue Futures Investment Consulting Department [2][3] Industry Investment Rating - Not provided in the report Core Viewpoints - The LLDPE and PP main contracts have weak disk trends, with oversupply in the fundamentals, neutral industrial inventories, and weakening downstream demand. It is expected that both LLDPE and PP will show volatile trends today [4][6] Summary by Relevant Catalogs LLDPE Overview - **Fundamentals**: In November, the official PMI was 49.2, up 0.2 points from the previous month, indicating stable manufacturing sentiment. OPEC+ decided to maintain the production plan set in early November, with a 137,000 barrels per day increase in December and a suspension of the increase plan from January to March 2026. Coal prices have declined, and coal - based production profits have stabilized. The demand for agricultural films is relatively stable, while the demand for packaging films has weakened after the peak season. The current spot price of LLDPE delivery products is 6460 (-60), and the overall fundamentals are bearish [4] - **Basis**: The basis of the LLDPE 2601 contract is -19, with a premium/discount ratio of -0.3%, which is neutral [4] - **Inventory**: The comprehensive PE inventory is 523,000 tons (+15,000 tons), which is bearish [4] - **Disk**: The 20 - day moving average of the LLDPE main contract is downward, and the closing price is below the 20 - day line, which is bearish [4] - **Main Position**: The net long position of the LLDPE main contract is decreasing, which is bullish [4] - **Expectation**: The LLDPE main contract has a weak disk trend, with oversupply in the fundamentals, neutral industrial inventories, and weakening downstream demand. It is expected to show a volatile trend today [4] - **Likely Factors**: Cost support [5] - **Negative Factors**: Weak downstream demand year - on - year and a large number of new production capacities in the fourth quarter [5] - **Main Logic**: Oversupply and domestic macro - policies [5] PP Overview - **Fundamentals**: In November, the official PMI was 49.2, up 0.2 points from the previous month, indicating stable manufacturing sentiment. OPEC+ decided to maintain the production plan set in early November, with a 137,000 barrels per day increase in December and a suspension of the increase plan from January to March 2026. Coal prices have declined, and coal - based production profits have stabilized, while PDH profits have continued to decline with the strong propane price. The overall demand for plastic weaving has entered the off - season and declined, while the demand for pipes is acceptable. The current spot price of PP delivery products is 6250 (-0), and the overall fundamentals are bearish [6] - **Basis**: The basis of the PP 2601 contract is -4, with a premium/discount ratio of -0.1%, which is neutral [6] - **Inventory**: The comprehensive PP inventory is 538,000 tons (+1000 tons), which is bearish [6] - **Disk**: The 20 - day moving average of the PP main contract is downward, and the closing price is below the 20 - day line, which is bearish [6] - **Main Position**: The net short position of the PP main contract is increasing, which is bearish [6] - **Expectation**: The PP main contract has a weak disk trend, with oversupply in the fundamentals, the propane price driving the disk, neutral industrial inventories, and weakening downstream demand. It is expected to show a volatile trend today [6] - **Likely Factors**: Cost support [7] - **Negative Factors**: Weak downstream demand year - on - year and a large number of new production capacities in the fourth quarter [7] - **Main Logic**: Oversupply and domestic macro - policies [7] Spot and Futures Market and Inventory Data - **LLDPE**: The spot price of delivery products is 6460 (-60), the price of the 05 contract is 6479 (-64), the basis is -19 (+4), the number of warehouse receipts is 11332 (0), the comprehensive PE factory inventory is 523,000 tons (+15,000 tons), and the social PE inventory is 469,000 tons (+12,000 tons) [8] - **PP**: The spot price of delivery products is 6250 (0), the price of the 05 contract is 6254 (-2), the basis is -4 (+2), the number of warehouse receipts is 10730 (-4383), the comprehensive PP factory inventory is 538,000 tons (+1000 tons), and the social PP inventory is 305,000 tons (-10,000 tons) [8] Supply - Demand Balance Sheets - **Polyethylene**: From 2018 to 2024, the production capacity, output, and apparent consumption generally showed an increasing trend. In 2025E, the production capacity is expected to be 4319.5, with a growth rate of 20.5% [13] - **Polypropylene**: From 2018 to 2024, the production capacity, output, and apparent consumption generally showed an increasing trend. In 2025E, the production capacity is expected to be 4906, with a growth rate of 11.0% [15]

Report Overview - The report is a weekly report on polyolefins by Guotai Junan Futures, covering the plastic and polypropylene sectors, including price, supply, demand, and inventory analysis [1][3] 1. Report Industry Investment Rating - Not provided in the report 2. Report Core Viewpoints Plastic - The price of plastic is under pressure due to the expected increase in supply and decrease in demand at the end of the year, with a recommended strategy of shorting on rebounds [5] Polypropylene - The price of polypropylene is also under pressure in the off - season, with a recommended strategy of shorting on rebounds [94][96] 3. Summary by Directory Plastic Part Price & Spread - Domestic and foreign prices of PE have generally declined, with the Chinese CIF price down by $5 - 10. The import window has compressed, and the LD import profit is at a relatively high level this year [9][19] - The production profit of PE has been compressed, with the profit of ethylene procurement significantly reduced recently, while the profits of MTO, coal - based, and naphtha - based production have slightly improved [40] Supply - The total effective capacity growth rate is 16%, and the domestic production growth rate is 18%. Although the import has declined year - on - year, the supply is still loose. The subsequent maintenance scale is expected to decline, and the supply is expected to increase in December [5] Demand & Inventory - The demand for PE is weak. The agricultural film start - up rate has continued to decline, and the demand from other downstream industries is also expected to decrease slightly. The inventory removal is not smooth, with the upstream inventory accumulating slightly and the social inventory decreasing slightly [5] Polypropylene Part Price & Spread - The domestic and foreign prices of PP have declined. The CIF price in China has rebounded and then declined. The import window is approaching closure [100][110] - The overall profit of PP production has been compressed, with the PDH and propylene - based production valuations being the most significantly compressed, while the coal - based process profit has slightly improved [130] Supply - The total effective capacity growth rate is 12.7%, and the estimated annual production growth rate is 16.7%. The end - of - year planned maintenance volume is declining, and the supply center is high. The subsequent maintenance scale is expected to decline, and the supply is expected to increase [94] Demand & Inventory - The downstream start - up of PP is temporarily stable, but the orders of some industries are seasonally weakening. The inventory removal is not smooth, and the inventory is higher than the same period last year [95][96]

1. Report Industry Investment Rating - No information provided in the content 2. Core Viewpoints of the Report - The LLDPE and PP markets are expected to show oscillatory trends today. The fundamentals of both are generally bearish, with oversupply situations. However, the strengthening propane prices are driving the market rebound. The downstream demand for both is relatively weak, and there are new productions coming on - stream in the fourth quarter. But they also have cost support [4][6] 3. Summary by Related Catalogs LLDPE Overview - **Fundamentals**: In October, the official PMI was 49, a 0.8 - point decline from the previous month, indicating a drop in manufacturing prosperity. OPEC+ decided to maintain the November production plan, increasing production by 137,000 barrels per day in December and suspending the increase from January to March 2026. Coal prices have fallen, improving coal - based profits. The Russia - Ukraine peace agreement has faced short - term setbacks, and oil prices are oscillating strongly. The demand for agricultural films is weak, and packaging film demand is mainly based on rigid needs, with some areas improving. The current LLDPE delivery spot price is 6680 (-60), and the overall fundamentals are bearish [4] - **Basis**: The basis of the LLDPE 2601 contract is 6, with a premium - discount ratio of 0.1%, which is neutral [4] - **Inventory**: The comprehensive PE inventory is 497,000 tons (-4000), which is bearish [4] - **Market**: The 20 - day moving average of the LLDPE main contract is downward, and the closing price is below the 20 - day line, which is bearish [4] - **Main Position**: The net long position of the LLDPE main contract is decreasing, which is bullish [4] - **Expectation**: The LLDPE main contract is oscillating and rebounding. The fundamentals show oversupply, but the strengthening propane prices are driving the market. The industrial inventory is neutral, and the downstream demand has declined. It is expected that PE will show an oscillatory trend today [4] - **Likely Factors**: Cost support is a bullish factor, while weak downstream demand year - on - year and new productions coming on - stream in the fourth quarter are bearish factors. The main logic is oversupply and domestic macro - policies [5] PP Overview - **Fundamentals**: Similar to LLDPE, the macro - situation shows a decline in manufacturing prosperity. In the supply - demand aspect, the demand for plastic weaving has entered the off - season and declined, while the demand for pipes is acceptable. The current PP delivery spot price is 6350 (-10), and the overall fundamentals are bearish [6] - **Basis**: The basis of the PP 2601 contract is 63, with a premium - discount ratio of 1.0%, which is bullish [6] - **Inventory**: The comprehensive PP inventory is 565,000 tons (+19000), which is bearish [6] - **Market**: The 20 - day moving average of the PP main contract is downward, and the closing price is below the 20 - day line, which is bearish [6] - **Main Position**: The net short position of the PP main contract is increasing, which is bearish [6] - **Expectation**: The PP main contract is oscillating and rebounding. The fundamentals show oversupply, and the strengthening propane prices are driving the market. The industrial inventory is neutral, and the downstream demand is average. It is expected that PP will show an oscillatory trend today [6] - **Likely Factors**: Cost support is a bullish factor, while weak downstream demand year - on - year and new productions coming on - stream in the fourth quarter are bearish factors. The main logic is oversupply and domestic macro - policies [7] Spot and Futures Market Data - **LLDPE**: The spot delivery price is 6680 (-60), and the 01 - contract price is 6674 (-102). The basis is 6. The warehouse receipt is 11,332 (unchanged) [8] - **PP**: The spot delivery price is 6350 (-10), and the 01 - contract price is 6287 (-72). The basis is 63. The warehouse receipt is 15,722 (-146) [8] Supply - Demand Balance Sheets - **Polyethylene**: From 2018 to 2024, the production capacity has been increasing, with a planned 20.5% growth in 2025E. The production, net import, and apparent consumption have also shown certain trends, and the import dependence has generally decreased [13] - **Polypropylene**: From 2018 to 2024, the production capacity has been growing, with an expected 11.0% growth in 2025E. The production, net import, and apparent consumption have their own trends, and the import dependence has decreased [15]

1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - For LLDPE, the overall fundamentals are bearish, but with cost support. The market is expected to fluctuate today due to factors such as supply - demand imbalance and propane price increase [4][5]. - For PP, the overall fundamentals are bearish, also with cost support. The market is predicted to be volatile today considering supply - demand situation and propane price [6][7]. 3. Summary by Related Catalogs LLDPE - **Fundamentals**: In October, the official PMI was 49, down 0.8 percentage points from the previous month. OPEC + decided to maintain the November production plan, increasing production by 137,000 barrels per day in December and suspending the increase from January to March 2026. Propane price increase drives up polyolefin prices. Agricultural film demand is declining, and packaging film is mainly for rigid demand. The current LLDPE delivery product spot price is 6,740 (-80), with overall bearish fundamentals [4]. - **Basis**: The basis of LLDPE 2601 contract is - 36, with a premium - discount ratio of - 0.5%, considered neutral [4]. - **Inventory**: PE comprehensive inventory is 497,000 tons (-4,000), which is bearish [4]. - **Disk**: The 20 - day moving average of the LLDPE main contract is downward, and the closing price is below the 20 - day line, indicating a bearish trend [4]. - **Main Position**: The net long position of the LLDPE main contract is decreasing, which is bullish [4]. - **Expectation**: The LLDPE main contract is expected to fluctuate today, with an oversupply situation, propane price increase driving the market, neutral industrial inventory, and declining downstream demand [4]. - **Likely and Unlikely Factors**: Bullish factor is cost support; bearish factors are weak downstream demand year - on - year and more new production in the fourth quarter. The main logic is oversupply and domestic macro - policies [5]. PP - **Fundamentals**: Similar to LLDPE in terms of macro and OPEC + decisions. Propane price increase and low PDH profit drive up polyolefin prices. Plastic weaving seasonal demand is declining, while pipe demand is okay. The current PP delivery product spot price is 6,360 (-20), with overall bearish fundamentals [6]. - **Basis**: The basis of PP 2601 contract is 1, with a premium - discount ratio of 0.0%, considered neutral [6]. - **Inventory**: PP comprehensive inventory is 565,000 tons (+19,000), which is bearish [6]. - **Disk**: The 20 - day moving average of the PP main contract is downward, and the closing price is below the 20 - day line, indicating a bearish trend [6]. - **Main Position**: The net short position of the PP main contract is decreasing, which is bearish [6]. - **Expectation**: The PP main contract is expected to fluctuate today, with an oversupply situation, propane price increase driving the market, neutral industrial inventory, and average downstream demand [6]. - **Likely and Unlikely Factors**: Bullish factor is cost support; bearish factors are weak downstream demand year - on - year and more new production in the fourth quarter. The main logic is oversupply and domestic macro - policies [7]. Spot and Futures Market and Inventory - **LLDPE**: The spot delivery product price is 6,740 (-80), the 01 contract price is 6,776 (-32), the basis is - 36 (-48). PE comprehensive factory inventory is 497,000 tons (-4,000), and social inventory is 486,000 tons (+15,000) [8]. - **PP**: The spot delivery product price is 6,360 (-20), the 01 contract price is 6,359 (-23), the basis is 1 (3). PP comprehensive factory inventory is 565,000 tons (+19,000), and social inventory is 325,000 tons (+17,000) [8]. Supply - Demand Balance Sheet - **Polyethylene**: From 2018 - 2024, the capacity, production, net import, and apparent consumption have shown different growth trends. The import dependence has gradually decreased. In 2025E, the capacity is expected to be 4,319,500 tons, with a growth rate of 20.5% [13]. - **Polypropylene**: From 2018 - 2024, the capacity, production, net import, and apparent consumption have also changed. The import dependence has generally decreased. In 2025E, the capacity is expected to be 4,906,000 tons, with a growth rate of 11.0% [15].

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The valuation of polyolefins is at a relatively low level, and polyolefins tend to fluctuate at the bottom. In December, the supply will increase while the demand will weaken, resulting in high pressure to transfer inventory downstream. However, since the monthly spread is already at the lowest level in the past five years, if the crude oil price remains relatively stable, polyolefins will tend to fluctuate at the bottom [3][4] 3. Summary According to the Table of Contents 3.1 Supply: 12 - month refinery maintenance decreases, and supply gradually rebounds - **PE**: In November, the number of unit overhauls decreased, and the capacity utilization rate increased slightly. In December, the overhauls remained low. The 500,000 - ton/year low - pressure unit of BASF is planned to be put into production at the end of the year, with limited impact on linear PE. The PE output is expected to be around 2.75 million tons [3] - **PP**: In November, the number of overhauled units decreased, and the capacity utilization rate remained relatively stable at around 78%. The output increased significantly year - on - year, and the domestic supply was relatively sufficient. In December, although there were no new units, the overhauled units resumed production one after another, and the output is expected to increase to around 3.3 million tons [3] 3.2 Demand: Demand gradually weakens in December - **PE**: In November, it was the peak season for agricultural film demand, and the start - up rate remained high, but the start - up rates of other downstream industries began to decline. In December, the demand for agricultural film entered the off - season, and the demand is expected to continue to decline [3][19] - **PP**: In December, the traditional demand is expected to enter the off - season. Plastic weaving and injection molding manufacturers are affected by the winter consumption off - season, with fewer orders and cautious procurement. The demand is expected to decline [3][26] 3.3 Inventory: Refineries actively reduce inventory, downstream purchases on a just - in - time basis, and the pressure to reduce inventory remains high - **PE**: At the end of November, the overall social inventory was at a normal level, and the petrochemical inventory was slightly higher than that of the same period last year. It is still in the stage of active inventory reduction [3][37] - **PP**: The supply is at a high level. Although refineries actively reduce inventory, downstream purchases on a just - in - time basis, and the total inventory has increased significantly year - on - year. The pressure to reduce inventory in December remains high [3][53] 3.4 Spread: Basis weakens - **LLDPE**: The basis strengthens slightly, and the monthly spread rebounds slightly but is at the lowest level in the past five years due to high supply pressure [62][69] - **PP**: The basis strengthens, and the monthly spread continues to weaken due to high supply pressure [81][87] 3.5 Profit: Coal - based profits weaken, and oil - based profits fluctuate slightly - **PE**: Both oil - based and coal - based production profits have declined [101] - **PP**: The production profits from different raw materials show different trends, and the overall situation is complex [106]

Report Industry Investment Rating No relevant content provided. Core View of the Report - In December 2025, the fundamentals of polyolefins remain weak, and the boost from fundamentals to polyolefins may still be limited. Future focus should be on the macro - level. If macro - level policies are positive, polyolefins have the opportunity to rebound [6]. Summary by Related Catalogs Macro - level Domestic - In October 2025, the year - on - year growth rate of broad money M2 was 8.2%, 0.2 percentage points lower than at the end of the previous month. New RMB loans in October were 220 billion, a year - on - year decrease of 280 billion. In November, the Manufacturing Purchasing Managers' Index (PMI) was 49.2%, up 0.2 percentage points from the previous month [7]. - In October 2025, the national consumer price index rose 0.2% year - on - year and 0.2% month - on - month. The ex - factory price of industrial producers decreased 2.1% year - on - year, with the decline narrowing by 0.2 percentage points from the previous month; it changed from flat to a 0.1% increase month - on - month [8]. - From January to October 2025, national real estate development investment was 735.63 billion yuan, a year - on - year decrease of 14.7%. The sales area of newly built commercial housing was 719.82 million square meters, a year - on - year decrease of 6.8%, and the sales volume was 690.17 billion yuan, a decrease of 9.6%. The funds in place for real estate development enterprises were 788.53 billion yuan, a year - on - year decrease of 9.7%. In October, the real estate development climate index was 92.43 [10][12]. International - Affected by the U.S. government shutdown, the U.S. CPI for October 2025 was not released on time. The CPI in September rose 0.1% from the previous month to 3%. The eurozone's CPI in October 2025 decreased 0.1% from the previous month to 2.1%. Both U.S. and European inflation have dropped to relatively low levels, which is conducive to further interest rate cuts to boost the economy [13]. - After the Federal Reserve lowered the federal funds rate to 3.75% - 4.00%, it may further cut interest rates in December due to concerns about weak employment. The eurozone's main refinancing rate has dropped to 2.15% [15]. - High tariffs and high interest rates still have a certain negative impact on the U.S. economy, but the U.S. economy remains resilient. In October, the U.S. manufacturing PMI decreased 0.4 percentage points from the previous month to 48.7%, while the service industry PMI rose 2.4 percentage points to 52.4% [16]. Fundamentals PE - In November 2025, the production and capacity utilization rate of polyethylene increased. The capacity utilization rate was 83.31%, up 1.3 percentage points from the previous period, and the output was 2.8866 million tons, up 0.1 percentage points. The increase in output was mainly due to a 13.35% decrease in maintenance volume and the commissioning of a new device at Guangxi Petrochemical [19]. - In November 2025, the overall downstream operating rate of polyethylene was 44.59%, a decrease of 0.33% from the previous month. The fundamentals of PE packaging film declined month - on - month, with the operating rate dropping 1.56% month - on - month. The overall operating rate of agricultural film increased 7.9% month - on - month [20]. - In November 2025, the social inventory of polyethylene decreased. At the end of the month, the social sample warehouse inventory was 471,100 tons, a decrease of 56,300 tons from the previous month. Low prices drove sales and increased the frequency of terminal purchases [24]. PP - In November 2025, the total production of polypropylene in China was 3.4694 million tons, a month - on - month decrease of 0.98%. Although a new 400,000 - ton/year device at Guangxi Petrochemical Phase II was put into operation, the total production decreased slightly due to one less day in the month [27]. - In November 2025, the estimated consumption of polypropylene in China was 3.4894 million tons, a month - on - month decrease of 1.48%. The average downstream operating rate was 53.30%, a month - on - month increase of 1.38%, mainly driven by e - commerce promotions and new energy vehicle promotion policies [30]. - At the end of November 2025, the inventory of polypropylene production enterprises was 546,300 tons, a decrease of 8.2% from the end of the previous month. The inventory of polypropylene traders was 200,500 tons, a decrease of 6.16% from the end of the previous month [33]. Market Outlook PE - In December 2025, the supply pressure of polyethylene is expected to remain. The demand for agricultural film will enter the off - season, the operating rate of the packaging industry may continue to decline, and the infrastructure demand in the pipe industry will decrease. The cost support will further weaken, and the market price may hover at a low level [6][35]. PP - In December 2025, although imports will continue to decrease, the supply pressure of polypropylene will increase as the maintenance plan of domestic polypropylene devices is basically over. The increase in festival - related orders is limited, and the supply - demand contradiction is expected to intensify [6][37].

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - The demand for polyolefins continues to be weak, and the cost - side support is insufficient. The market for both PE and PP is facing challenges in supply - demand balance and cost support [1][3]. - For PE, the supply pressure remains due to new capacity release and limited future planned maintenance, while the demand is entering the off - season, and the cost support from oil - based production is weakening [3]. - For PP, the weak supply - demand situation persists in the short - term. Although some short - term maintenance eases the supply pressure to some extent, the demand is also weakening, and the cost support from oil - based production is weakening while that from PDH is strengthening [3]. 3. Summary by Relevant Catalogs 3.1 Polyolefin Basis Structure - The closing price of the L main contract is 6707 yuan/ton (-55), and the closing price of the PP main contract is 6265 yuan/ton (-52). The LL North China spot price is 6800 yuan/ton (+0), the LL East China spot price is 6900 yuan/ton (+0), and the PP East China spot price is 6350 yuan/ton (-10). The LL North China basis is 93 yuan/ton (+55), the LL East China basis is 193 yuan/ton (+55), and the PP East China basis is 85 yuan/ton (+42) [2]. 3.2 Production Profit and Operating Rate - PE operating rate is 82.7% (-0.4%), and PP operating rate is 78.3% (-1.3%). The PE oil - based production profit is 379.1 yuan/ton (+82.6), the PP oil - based production profit is - 400.9 yuan/ton (+82.6), and the PDH - made PP production profit is - 437.6 yuan/ton (-23.2) [2]. 3.3 Polyolefin Non - Standard Price Difference No specific data or analysis provided in the given text. 3.4 Polyolefin Import and Export Profit - The LL import profit is 8.9 yuan/ton (+20.0), the PP import profit is - 232.6 yuan/ton (-0.9), and the PP export profit is 2.9 US dollars/ton (+0.1) [2]. 3.5 Polyolefin Downstream Operating Rate and Downstream Profit - The PE downstream agricultural film operating rate is 49.9% (-0.1%), the PE downstream packaging film operating rate is 50.7% (-0.2%), the PP downstream plastic weaving operating rate is 44.2% (+0.0%), and the PP downstream BOPP film operating rate is 62.6% (+0.0%) [2]. 3.6 Polyolefin Inventory No specific data or analysis provided in the given text. 3.7 Strategy - Unilateral: Wait and see; in the short - term, with weak cost - side support, the futures market may show a weak bottom - side oscillating trend [4]. - Inter - period: For L01 - 05, conduct a reverse arbitrage at high prices; for PP01 - 05, conduct a reverse arbitrage at high prices [4]. - Inter - variety: No strategy provided [4].