Report Summary 1. Industry Investment Rating No industry investment rating is provided in the report. 2. Core Views - The lithium mining, lithium salt, and battery cell markets are under significant inventory pressure, and the de - stocking process is slow. The medium - to - long - term supply - demand imbalance has not been substantially alleviated [3]. - There are two short - term logics in the market. In the price decline cycle, there is a negative feedback loop of "lithium salt price drop - mining price loosening - lithium salt price drop again". When the futures rebound, a "futures rise - capacity release - increased ore consumption - mining price increase" chain is formed, but it will return to the oversupply fundamentals under weak demand [3]. - The futures market in the second half of the year is expected to be divided into two stages: the futures price will oscillate upward at the beginning of the third quarter due to improved macro - sentiment, supply disturbances, and better - than - expected off - season performance; it will oscillate downward in the fourth quarter due to the end of technical upgrades and increased production [3]. - Strategy suggestions: Pay attention to the long - short spread trading opportunity between LC2509 and LC2511; look for opportunities to short LC2511 at high prices [3]. 3. Summary by Directory Futures Data - **Price Range Forecast**: The price of the lithium carbonate futures main contract is expected to oscillate between 63,000 - 70,000 yuan/ton, with a current 20 - day rolling volatility of 21.5% and a historical percentile of 28.1% over three years [2]. - **Contract Price and Volume Changes**: The closing price of the lithium carbonate main contract is 67,960 yuan/ton, up 1,540 yuan (2.32%) from the previous day and 3,780 yuan (5.89%) from the previous week. The trading volume is 826,939 lots, up 348,825 lots (72.96%) from the previous day and 428,917 lots (107.76%) from the previous week. The open interest is 363,676 lots, up 23,058 lots (6.77%) from the previous day and 39,993 lots (12.36%) from the previous week [10]. - **Month - spread Changes**: The LC08 - 11 month - spread is 880 yuan/ton, up 120 yuan (15.79%) from the previous day and 280 yuan (46.67%) from the previous week; the LC09 - 11 month - spread is 780 yuan/ton, up 200 yuan (34%) from the previous day and 520 yuan (200%) from the previous week; the LC11 - 12 month - spread is - 320 yuan/ton, down 80 yuan (33%) from the previous day and unchanged from the previous week [13]. Spot Data - **Lithium Ore Prices**: The average price of lithium mica (Li2O: 2 - 2.5%) is 1,465 yuan/ton, up 15 yuan (1.03%) from the previous day and 60 yuan (4.27%) from the previous week. The average price of lithium spodumene (Li2O: 6%, Brazilian CIF) is 702.5 US dollars/ton, up 7.5 US dollars (1.08%) from the previous day and 32.5 US dollars (4.85%) from the previous week [18]. - **Carbon/Hydrogen Lithium Prices**: The average price of industrial - grade lithium carbonate is 63,350 yuan/ton, unchanged from the previous day and up 1,300 yuan (2.10%) from the previous week. The average price of battery - grade lithium carbonate is 64,950 yuan/ton, unchanged from the previous day and up 1,300 yuan (2.04%) from the previous week [21]. - **Lithium Industry Chain Spot Spreads**: The battery - grade lithium carbonate - industrial - grade lithium carbonate spread is 1,600 yuan/ton, unchanged from the previous day and the previous week; the battery - grade lithium hydroxide - battery - grade lithium carbonate spread is - 2,380 yuan/ton, unchanged from the previous day and down 1,300 yuan (120.37%) from the previous week [23]. - **Downstream Product Prices**: The average price of power - type lithium iron phosphate is 31,345 yuan/ton, unchanged from the previous day. The average price of low - end energy - storage type lithium iron phosphate is 27,660 yuan/ton, unchanged from the previous day [25]. Basis and Warehouse Receipt Data - **Lithium Carbonate Basis**: The basis quotes of different lithium carbonate brands for the LC2507 contract range from - 400 to 500 yuan/ton, with most remaining unchanged [29]. - **Lithium Carbonate Warehouse Receipts**: The total number of warehouse receipts is 10,239 lots, a decrease of 416 lots from the previous day. Some warehouses such as Wugang Wuxi, Jiuling Lithium Industry (Yichun Fengxin), and Jiuling Lithium Industry (Yichun Yifeng) have seen a decrease in warehouse receipts [34]. Cost and Profit The report shows the production profit trends of lithium carbonate from purchased lithium spodumene concentrate (Li₂O: 6%) and lithium mica concentrate (Li₂O: 2.5%), as well as the theoretical delivery profit and import profit trends of lithium carbonate, but no specific numerical analysis is provided [32].

Report Summary 1. Report Industry Investment Rating There is no information about the industry investment rating in the provided content. 2. Core Viewpoints - Overseas methanol production is operating at a high level, leading to significant arrival pressure in China and a rapid accumulation of port inventories. The short - term situation at ports remains weak. Meanwhile, the Xingxing MTO maintenance plan is yet to be implemented, and attention should be paid to the progress of Nanjing Chengzhi's maintenance or load - reduction plan in late July [2]. - In the inland region, short - term maintenance of coal - based methanol has reduced supply. Although the formaldehyde industry is in a seasonal off - peak period, the operating rates of MTBE and acetic acid are acceptable. There is still sufficient demand resilience inland, and the inventory pressure on inland methanol factories is not significant. The inland market is stronger than the port market [2]. 3. Summary by Directory I. Methanol Basis & Inter - period Structure - The report presents multiple charts showing methanol basis and inter - period spreads, including methanol Taicang basis and main contract, basis of different regions' spot - main futures, and spreads between different methanol futures contracts [6][22]. II. Methanol Production Profit, MTO Profit, and Import Profit - Charts are provided to display the production profit of Inner Mongolia coal - based methanol, the profit of East China MTO (PP&EG type), the import spread between Taicang methanol and CFR China, and the price differences between CFR Southeast Asia, FOB US Gulf, FOB Rotterdam, and CFR China [26][34]. III. Methanol Operation and Inventory - Data shows that the total port inventory of methanol is 790,200 tons (+71,300 tons), with Jiangsu port inventory at 454,000 tons (+59,000 tons), Zhejiang port inventory at 180,000 tons (+4,500 tons), and Guangdong port inventory at 106,000 tons (-6,000 tons). The downstream MTO operating rate is 85.15% (+0.55%). The inland factory inventory is 352,340 tons (-4,560 tons), and the northwest factory inventory is 218,000 tons (-10,000 tons). The inland factory's pending orders are 243,119 tons (+21,879 tons), and the northwest factory's pending orders are 113,600 tons (+13,600 tons) [1][2]. IV. Regional Price Differences - The report lists various regional price differences, such as the difference between northern Shandong and the northwest (-280 spread - 3 yuan/ton, +3 yuan/ton), the difference between Taicang and Inner Mongolia (-550 spread - 141 yuan/ton, -1 yuan/ton), etc. [2]. V. Traditional Downstream Profits - There are charts showing the production profits of traditional downstream products, including Shandong formaldehyde, Jiangsu acetic acid, Shandong MTBE isomerization etherification, and Henan dimethyl ether [55][60]. 4. Strategies - Unilateral: Hedge by short - selling the 09 contract at high prices. - Inter - period: Conduct reverse arbitrage on the MA09 - 01 inter - period spread at high prices. - Cross - variety: No strategy is provided [3].

Core Viewpoint - The company is facing significant investor concerns regarding its hedging strategies and financial performance amid rising copper prices, with calls for a reassessment of its risk management approach [2][3][10]. Financial Performance - As of July 14, 2025, the company's stock closed at 16.41 yuan, down 0.55%, with a turnover rate of 1.54% and a trading volume of 366,800 hands, amounting to a transaction value of 604 million yuan [1]. - The company has reported substantial losses from hedging activities, totaling over 1 billion yuan in the past two years, raising questions about its financial stability and strategy [7][11]. Hedging Strategy - Investors have expressed concerns that the company's hedging strategy has not effectively mitigated risks, particularly during periods of rising copper prices, leading to losses instead of profits [2][3][5]. - The company acknowledges the need to optimize its hedging strategies and has indicated a willingness to adjust its approach based on market conditions and risk assessments [3][10][11]. Market Conditions - Recent data indicates a significant decline in copper inventories, with LME copper stocks dropping to 9.3 million tons and SHFE copper stocks at 2.1 million tons, raising concerns about potential supply shortages and price volatility [4][9]. - The company is monitoring market dynamics closely, particularly the risks associated with potential short squeezes in the copper futures market, and is considering adjustments to its hedging ratios [5][10][11]. Investor Relations - The company has been responsive to investor feedback, acknowledging concerns about its hedging practices and the impact on shareholder value, and has committed to enhancing transparency and communication [3][6][10].

Report Summary 1. Industry Investment Rating No investment rating is provided in the report. 2. Core View Entering the third quarter, pure benzene faces a situation of increasing supply and demand. Several large downstream plants are expected to be put into operation, bringing an opportunity for the phased repair of pure benzene valuation due to the mismatch in the commissioning of upstream and downstream. Fundamentally, the supply - demand pattern of styrene has weakened. However, in the near - term, due to continuous stockpiling by industrial giants, the basis of styrene in late July has not yet fallen back to the normal level. Subsequently, attention should be paid to the change of the near - term basis, and short - selling on rallies can be considered [3]. 3. Other Key Points Price Forecast - The price range of pure benzene in the monthly forecast is 5800 - 6200 yuan/ton, and that of styrene is 6800 - 7600 yuan/ton. The current 20 - day rolling volatility of styrene is 29.40%, and its historical percentile in the past 3 years is 85.8% [2]. Hedging Strategies - **Inventory Management**: For enterprises with high finished - product inventory worried about styrene price decline, they can short styrene futures (EB2508) with a 25% hedging ratio at an entry range of 7350 - 7400 yuan/ton to lock in profits and cover production costs; they can also sell call options (EB2508C7400) with a 50% hedging ratio at a range of 60 - 80 to collect option premiums and reduce capital costs, and lock in the spot selling price if styrene prices rise [2]. - **Procurement Management**: For enterprises with low regular procurement inventory planning to purchase according to orders, they can buy styrene futures (EB2508) with a 50% hedging ratio at an entry range of 7150 - 7200 yuan/ton to lock in procurement costs in advance; they can also sell put options (EB2508P7200) with a 75% hedging ratio at a range of 30 - 50 to collect option premiums and reduce procurement costs, and lock in the spot purchase price if styrene prices fall [2]. Market Analysis - **Likely Positive Factors**: Crude oil has been running strongly this week, providing strong support at the cost end. There is a long - short game in the styrene paper cargo for late July, making it difficult for the basis of late July against the 08 contract to decline [4]. - **Likely Negative Factors**: As of July 7, 2025, the port inventory of pure benzene in Jiangsu was 17.7 tons, a month - on - month increase of 1.69%, and the port inventory of styrene was 11.15 tons, an increase of 1.27 tons or 12.85% from the previous period. Both pure benzene and styrene have seen inventory accumulation. It is rumored that Jingbo may start a cracking unit at the end of July, and its 670,000 - ton/year styrene unit may produce products in mid - to - early August. Guoen Chemical (Dongming)'s 200,000 - ton/year styrene unit plans to start production in August and then operate long - term, which will significantly increase styrene supply in August. The latest production scheduling data of three major white - goods have been significantly revised down, indicating a pessimistic consumption demand expectation for styrene terminals in the third quarter [5]. Price and Basis Changes - **Pure Benzene Basis**: The basis of East China - BZ03 on July 9, 2025, was - 195 yuan/ton, East China - BZ04 was - 205 yuan/ton, East China - BZ05 was - 204 yuan/ton, and East China - BZ06 was - 175 yuan/ton [8]. - **Styrene Basis**: The basis of East China - EB07 on July 9, 2025, was 136 yuan/ton, East China - EB08 was 285 yuan/ton, East China - EB09 was 372 yuan/ton, and East China - EB10 was 447 yuan/ton [8]. - **Industrial Chain Price Spread**: The price spreads between different periods of pure benzene and styrene paper cargo, and between styrene and pure benzene at different time points and contracts have changed to different degrees. For example, the spread between styrene spot and pure benzene spot on July 9, 2025, was 1735 yuan/ton, an increase of 30 yuan/ton from the previous day [8]. Industry Chain Prices - **July 9, 2025 Prices**: Brent crude oil was 70.18 dollars/barrel, and the price of pure benzene in the East China market was 5905 yuan/ton, an increase of 30 yuan/ton from the previous day. The price of styrene in the East China market was 7635 yuan/ton, an increase of 30 yuan/ton from the previous day. EB2508 was 7350 yuan/ton, an increase of 74 yuan/ton from the previous day [9][10].

Core Insights - The egg futures market has reached a significant milestone with the 2507 contract rolling delivery volume hitting 290 lots and the number of delivery pairs exceeding 586 lots, marking a historical high for single contract deliveries in China's egg futures market [1] - The delivery participants show distinct characteristics, with sellers primarily consisting of large-scale domestic egg-laying enterprises and trading companies, while buyers are mainly institutional investors from Zhejiang [1] Market Context for High Delivery Volume - The 2507 egg futures contract remains in a contango structure, but the price gap between futures and spot prices is narrowing due to recent price declines, allowing egg-laying enterprises to hedge and lock in sales prices through futures [3] - Compared to the spot market's average transaction price of 2.50 yuan per jin, futures hedging has provided enterprises with a profit of approximately 0.30 yuan per jin, serving as an important risk management tool [3] - As of July 8, the basis for the 2508 egg futures contract relative to the national average was -995 yuan per 500 kg, with futures premiums at historically high levels for the same period [3] - On July 7, the main egg futures contract saw a decline of 3.74%, reaching a near five-year low, while egg prices in Handan, Hebei, dropped to 2.44 yuan per jin, also a five-year low, driven primarily by production capacity pressures [3] Supply and Demand Imbalance Driving Price Decline - Supply-side pressures are evident, with the national laying hen stock reaching approximately 1.34 billion birds in June, a month-on-month increase of 0.45% and a year-on-year increase of 6.77%, leading to an oversupply of eggs [4] - The average monthly price of eggs in major production areas was 2.76 yuan per jin, reflecting a month-on-month decline of 10.39% and a year-on-year decline of 26.79% [4] - Despite a significant decrease in the age of culling hens in May and June, the stock of laying hens remains high, with expectations of continued production capacity increases in July, estimated at around 1.35 billion birds [4] - Demand appears weak, as the current season is characterized by reduced school procurement due to summer vacations, shifting to household consumption, while high temperatures hinder egg storage, leading to cautious downstream purchasing [4] - Low-price zones are experiencing delivery and cold storage behaviors, which limit price declines, but this inventory may face selling pressure around September, potentially suppressing the market ahead of the Mid-Autumn Festival [4]

Core Viewpoint - The listing of pure benzene futures and options on the Dalian Commodity Exchange (DCE) is expected to enhance risk management tools for the chemical industry, supporting the transition from a "chemical power" to a "chemical strong country" in China [2]. Group 1: Market Performance - On the first trading day, all four pure benzene futures contracts closed up by approximately 0.5%, with a trading volume of 26,900 lots and a total transaction value of 4.788 billion yuan [3]. - The benchmark price for the contracts was set at 5,900 yuan per ton, with a total open interest of 5,419 lots [3]. Group 2: Industry Impact - The introduction of pure benzene futures and options will create a combination of hedging tools alongside styrene futures and options, providing effective means for enterprises to manage price risks and secure production profits during expansion cycles [2]. - Major industry players, including China Petroleum International Company and Xuyang Group, participated in the first day of trading, indicating strong interest from key stakeholders across the supply chain [4]. Group 3: Risk Management and Operational Efficiency - Companies like Xuyang Group and Hengshen Group emphasized that the new futures and options will allow for more proactive and refined management of raw material procurement and sales risks, enhancing operational stability and market competitiveness [4][6]. - The listing is expected to improve inventory management and reduce holding costs, thereby increasing capital efficiency for enterprises [5]. Group 4: Delivery Mechanism - The delivery method for pure benzene futures involves a physical delivery system with both factory and warehouse options, with a delivery unit of 30 tons [7]. - Jiangsu, Zhejiang, and Shanghai have been designated as the benchmark delivery locations due to their status as major production and trading areas for pure benzene [7].

Group 1 - In March 2024, strong expectations for a Federal Reserve interest rate cut in June and favorable domestic policy expectations led to a rise in zinc prices, with the main contract reaching a two-year high of 25,365 yuan/ton [1] - By the second quarter of 2024, the trading logic shifted from interest rate cuts to concerns about secondary inflation in Europe and the U.S., causing further increases in zinc prices [1] - The volatility in zinc prices significantly increased operational risks for companies, making futures hedging essential [1] Group 2 - As of the end of March 2024, despite a rapid increase in zinc prices, downstream demand did not improve significantly, leading to a continuous accumulation of social inventory [2] - From July 2024, the spot premium in South China began to rise, peaking at 240 yuan/ton in mid-September before falling back to 15 yuan/ton [2] - The fluctuation of basis affects the effectiveness of futures hedging, making it crucial for companies to determine the basis accurately [2] Group 3 - In 2023, several overseas mines faced production halts, exacerbating the tight supply of zinc concentrate and leading to a decline in processing fees [3] - The supply issues for zinc concentrate worsened in 2024, resulting in a significant reduction in smelting profits and subsequent production cuts by smelters [3] Group 4 - A supply chain management company established in April 2023 focuses on zinc concentrate and zinc ingot procurement and sales, facing challenges due to price volatility [6] - The company engages in high-frequency trading to improve capital turnover and mitigate risks associated with price fluctuations [6] Group 5 - A futures company developed a hedging strategy for the supply chain company, prioritizing spot purchases and short futures when the basis is negative, and pre-selling spot and long futures when the basis is positive [7] - This strategy effectively hedges against single-sided risks in spot trading while capturing basis profits [7] Group 6 - On October 14, 2024, the supply chain company purchased 30 tons of spot zinc at an average price of 24,953 yuan/ton and sold futures at an average price of 25,250 yuan/ton, resulting in a total profit of 4,560 yuan [8] - On October 28, 2024, the company pre-sold 30 tons of zinc ingots at an average price of 24,860 yuan/ton and established long futures, achieving a total profit of 11,010 yuan [8] Group 7 - The case study illustrates that companies should not mechanically follow procurement and sales plans but should anticipate spot premiums or basis changes to enhance hedging effectiveness and increase trade profits [9]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The lithium ore, lithium salt, and battery cell markets are under significant inventory pressure, and the pattern of medium - to long - term supply - demand imbalance has not been substantially alleviated. The futures market in the second half of the year is expected to be divided into two stages: the futures price will fluctuate upward in early Q3 due to improved macro - sentiment, supply disruptions, and the "not - so - off - season" phenomenon; it will fluctuate downward in Q4 due to the end of technological upgrades and increased production [3]. - Strategies recommended include LC09 - 11 calendar spread trading, shorting LC2511 at high prices, and selling call options at high prices [3]. 3. Summary by Relevant Catalogs 3.1 Futures Data - **Price Range Forecast**: The price of the lithium carbonate main contract is expected to oscillate between 59,000 - 62,000 yuan/ton, with a current 20 - day rolling volatility of 21.1% and a historical percentile (3 - year) of 25.9% [2]. - **Daily Changes**: The closing price of the lithium carbonate main contract was 63,660 yuan/ton, up 380 yuan (0.60%); the trading volume was 213,300 lots, down 134,429 lots (- 38.66%); the open interest was 322,535 lots, down 2,753 lots (- 0.85%). For the LC2511 contract, the closing price was 63,340 yuan/ton, up 320 yuan (0.51%); the trading volume was 20,140 lots, down 15,366 lots (- 43.28%); the open interest was 97,999 lots, up 950 lots (0.98%) [9]. - **Month - spread Changes**: The LC08 - 11 month - spread was 480 yuan/ton, up 40 yuan (9.09%); the LC09 - 11 month - spread was 320 yuan/ton, up 60 yuan (23%); the LC11 - 12 month - spread was - 260 yuan/ton, up 40 yuan (- 13%) [12]. 3.2 Spot Data - **Lithium Ore Quotes**: The average daily prices of various types of lithium ore showed little change, except for the fastmarkets Li₂O:6% lithium ore, which decreased by 2.5 dollars/ton (- 0.37%) [16]. - **Carbon/Hydrogen Lithium Quotes**: The average price of industrial - grade lithium carbonate was 60,950 yuan/ton, up 250 yuan (0.41%); the average price of battery - grade lithium carbonate was 62,550 yuan/ton, up 250 yuan (0.4%); the average price of industrial - grade lithium hydroxide was 52,020 yuan/ton, unchanged; the average price of battery - grade lithium hydroxide (micropowder) was 62,670 yuan/ton, down 50 yuan (- 0.08%); the average price of battery - grade lithium hydroxide (CIF for China, Japan, and South Korea) was 8.1 dollars/kg, unchanged; the fastmarkets price was 8.05 dollars/kg, down 0.15 dollars/kg (- 1.82%) [19]. - **Lithium Industry Chain Spot Spreads**: The electrolyte - lithium carbonate spread was 1,600 yuan/ton, unchanged; the electric - hydrogen - electric - carbon spread was 420 yuan/ton, down 250 yuan (- 37.31%); the spread between battery - grade lithium hydroxide CIF for Japan and South Korea and the domestic price was 399.86 yuan/ton, up 26.51 yuan (7.10%) [21]. - **Downstream Quotes**: The prices of various downstream products such as lithium iron phosphate and ternary materials showed different degrees of increase, while the prices of some products such as lithium hexafluorophosphate and electrolyte remained unchanged [23][24]. 3.3 Basis and Warehouse - receipt Data - **Basis Quotes**: The basis quotes of different lithium carbonate brands for the LC2507 contract showed little change [27]. - **Warehouse - receipt Quantity**: The total number of warehouse receipts was 15,555 lots, a decrease of 5,481 lots compared to the previous day, with different changes in each warehouse or sub - warehouse [32]. 3.4 Cost and Profit - The report presents the production profit trends of lithium carbonate from purchased lithium spodumene concentrate (Li₂O:6%) and lithium mica concentrate (Li₂O:2.5%), as well as the theoretical delivery profit and import profit trends of lithium carbonate [30].

Report Summary 1. Price Range Forecast - The predicted monthly price range for methanol is 2200 - 2400, with a current 20 - day rolling volatility of 20.01% and a 3 - year historical percentile of 51.2% [3]. - The predicted monthly price range for polypropylene is 6800 - 7400, with a current 20 - day rolling volatility of 10.56% and a 3 - year historical percentile of 42.2% [3]. - The predicted monthly price range for plastic is 6800 - 7400, with a current 20 - day rolling volatility of 15.24% and a 3 - year historical percentile of 78.5% [3]. 2. Hedging Strategies Inventory Management - For high - level finished product inventory and concerns about methanol price drops, shorting methanol futures (MA2509, 25% hedging ratio, entry range 2250 - 2350) can lock in profits and cover production costs [3]. - Buying put options (MA2509P2250, 50% hedging ratio, entry range 15 - 20) can prevent significant price drops, and selling call options (MA2509C2350, 45 - 60) can reduce capital costs [3]. Procurement Management - For low - level procurement inventory and the need to purchase based on orders, buying methanol futures (MA2509, 50% hedging ratio, entry range 2200 - 2350) can lock in procurement costs [3]. - Selling put options (MA2509P2300, 75% hedging ratio, entry range 20 - 25) can earn premiums to reduce procurement costs and lock in the purchase price if the price drops [3]. 3. Core Contradictions - Inland methanol performs better than port methanol due to recent inland plant maintenance, external purchases by inland CTO plants, and purchases of inland methanol by port MTO plants [4]. - After the anti - involution meeting in the second half of the week, the commodity and financial markets rose, leading to premium transactions in plant auctions [4]. - After the end of the short - squeeze in late June at the port, the external supply is gradually recovering, and the basis is continuously weakening [4]. - Currently, the inventory is low, the port inventory is accumulating slowly, and Iran has suffered actual production losses, but there are significant differences in July shipments and no conclusion on Iran's inventory [4]. - As of the weekend, Iran's plants are gradually recovering, with 3 ships shipped at a decent pace [4]. - In late July, Chengzhi's large plant plans to shut down for 1 - 2 months, and Zhongyuan Ethylene shut down on June 27 for 1 - 2 months [4]. - The forecasted inventory in Taicang in July is around 230,000 tons, and the current high basis in Taicang may lead to a correction later [4]. 4. Negative Factors - This week, the expected arrival of foreign vessels at the port is scattered, and the arrival volume is sufficient, which may lead to an increase in port methanol inventory [5].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In the short term, due to geopolitical conflicts in Iran driving oil prices, which in turn influence the prices of pure benzene and styrene. Once the geopolitical tensions ease, the market will return to fundamentals. The weak demand for CPL and aniline in the downstream of pure benzene, combined with the pressure of South Korean pure benzene exports to China and high port inventories, keep the processing fees of pure benzene low, dragging down the cost of styrene. For styrene, with the end of the domestic and overseas maintenance peak, the average operation of downstream PS and ABS, and the decline in the cumulative year - on - year growth rate of terminal production scheduling, styrene is in an inventory rebuilding cycle, and production profits are expected to be further compressed. Therefore, it is recommended to cautiously short - sell for hedging on rallies and shrink the EB - BZ spread when it is high [2][9][151]. Summary According to the Directory 1. Market News and Important Data - **2025 Pure Benzene and Downstream Production Capacity Expansion**: In 2025, there are plans to add 210 million tons/year of pure benzene production capacity, with 97 million tons/year already realized and 113 million tons/year to be realized in the second half of the year. The production capacity expansion rate is 2.8% in Q3 and 1.6% in Q4. Attention should be paid to the progress of the 2 reforming and cracking of Yulong Petrochemical's Phase I project. For styrene, the production capacity expansion pressure increases in the second half of the year, with only 500,000 tons of Yulong put into production at the beginning of the year, and the commissioning of Zhongtai Chemical postponed [7][22][23]. - **Pure Benzene Supply**: In the first half of 2025, pure benzene maintenance was concentrated, but port inventory pressure increased. The cumulative year - on - year growth rate of pure benzene production from January to May was 2.8%, mainly due to concentrated refinery maintenance from April to May. After June, domestic production capacity utilization rebounded rapidly. The port inventory pressure was due to a 62.5% cumulative year - on - year increase in imports from January to May and the weak downstream operation, especially the decline in CPL and aniline operations. The negative basis structure of pure benzene deepened to around - 80 yuan/ton in July, and the processing fees were at a historical low [36][38]. - **Pure Benzene Downstream**: In 2025, the downstream operation of pure benzene was less resilient than expected. The cumulative year - on - year growth rate of pure benzene industrial demand from January to May was 11%, with the growth rate of styrene production at 15% and the growth rate of non - styrene downstream demand at 9% (21% in the previous year). CPL and aniline operations declined, while phenol operation was fair but later entered a loss state again, and adipic acid was in an over - supply and loss - reduction cycle [72]. - **Styrene Fundamentals**: In 2025, styrene production profits recovered in the first half of the year, and the operation rate increased. However, with the increase in domestic and overseas supply, production profits are expected to decline. In the first half of the year, overseas maintenance was concentrated, driving exports and reducing port inventories. In the second half of the year, as overseas operations resumed, ports will return to the inventory accumulation cycle. The styrene port inventory reached a historical low in May, and the basis fluctuated greatly. The cumulative year - on - year growth rate of demand from the five major downstream industries of styrene from January to May was 11.7%. The production growth rates of PS and ABS were high but mainly converted into finished - product inventory pressure. The production capacity expansion of the three major hard plastics in 2025 was significant, but the actual demand increase may be less than expected [78][90][118]. 2. Market Analysis - In June, geopolitical conflicts in Iran drove oil prices, which in turn influenced the prices of pure benzene and styrene. After the conflicts eased, the market returned to fundamentals. The weak downstream demand for pure benzene and the high port inventory pressure dragged down the cost of styrene. For styrene, with the end of the maintenance peak and the decline in terminal production scheduling, it is in an inventory rebuilding cycle, and production profits are under pressure [9]. 3. Strategy - Cautiously short - sell for hedging on rallies. Shrink the EB - BZ spread when it is high [10][151].