Report Overview - Report Name: Polyolefin Morning Report - Report Date: October 20, 2025 - Report Author: Jin Zebin from Dayue Futures Investment Consulting Department [2][3] Industry Investment Rating - No industry investment rating is provided in the report. Core Viewpoints - The overall fundamentals of LLDPE and PP are bearish, with the expectation of a weak and volatile trend in the market today. Factors contributing to this include the "supply increase and demand decrease" pattern in the long - term for crude oil, limited support for the cost side of polyolefins, uncertainties in Sino - US trade negotiations, and relatively high industrial inventories [4][6]. Summary by Sections LLDPE Overview - **Fundamentals**: In September, the official PMI was 49.8, up 0.4 percentage points from the previous month, indicating improved manufacturing sentiment but still in the contraction range. The long - term "supply increase and demand decrease" pattern of crude oil remains unchanged, providing limited support for the polyolefin cost side. Sino - US trade negotiations are uncertain, and oil prices are falling. The agricultural film industry is operating steadily with a slight increase in the operating rate, and the demand for other film types is good as Double 11 approaches. The current spot price of LLDPE delivery products is 6910 (-40), with overall bearish fundamentals [4]. - **Basis**: The basis of the LLDPE 2601 contract is - 19, with a premium/discount ratio of - 0.3%, considered neutral [4]. - **Inventory**: The comprehensive PE inventory is 58.0 tons (+3.7), considered neutral [4]. - **Market**: 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 increasing, showing a bullish sign [4]. - **Expectation**: The LLDPE main contract is expected to fluctuate weakly today, affected by falling crude oil prices, increased Sino - US macro risks, stable operation of the agricultural film industry, and relatively high industrial inventories [4]. - **Likely Influencing Factors**: Bullish factor is the seasonally increased demand; bearish factors are the weak year - on - year demand, significant new production capacity in the fourth quarter, and Sino - US trade risks [5]. PP Overview - **Fundamentals**: Similar to LLDPE, the macro - economic situation shows improved but still contracting manufacturing sentiment. The long - term "supply increase and demand decrease" pattern of crude oil provides limited cost support. Sino - US trade negotiations are uncertain, and oil prices are falling. The plastic weaving industry is supported by the peak season, and the demand for pipes is increasing but still weak year - on - year. The current spot price of PP delivery products is 6550 (-10), with overall bearish fundamentals [6]. - **Basis**: The basis of the PP 2601 contract is - 68, with a premium/discount ratio of - 1.0%, considered bearish [6]. - **Inventory**: The comprehensive PP inventory is 67.9 tons (-0.3), considered neutral [6]. - **Market**: 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 increasing, showing a bearish sign [6]. - **Expectation**: The PP main contract is expected to fluctuate weakly today, affected by falling crude oil prices, increased Sino - US macro risks, new production capacity coming online, stable downstream average operating rate, and relatively high industrial inventories [6]. - **Likely Influencing Factors**: Bullish factor is the seasonally increased demand; bearish factors are the weak year - on - year demand, significant new production capacity in the fourth quarter, and Sino - US trade risks [7]. Market Data Tables - **LLDPE**: The spot price of delivery products is 6910 (-40), the 01 contract price is 6929 (+19), the basis is - 19 (-59), the PP comprehensive factory inventory is 58.0 (+3.7), and the social inventory is 54.6 (+2.1) [8]. - **PP**: The spot price of delivery products is 6550 (-10), the 01 contract price is 6618 (+23), the basis is - 68 (-33), the PP comprehensive factory inventory is 67.9 (-0.3), and the social inventory is 34.9 (-2.3) [8]. Supply - Demand Balance Sheets - **Polyethylene**: From 2018 to 2024, the production capacity, output, and apparent consumption of polyethylene generally showed an increasing trend, with fluctuations in the import dependence. In 2025E, the production capacity is expected to reach 4319.5 [13]. - **Polypropylene**: From 2018 to 2024, the production capacity, output, and apparent consumption of polypropylene also generally increased, with the import dependence showing a downward trend. In 2025E, the production capacity is expected to reach 4906 [15].

Report Industry Investment Rating - Not provided in the document Core Viewpoints - The escalation of the Sino-US trade war has led to a volatile downward trend in crude oil prices. Polyolefin registered warrants are at a historically high level for the same period, suppressing the market, and the polyolefin market continues in a contango situation. With the arrival of the seasonal peak season, the rebound in downstream demand is weaker than in previous years, potentially resulting in a scenario where the peak season is not prosperous [15][17][18] - It is predicted that polyethylene (LL2601) will oscillate in the range of 7200 - 7500, and polypropylene (PP2601) in the range of 7000 - 7300. The recommended strategy is to adopt a wait-and-see approach [17] Summary by Directory 1. Weekly Assessment and Strategy Recommendation - **Market Information**: The Sino-US trade war has escalated again, causing crude oil prices to oscillate downward. In terms of valuation, polyethylene's weekly decline is in the order of futures > spot > cost, while for polypropylene, it is spot > futures > cost. On the cost side, last week, WTI crude oil dropped by -6.84%, Brent crude oil by -6.55%, coal prices rose by 4.58%, methanol by 3.11%, ethylene by -2.36%, and propylene by -3.94%, with propane remaining unchanged at 0.00%. There is still support on the cost side [15] - **Supply**: PE capacity utilization is 82.45%, a -1.86% decrease from the previous period, a 7.69% increase compared to the same period last year, and a -4.90% decrease compared to the average of the past 5 years. PP capacity utilization is 77.27%, a -0.68% decrease from the previous period, a -1.29% decrease compared to the same period last year, and a -7.77% decrease compared to the average of the past 5 years. According to the production plan, there is significant production pressure for polypropylene in the fourth quarter [15] - **Imports and Exports**: In August, domestic PE imports were 95.02 tons, a -14.17% decrease from the previous period and a -22.11% decrease compared to the same period last year. PP imports were 15.96 tons, a -9.91% decrease from the previous period and a -22.23% decrease compared to the same period last year. Import profits have declined, the supply of PE from North America has decreased, and the pressure on the import side has lessened. In August, PE exports were 11.60 tons, a 14.12% increase from the previous period and a 61.83% increase compared to the same period last year. PP exports were 25.02 tons, a 5.99% increase from the previous period and a 32.77% increase compared to the same period last year. With the start of Christmas stockpiling, PP exports may remain at a high level year-on-year [16] - **Demand**: The downstream operating rate of PE is 45.00%, a 1.44% increase from the previous period and a -0.13% decrease compared to the same period last year. The downstream operating rate of PP is 51.80%, a 0.08% increase from the previous period and a 0.12% increase compared to the same period last year. During the seasonal peak season, the downstream demand for polyolefins is lower than in previous years [16] - **Inventory**: PE production enterprise inventory is 52.95 tons, a 8.37% increase in inventory from the previous period and a -1.74% decrease compared to the same period last year; PE trader inventory is 5.03 tons, a -6.83% decrease in inventory. PP production enterprise inventory is 67.87 tons, a -0.40% decrease in inventory from the previous period and a 15.01% increase compared to the same period last year; PP trader inventory is 23.86 tons, a -8.62% decrease in inventory; PP port inventory is 6.79 tons, a -1.16% decrease in inventory. Overall, the inventory pressure of PP is higher than that of PE [16] - **Strategy Viewpoint**: It is recommended to maintain a wait-and-see approach [17] 2. Spot and Futures Market - **LLDPE**: The closing price of the LLDPE main contract is 6910, a -3.77% change from the previous week; the spot price is 6990, a -2.58% change. Trading volume is 1,241,849 lots, a decrease of 3,297,726 lots from the previous week; open interest is 2,814,881 lots, a decrease of 10,944,309 lots. The basis is 80, an increase of 42 from the previous week; the spread between May and September contracts is -52, an increase of 0.21 [20] - **PP**: The closing price of the PP main contract is 6595, a -4.46% change from the previous week; the spot price is 6625, a -2.50% change. Trading volume is 1,936,771 lots, a decrease of 3,947,414 lots from the previous week; open interest is 3,235,034 lots, a decrease of 12,067,276 lots. The basis is 30, a decrease of 5 from the previous week; the spread between May and September contracts is -24, an increase of 0.33 [20] - **Price Relationship**: The South Korean ethylene plant clearance policy may boost the long - term strengthening of the LL - PP spread [61] 3. Cost Side - **Cost Changes**: Oil - based costs have significantly decreased. Last week, WTI crude oil dropped by -6.84%, Brent crude oil by -6.55%, coal prices rose by 4.58%, methanol by 3.11%, ethylene by -2.36%, and propylene by -3.94%, with propane remaining unchanged at 0.00% [15] - **LPG Import**: Freight rates for LPG imports have significantly decreased [106] 4. Polyethylene Supply Side - **Raw Material Composition**: The raw materials for PE production are mainly oil - based (80.00%), followed by light hydrocarbon (12.00%), coal - based (5.00%), methanol (2.00%), and purchased ethylene (1.00%) [136] - **Production Capacity and Output**: In 2025, a total of 463 tons of polyethylene production capacity has been put into operation, with 40 tons yet to be put into operation. The current PE capacity utilization is 82.45%, a -1.86% decrease from the previous period [142] - **Maintenance Situation**: There are multiple polyethylene plants with maintenance plans, with a total planned maintenance volume of 560.5 tons this month and a return volume of 255 tons [154] 5. Polyethylene Inventory and Imports/Exports - **Inventory**: PE production enterprise inventory is 52.95 tons, a 8.37% increase in inventory from the previous period and a -1.74% decrease compared to the same period last year; PE trader inventory is 5.03 tons, a -6.83% decrease in inventory [16] - **Imports/Exports**: In August, domestic PE imports were 95.02 tons, a -14.17% decrease from the previous period and a -22.11% decrease compared to the same period last year. Exports were 11.60 tons, a 14.12% increase from the previous period and a 61.83% increase compared to the same period last year [16] 6. Polyethylene Demand Side - The downstream operating rate of PE is 45.00%, a 1.44% increase from the previous period and a -0.13% decrease compared to the same period last year. During the seasonal peak season, the downstream demand for polyethylene is lower than in previous years [16] 7. Polypropylene Supply Side - **Production Capacity and Output**: PP capacity utilization is 77.27%, a -0.68% decrease from the previous period, a -1.29% decrease compared to the same period last year, and a -7.77% decrease compared to the average of the past 5 years. According to the production plan, there is significant production pressure for polypropylene in the fourth quarter [15] - **Maintenance Situation**: Not specifically mentioned in the document 8. Polypropylene Inventory and Imports/Exports - **Inventory**: PP production enterprise inventory is 67.87 tons, a -0.40% decrease in inventory from the previous period and a 15.01% increase compared to the same period last year; PP trader inventory is 23.86 tons, a -8.62% decrease in inventory; PP port inventory is 6.79 tons, a -1.16% decrease in inventory. Overall, the inventory pressure of PP is higher than that of PE [16] - **Imports/Exports**: In August, domestic PP imports were 15.96 tons, a -9.91% decrease from the previous period and a -22.23% decrease compared to the same period last year. Exports were 25.02 tons, a 5.99% increase from the previous period and a 32.77% increase compared to the same period last year. With the start of Christmas stockpiling, PP exports may remain at a high level year - on - year [16] 9. Polypropylene Demand Side - The downstream operating rate of PP is 51.80%, a 0.08% increase from the previous period and a 0.12% increase compared to the same period last year. During the seasonal peak season, the downstream demand for polypropylene is lower than in previous years [16]

Report Header - Report Title: Polyolefin Morning Report [2] - Report Date: October 17, 2025 [2] - Author: Jin Zebin from Dayue Futures Investment Consulting Department [3] - Contact Information: 0575 - 85226759 [3] Industry Investment Rating - Not provided in the given content Core Views - The overall fundamentals of LLDPE and PP are bearish, with expected weak and volatile trends for both today [4][6] - For LLDPE and PP, factors such as geopolitical unrest provide cost support, while weak demand, new capacity in Q4, and Sino - US trade risks are negative factors [5][7] Summary by Related Catalogs LLDPE Overview - **Fundamentals**: In September, the official PMI was 49.8, up 0.4 points from last month, with improved but still contracting manufacturing. The long - term "supply increase, demand decrease" pattern of crude oil offers limited cost support. After Trump's tariff threat on October 10, oil prices dropped. With fewer plant overhauls, production increased. Agricultural film operations were stable, and other film demand was good due to the approaching Double 11. The current LLDPE delivery spot price is 6950 (-10), with overall bearish fundamentals [4] - **Basis**: The LLDPE 2601 contract basis is 40, with a premium - discount ratio of 0.6%, which is bullish [4] - **Inventory**: PE comprehensive inventory is 54.3 tons (+11.3), neutral [4] - **Market**: The 20 - day moving average of the LLDPE main contract is downward, and the closing price is below the 20 - day line, bearish [4] - **Main Position**: The net long position of the LLDPE main contract is decreasing, bullish [4] - **Expectation**: The LLDPE main contract is expected to be weak and volatile today, with falling oil prices, increased Sino - US macro risks, stable agricultural film operations, and moderately high industrial inventory [4] PP Overview - **Fundamentals**: Similar to LLDPE, the official PMI in September was 49.8, up 0.4 points. The long - term crude oil pattern offers limited cost support. After the tariff threat, oil prices dropped. There is sufficient supply, with good performance in plastic weaving due to the peak season and weak pipe demand. The current PP delivery spot price is 6560 (-40), with overall bearish fundamentals [6] - **Basis**: The PP 2601 contract basis is - 35, with a premium - discount ratio of - 0.5%, bearish [6] - **Inventory**: PP comprehensive inventory is 68.1 tons (+16.1), neutral [6] - **Market**: The 20 - day moving average of the PP main contract is downward, and the closing price is below the 20 - day line, bearish [6] - **Main Position**: The net short position of the PP main contract is decreasing, bearish [6] - **Expectation**: The PP main contract is expected to be weak and volatile today, with falling oil prices, increased Sino - US macro risks, new capacity coming online, stable downstream average operating rates, and moderately high industrial inventory [6] Spot and Futures Market Data - **LLDPE**: The current delivery spot price is 6950 (-10), the 01 contract price is 6910 (-8), the basis is 40 (-2), the import US dollar price is 823 (-5), the import conversion price is 7221 (-42), and the import price difference is - 271 (32). The warehouse receipt is 12707 (-10), PE comprehensive factory inventory is 54.3 tons, and social inventory is 52.5 tons [8] - **PP**: The current delivery spot price is 6560 (-40), the 01 contract price is 6595 (-7), the basis is - 35 (-33), the import US dollar price is 820 (-5), the import conversion price is 7195 (-42), and the import price difference is - 635 (2). The warehouse receipt is 13814 (0), PP comprehensive factory inventory is 68.1 tons, and social inventory is 37.2 tons [8] Supply - Demand Balance Sheets - **Polyethylene**: From 2018 - 2024, capacity, production, and consumption generally showed an upward trend, with fluctuations in import dependence and consumption growth rates. The expected capacity in 2025E is 4319.5 [13] - **Polypropylene**: From 2018 - 2024, capacity, production, and consumption also generally increased, with changes in import dependence and consumption growth rates. The expected capacity in 2025E is 4906 [15]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The market for plastics (L) and polypropylene (PP) has been experiencing price declines recently, influenced by factors such as supply - demand dynamics, economic data, and policy changes. Different trading strategies are recommended based on daily analysis, including holding long or short positions, and setting appropriate stop - loss points [1][2][5] Summary by Related Catalogs Market Situation - **L Plastic**: The L2601 contract has shown price fluctuations, with a general downward trend in recent days. LLDPE market prices in different regions have also declined to varying degrees. Market trading sentiment is weak, with trade - offs by traders and low procurement enthusiasm from downstream [1][5][8] - **PP Polypropylene**: The PP2601 contract has also been falling. PP market prices have decreased, and the futures market has dragged down the confidence of the spot market. Downstream factories are cautious in purchasing, with some regions and product types having relatively better transactions [1][5][8] Important Information - **Domestic Policy**: Seven departments issued the "Work Plan for Stable Growth of the Petrochemical and Chemical Industry (2025 - 2026)", aiming to promote the high - end, green, and intelligent transformation of the industry [24] - **International News**: The US government shutdown has affected economic data and decision - making, and the global plastic additive market is expected to grow at a compound annual growth rate of 3.2% from 2024 to 2029 [1][18] - **Real Estate News**: In September, with the superposition of the "Golden September" effect and stable real - estate policies, the transaction activity of core cities has rebounded [8][11] Logical Analysis - **Supply - related**: Domestic PE and PP production capacity utilization rates have shown different trends, with some periods of increase and decrease. Import volumes of polyethylene and polypropylene have also changed, affecting the L - PP spread [2][21][25] - **Demand - related**: Downstream demand is in the peak season, but the start - up of some industries and order volumes are at a low level compared to the same period. The impact of factors such as the real - estate market and the logistics industry on polyolefin demand is also considered [6][21][31] - **External Factors**: Changes in international oil prices, global stock market values, and economic data from other countries have an impact on the polyolefin market [21][25][28] Trading Strategies - **Unilateral**: Depending on different market conditions, strategies such as holding long or short positions, setting stop - loss points, and waiting and seeing are recommended for the L and PP main 01 contracts [2][6][9] - **Arbitrage (Long - Short)**: Strategies for holding or seizing opportunities to intervene in the L2601 - PP2601 spread are provided, along with corresponding stop - loss settings [2][6][9] - **Options**: The general strategy for options is to wait and see [2][6][9]

Report Summary 1. Industry Investment Rating No investment rating for the industry is provided in the report. 2. Core Viewpoints - The overall fundamentals of LLDPE are bearish, with the plastic主力合约 expected to fluctuate weakly. The decline in crude oil prices and increased Sino - US macro risks contribute to this outlook. The PE market is also affected by a neutral - high industrial inventory and stable agricultural film operations [4]. - The PP market is also expected to fluctuate weakly. Similar to LLDPE, it is influenced by falling crude oil prices, elevated Sino - US macro risks, new production capacity coming online, and a neutral - high inventory [6]. 3. Summaries by Relevant Sections LLDPE Overview - **Fundamentals**: In September, the official PMI was 49.8, up 0.4 points from the previous month, indicating some improvement in manufacturing sentiment but still in the contraction range. The long - term "supply increase, demand decrease" pattern of crude oil limits cost support for polyolefins. After Trump's tariff threat on October 10, the risk of Sino - US trade disputes escalating increased, causing a significant drop in oil prices. On the supply - demand side, device maintenance decreased, production increased, agricultural film operations were stable, and demand for other films was good due to the approaching Double 11. The current LLDPE delivery spot price is 6960 (-30), with overall bearish fundamentals [4]. - **Basis**: The basis of the LLDPE 2601 contract is 42, with a premium - discount ratio of 0.6%, which is bullish [4]. - **Inventory**: The PE comprehensive inventory is 54.3 million tons (+11.3), considered neutral [4]. - **Market**: The 20 - day moving average of the LLDPE主力合约 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主力 is decreasing, which is bullish [4]. - **Expectation**: The LLDPE主力合约 is expected to fluctuate weakly today due to falling crude oil prices, increased Sino - US macro risks, stable agricultural film operations, and a neutral - high industrial inventory [4]. - **Likely Factors**: Bullish factors include geopolitical unrest providing cost support; bearish factors are weak year - on - year demand, multiple new productions in the fourth quarter, and Sino - US trade risks [5]. PP Overview - **Fundamentals**: Similar to LLDPE, the manufacturing PMI improved but remained in the contraction range. Crude oil's long - term pattern limited cost support, and Sino - US trade risks increased. Supply was abundant, plastic weaving was supported by the peak season, and pipe demand was weak. The current PP delivery spot price is 6600 (-80), with overall bearish fundamentals [6]. - **Basis**: The basis of the PP 2601 contract is - 2, with a neutral position [6]. - **Inventory**: The PP comprehensive inventory is 68.1 million tons (+16.1), considered neutral [6]. - **Market**: The 20 - day moving average of the PP主力合约 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主力 is decreasing, which is bearish [6]. - **Expectation**: The PP主力合约 is expected to fluctuate weakly today due to falling crude oil prices, increased Sino - US macro risks, new production capacity, and a neutral - high inventory [6]. - **Likely Factors**: Bullish factors include geopolitical unrest providing cost support; bearish factors are weak year - on - year demand, multiple new productions in the fourth quarter, and Sino - US trade risks [7]. Supply - Demand Balance Sheets - **Polyethylene**: From 2018 to 2024, the production capacity, output, and apparent consumption of polyethylene generally showed an upward trend. The import dependence decreased from 46.3% in 2018 to 31.1% in 2023. The consumption growth rate fluctuated, with a decline in 2021 and relatively small increases in other years [13]. - **Polypropylene**: From 2018 to 2024, the production capacity, output, and apparent consumption of polypropylene also showed an upward trend. The import dependence decreased from 18.6% in 2018 to 8.4% in 2023. The consumption growth rate was positive in most years, with relatively high growth in 2019 and 2020 [15].

Report Industry Investment Rating - No relevant information provided Core Viewpoints - The domestic LLDPE and PP markets generally showed a downward trend during the period from September 19 to October 14, 2025. Market sentiment was affected by factors such as futures trends, downstream demand, and cost support. Different factors had both positive and negative impacts on polyolefin investment, and corresponding trading strategies were proposed based on comprehensive analysis [1][8][11] Summary by Relevant Catalogs Market Situation - **L Plastic**: The L2601 contract price fluctuated, with a downward trend overall. LLDPE market prices in different regions showed partial declines, and market trading was weak, with end - users mainly making purchases based on rigid demand [1][8][11] - **PP Polypropylene**: The PP2601 contract price also declined. The domestic PP market continued its downward trend, with trade mainly focused on negotiation, and overall trading volume was difficult to increase due to limited downstream new orders and low profit margins [1][8][11] Important Information - On October 9, 2025, China imposed export controls on some rare earth items, aiming to fulfill non - proliferation obligations and maintain peace, with limited impact on the supply chain. The US announced a 100% tariff increase on China and an upgrade of software controls on October 10, which China strongly opposed [1][5] - From 2024 to 2029, the global plastic additives consumption is expected to grow at a compound annual growth rate of 3.2%, which is related to the output growth of plastic end - consumption fields and changing policies and regulations [9] - On October 1, 2025, the US federal government shut down due to a budget negotiation breakdown, causing an estimated weekly economic loss of about $15 billion [11] - Seven departments issued the "Work Plan for Steady Growth of the Petrochemical and Chemical Industry (2025 - 2026)", aiming to achieve an average annual increase of over 5% in industry added value and promote high - end, green, and intelligent transformation [14] - During the "Quality Month" in September 2025, the petroleum and chemical industry promoted quality improvement through various means, which helped the high - quality development of the industry [16] Logical Analysis - **Positive Factors**: In August 2025, the electricity consumption of the domestic rubber and plastics industry increased for three consecutive months to 17.69 billion kWh, with a year - on - year increase of +8.9%, which was positive for polyolefin unilateral trading. The ratio of the Baltic Dry Index to the Baltic Crude Oil Freight Index increased by +8.5% year - on - year, showing an eight - month marginal strengthening trend, which was also positive for polyolefin unilateral trading. The US manufacturing PMI rose to 48.7 points in August 2025, accelerating for three consecutive months, which was positive for L unilateral trading [2][6][9] - **Negative Factors**: In August 2025, the profit per unit of the domestic rubber and plastics industry decreased by - 11.1% year - on - year, with a continuous decline for 18 months, which was negative for polyolefin unilateral trading. Brent crude oil prices increased to $67.6 per barrel in September 2025, with a year - on - year decrease of - 7.5% but a five - month marginal increase, which was negative for L. In August 2025, domestic PE production increased for two consecutive months to 2.827 million tons, with a year - on - year increase of +16.4% and an eight - month marginal increase, which was negative for the L - PP spread [2][6][15] Trading Strategies - **Unilateral**: Different strategies were proposed for the L and PP main 01 contracts at different times, including trial shorting, holding short positions, holding long positions, and taking a wait - and - see approach, with corresponding stop - loss levels set [2][6][9] - **Arbitrage (Long - Short)**: For the L2601 - PP2601 spread, strategies included holding positions and waiting for opportunities to enter, with stop - loss levels set at the high points of specific periods [2][6][9] - **Options**: Generally, a wait - and - see approach was recommended [2][6][9]

Report Information - Report Name: Polyolefin Morning Report - Date: October 13, 2025 - Author: Jin Zebin from Dayue Futures Investment Consulting Department [2][3] Industry Investment Rating - Not provided in the report Core Viewpoints - The market for both LLDPE and PP is expected to be weak and volatile today. The decline in crude oil prices and increased Sino-US macro risks are the main factors contributing to this trend. Additionally, the high inventory and additional production capacity in the fourth quarter also add pressure to the market [4][6] Summary by Content LLDPE Analysis - **Fundamentals**: In September, the official PMI was 49.8, up 0.4 points from the previous month, indicating a slight improvement in manufacturing but still in the contraction range. The long - term pattern of "increasing supply and decreasing demand" in crude oil has limited support for the polyolefin cost. The threat of a 100% tariff increase by Trump on October 10 has raised the possibility of an escalation of the Sino - US trade dispute, leading to a sharp drop in oil prices. On the supply - demand side, device maintenance has decreased, production load has slightly increased, and production has risen. The agricultural film industry is operating stably, and the demand for other film types is good as Double 11 approaches. The current spot price of LLDPE delivery products is 7080 (unchanged), and the overall fundamentals are bearish [4] - **Basis**: The basis of the LLDPE 2601 contract is 43, with a premium - discount ratio of 0.6%, which is bullish [4] - **Inventory**: The comprehensive PE inventory is 543,000 tons (+113,000 tons), considered neutral [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 position of the LLDPE main contract is long, which is bullish [4] - **Factors**: Bullish factors include geopolitical unrest providing cost support; bearish factors include weak demand year - on - year, significant new production capacity in the fourth quarter, and Sino - US trade risks [5] PP Analysis - **Fundamentals**: Similar to LLDPE, the manufacturing PMI improved slightly but remained in the contraction range. The decline in oil prices due to trade risks, the addition of new production capacity from Ningbo Jinfa, sufficient supply of goods, good performance of the plastic weaving industry supported by the peak season, and weak demand for pipes. The current spot price of PP delivery products is 6760 (-20), and the overall fundamentals are bearish [6] - **Basis**: The basis of the PP 2601 contract is 35, with a premium - discount ratio of 0.5%, which is bullish [6] - **Inventory**: The comprehensive PP inventory is 681,000 tons (+161,000 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 position of the PP main contract is short, with a reduction in short positions, which is bearish [6] - **Factors**: Bullish factors include geopolitical unrest providing cost support; bearish factors include weak demand year - on - year, significant new production capacity in the fourth quarter, and Sino - US trade risks [7] Market Data - **Spot and Futures Prices**: The current spot price of LLDPE delivery products is 7080 (unchanged), and the price of the 01 contract is 7037 (-40); the current spot price of PP delivery products is 6760 (-20), and the price of the 01 contract is 6722 (-23) [4][6][8] - **Inventory Data**: The LLDPE warehouse receipt is 12,795 (+66), and the comprehensive PE factory inventory is 543,000 tons; the PP warehouse receipt is 13,970 (-60), and the comprehensive PP factory inventory is 681,000 tons [8] Supply - Demand Balance Sheets - **Polyethylene**: From 2018 to 2023, the production capacity, production, and apparent consumption of polyethylene generally showed an upward trend, while the import dependence gradually decreased. In 2025, the expected production capacity is 4,319.5 [13] - **Polypropylene**: From 2018 to 2024, the production capacity, production, and apparent consumption of polypropylene showed an upward trend, and the import dependence also decreased. In 2025, the expected production capacity is 4,906 [15]

1. Report Industry Investment Rating - Not provided in the document 2. Core View of the Report - Eleven - OPEC meeting production increase resolution landed, Fed rate - cut expectation in October rose again. Cost - end crude oil and LPG prices were under pressure, polyolefin overall profit was poor, and upper - middle stream inventory at high levels started to decline. The main contradiction in the polyolefin fundamentals was the divergence in the supply of the 2601 contract. Polyethylene had only 400,000 tons of planned production capacity, while polypropylene faced greater pressure (1.45 million tons of planned production capacity). With the seasonal peak season, the LL - PP spread was expected to continue to fluctuate and strengthen. It was recommended to buy the LL - PP spread at low prices [16][17][18] 3. Summary by Relevant Catalogs 3.1 Monthly Assessment and Strategy Recommendation - **Valuation**: After the OPEC meeting during the National Day holiday, the production increase resolution was implemented, and the expectation of a Fed rate cut in October rose again [16] - **Cost - end**: WTI crude oil fell by 0.13%, Brent crude oil fell by 0.21%, coal price remained unchanged at 0.00%, methanol fell by 2.60%, ethylene fell by 4.69%, propylene fell by 4.40%, and propane fell by 10.08%. Oil prices fluctuated at a low level, and the impact of the cost - end was relatively small. The trading logic of the futures market was strongly affected by macro - sentiment [16] - **Supply - end**: PE capacity utilization was 83.6%, up 3.89% month - on - month, 1.83% year - on - year, and 10.07% lower than the five - year average for the same period. PP capacity utilization was 77.29%, down 3.38% month - on - month, 0.25% year - on - year, and 9.92% lower than the five - year average for the same period. There was a divergence in the supply of the polyolefin 2601 contract. Polyethylene had only 400,000 tons of planned production capacity, while polypropylene faced greater pressure (1.45 million tons of planned production capacity) [16] - **Import and Export**: In August, domestic PE imports were 950,200 tons, down 14.17% month - on - month and 22.11% year - on - year. PP imports were 159,600 tons, down 22.23% month - on - month and year - on - year. The export peak season arrived. In August, PE exports were 116,000 tons, up 14.12% month - on - month and 61.83% year - on - year. PP exports were 250,200 tons, up 5.99% month - on - month and 32.77% year - on - year [16] - **Demand - end**: PE downstream operating rate was 45%, up 9.60% month - on - month and 0.76% year - on - year. PP downstream operating rate was 52.00%, up 3.52% month - on - month and 1.90% year - on - year. During the seasonal peak season, the overall operating rate reached the level of the same period in previous years [17] - **Inventory**: PE production enterprise inventory was 382,700 tons, with a month - on - month destocking of 15.11% and a year - on - year destocking of 18.21%. PE trader inventory was 46,700 tons, with a month - on - month destocking of 20.25% and a year - on - year destocking of 8.43%. PP production enterprise inventory was 520,300 tons, with a month - on - month destocking of 3.38% and a year - on - year destocking of 4.93%. PP trader inventory was 187,200 tons, with a month - on - month inventory build - up of 11.30% and a year - on - year inventory build - up of 52.82%. PP port inventory was 66,500 tons, with a month - on - month inventory build - up of 10.28% and a year - on - year inventory build - up of 0.91% [17] - **Next - month Forecast**: The reference fluctuation range for polyethylene (L2601) was (7200 - 7500), and for polypropylene (PP2601) was (6900 - 7200) [18] - **Strategy Recommendation**: Buy the LL - PP spread at low prices [18] 3.2 Futures and Spot Market - The 2601 contract had a mismatch in production plans. It was recommended to buy the LL - PP spread at low prices [64] 3.3 Cost - end - Crude oil prices fluctuated at the bottom. The prices of WTI and Brent crude oil, coal, methanol, ethylene, propylene, and propane all had different degrees of decline or remained unchanged [16][85] 3.4 Polyethylene Supply - end - **Production Raw Material Proportion**: The production raw materials of PE included oil - based, coal - based, methanol - based, and light - hydrocarbon - based, with different proportions [126][128] - **Capacity and Production**: The national PE capacity and production had changed over the years, and there were also new production capacity plans in 2025. Some projects had been put into production, and some were yet to be put into production [131][132] - **Capacity Utilization**: The PE capacity utilization rate had fluctuations over time [133] - **Maintenance Plan**: There were many PE maintenance plans, including planned and unplanned maintenance, and the current week's maintenance volume and return volume were also provided [138] 3.5 Polyethylene Inventory & Import and Export - **Inventory**: The total inventory, production enterprise inventory, two - oil inventory, and trader inventory of PE all showed different trends over time [142][145] - **Import**: The monthly and cumulative import volumes of PE had changed over the years [148][150] - **Export**: The monthly export volumes of PE and LLDPE also had different trends [153] 3.6 Polyethylene Demand - end - **Downstream Demand Proportion**: The downstream demand for polyethylene was mainly concentrated in packaging film, hollow products, pipes, injection molding, agricultural film, etc [160] - **Downstream Operating Rate**: The overall downstream operating rate of PE and the operating rates of different downstream industries such as packaging film, pipes, and hollow products all had fluctuations [169][174] - **Related Indicators**: Indicators such as CPI and downstream demand cumulative year - on - year also provided information on the demand situation [165][167]

Report Industry Investment Rating No relevant content provided. Core Views - The global plastic additives market is on an upward trajectory, with an expected compound annual growth rate of 3.2% in consumption from 2024 to 2029, driven by growth in plastic - consuming end - use sectors and influenced by changing policies [2] - The domestic PE and PP markets show different trends in capacity utilization, and shipping freight indices have an impact on polyolefin investment [2] - Events such as the US federal government shutdown and changes in import volumes affect the polyolefin market [5] - Policies like the "Petrochemical and Chemical Industry Steady Growth Work Plan (2025 - 2026)" and oil price fluctuations influence the market [8][9] Summary by Related Catalogs Market Situation - **L Plastic**: L2601 contract prices and regional LLDPE prices fluctuate. For example, on 25 - 10 - 10, L2601 closed at 7153 points, down 28 points or 0.39%. Regional LLDPE prices in North, East, and South China showed weak adjustments [1] - **PP Polypropylene**: PP2601 contract prices and regional PP拉丝 prices also fluctuate. On 25 - 10 - 10, PP2601 closed at 6852 points, down 51 points or 0.74%. Domestic PP market prices declined [1] Important Information - The global plastic additives market is growing, and the consumption of plastic additives is expected to increase at a CAGR of 3.2% from 2024 to 2029 [2] - The US federal government shutdown in October 2025 caused economic losses, with an estimated weekly loss of about $15 billion [5] - Seven departments issued the "Petrochemical and Chemical Industry Steady Growth Work Plan (2025 - 2026)", aiming for an average annual increase of over 5% in industry added - value [8] Logical Analysis - Domestic PE capacity utilization has increased for 4 consecutive weeks, reaching 83.9%, a year - on - year increase of 4.2%. Domestic PP capacity utilization has increased for 3 consecutive weeks, reaching 77.7%, a year - on - year decrease of 0.1% [2] - In August 2025, the net import of polyethylene decreased to 83.4 million tons, and that of polypropylene was - 2.9 million tons, with a difference of 86.3 million tons, which is favorable for the L - PP spread [5] - In September 2025, Brent crude oil rose to $67.6 per barrel, a year - on - year decrease of 7.5%, which is negative for L [9] Trading Strategies - **Unilateral**: Different strategies are recommended for L and PP contracts on different dates. For example, on 25 - 10 - 10, the L 01 contract should be watched, and the PP 01 contract should be lightly short - tried [2] - **Arbitrage (Long - Short)**: Hold the L2601 - PP2601 spread and set stop - losses at appropriate levels. For example, on 25 - 10 - 10, the spread was +313 points [2][3] - **Options**: Generally, the option strategy is to watch [2][3][6]

Report Overview - Report Title: Polyolefin Morning Report - Report Date: September 29, 2025 - Report Author: Jin Zebin from Dayue Futures Investment Consulting Department 1. Report Industry Investment Rating - Not provided in the report 2. Report's Core View - The report analyzes the market conditions of LLDPE and PP, suggesting that due to the approaching long - holiday, cautious operation is recommended. It is expected that both LLDPE and PP will show a volatile trend today [4][6]. 3. Summary by Related Catalogs LLDPE Analysis - **Fundamentals**: In August, official PMI was 49.4, up 0.1 percentage points from last month, and Caixin PMI was 50.4, up 0.6 percentage points. China's export volume in August was $321.81 billion, a year - on - year increase of 4.4%. The overall demand is still weaker than previous years. The current LLDPE delivery spot price is 7130 (+0), with a neutral overall fundamental situation [4]. - **Basis**: The basis of LLDPE 2601 contract is - 29, and the premium - discount ratio is - 0.4%, which is neutral [4]. - **Inventory**: PE comprehensive inventory is 509,000 tons (-42,000), which is neutral [4]. - **Disk**: The 20 - day moving average of the LLDPE main contract is downward, and the closing price is below the 20 - day line, showing a bearish trend [4]. - **Main Position**: The main position of LLDPE is net short, with an increase in short positions, showing a bearish trend [4]. - **Expectation**: The LLDPE main contract is oscillating, the crude oil price is fluctuating, the demand for agricultural film is in the peak season but still weaker than previous years, and the industrial inventory is moderately high. It is expected that PE will show a volatile trend today [4]. - **Leverage and Risks**: Positive factors include geopolitical unrest and cost support; negative factors are weak demand year - on - year and many new production projects in the fourth quarter [5]. PP Analysis - **Fundamentals**: Similar to LLDPE, the macro - situation shows improved manufacturing sentiment. The downstream is gradually entering the peak season, with increased demand for pipes and plastic weaving. The current PP delivery spot price is 6780 (+30), with a neutral overall fundamental situation [6]. - **Basis**: The basis of PP 2601 contract is - 113, and the premium - discount ratio is - 1.6%, showing a bearish trend [6]. - **Inventory**: PP comprehensive inventory is 520,000 tons (-30,000), which is neutral [6]. - **Disk**: The 20 - day moving average of the PP main contract is downward, and the closing price is below the 20 - day line, showing a bearish trend [6]. - **Main Position**: The main position of PP is net short, with an increase in short positions, showing a bearish trend [6]. - **Expectation**: The PP main contract is oscillating, the crude oil price is fluctuating, the downstream demand for pipes and plastic weaving is increasing, and the industrial inventory is moderately high. It is expected that PP will show a volatile trend today [6]. - **Leverage and Risks**: Positive factors include geopolitical unrest and cost support; negative factors are weak demand year - on - year and many new production projects in the fourth quarter [7]. Market Data - **LLDPE**: The spot price of the delivery product is 7130 (unchanged), the price of the 01 contract is 7159 (-10), the basis is - 29 (+10). The PE comprehensive factory warehouse is 509,000 tons, and the social inventory is 535,000 tons [9]. - **PP**: The spot price of the delivery product is 6780 (+30), the price of the 01 contract is 6893 (-5), the basis is - 113 (+35). The PP comprehensive factory warehouse is 520,000 tons, and the social inventory is 286,000 tons [9]. Supply - Demand Balance Sheet - **Polyethylene**: From 2018 to 2025E, the production capacity has been increasing, with a planned 20.5% growth in 2025. The import dependence has been decreasing, and the consumption growth rate has fluctuated [14]. - **Polypropylene**: From 2018 to 2025E, the production capacity has also been increasing, with a planned 11.0% growth in 2025. The import dependence has been relatively low and stable, and the consumption growth rate has shown an upward trend in general [16].