1. Report Investment Rating - Unilateral: Neutral; no suggestions for inter - period and cross - variety investments [3] 2. Core View - The PDH device maintenance is being implemented, and the supply - demand structure has slightly improved. However, due to the easing of geopolitical disturbances, the oil price has fallen from its high. In the short term, the supply - demand fundamentals and the cost side resonate. Attention should be paid to the upstream PDH maintenance dynamics and the cost - side propane changes [3] 3. Summary by Directory 3.1 Market News and Key Data - **Propylene**: The closing price of the main propylene contract is 5963 yuan/ton (- 72), the spot price in East China is 6325 yuan/ton (+ 0), and in North China is 6155 yuan/ton (+ 10). The basis in East China is 362 yuan/ton (+ 72), and in Shandong is 192 yuan/ton (+ 82). The operating rate is 75% (- 1%), the difference between China's propylene CFR and Japan's naphtha CFR is 247 US dollars/ton (- 5), the difference between propylene CFR and 1.2 propane CFR is 73 US dollars/ton (- 7), the import profit is - 294 yuan/ton (+ 44), and the in - plant inventory is 46270 tons (+ 1580) [1] - **Propylene downstream**: The operating rate of PP powder is 32% (- 5.84%), and the production profit is - 145 yuan/ton (- 20); for propylene oxide, the operating rate is 72% (- 1%), and the production profit is 186 yuan/ton (+ 70); for n - butanol, the operating rate is 87% (+ 4%), and the production profit is 672 yuan/ton (+ 44); for octanol, the operating rate is 94% (+ 5%), and the production profit is 696 yuan/ton (- 8); for acrylic acid, the operating rate is 82% (- 5%), and the production profit is 159 yuan/ton (+ 0); for acrylonitrile, the operating rate is 78% (- 1%), and the production profit is - 1470 yuan/ton (- 6); for phenol - acetone, the operating rate is 89% (+ 4%), and the production profit is - 919 yuan/ton (+ 0) [1] 3.2 Market Analysis - **Supply side**: PDH device maintenance information continues to be released. Two 900,000 - ton PDH devices of Jinneng Phase II and Wanhua Penglai are under maintenance, and a 1,000,000 - ton/year PDH device of Fujian Meide is expected to stop for a week. The operating rate of PDH devices has dropped significantly, and the spot market is tight. The expectation of PDH device maintenance in South China is increasing, and the supply pressure in the propylene market is expected to be alleviated [2] - **Demand side**: The downstream rigid demand support continues. However, after the propylene price rises to a high level, the downstream demand may be limited due to profit compression. The operating rate of PP powder has dropped significantly due to device maintenance, while the PP devices of Jingbo Petrochemical and Lihezhixin have restarted, so the demand for propylene from the PP end still exists. After the price of propylene oxide rises and then falls rapidly, the PO end's willingness to purchase raw materials may decrease. The profit of butanol and octanol is good, and new devices are put into operation or the load is increased, so the support for propylene is strong [2] - **Cost side**: The international oil price has fallen from its high and is oscillating due to the easing of the Iranian geopolitical situation, and the propane price has declined. The cost support of propylene raw materials is gradually weakening. In addition, new factory - warehouse warehouse receipts (with a discount of 100) have appeared in South China, and the futures market needs to offer a more appropriate discount, so the futures market is under pressure [2] 3.3 Strategy - **Unilateral**: Neutral. Pay attention to the upstream PDH maintenance dynamics and the cost - side propane changes [3] - **Inter - period**: No suggestions [3] - **Cross - variety**: No suggestions [3] 3.4 Propylene Basis Structure - Relevant charts include the closing price of the main propylene contract, the propylene basis in East China, the propylene basis in Shandong, the price difference between propylene 03 - 04 contracts, the price difference between PL03 - 05 contracts, and the market prices of propylene in East China, Shandong, and South China [5][6][11][12][14] 3.5 Propylene Production Profit and Operating Rate - Relevant charts involve the difference between China's propylene CFR and Japan's naphtha CFR, propylene capacity utilization rate, propylene PDH production gross profit, propylene PDH capacity utilization rate, propylene MTO production gross profit, methanol - to - olefin capacity utilization rate, propylene naphtha cracking production gross profit, crude oil main refinery capacity utilization rate, the difference between South Korea's FOB and China's CFR, and propylene import profit [5][18][20][30][31] 3.6 Propylene Downstream Profit and Operating Rate - Relevant charts cover the production profit and operating rate of PP powder, propylene oxide, n - butanol, octanol, acrylic acid, acrylonitrile, and phenol - acetone [5][39][40][45][52][53][56][60] 3.7 Propylene Inventory - Relevant charts are the propylene in - plant inventory and the PP powder in - plant inventory [5][63]

Report Summary 1. Investment Rating The report does not provide an industry investment rating. 2. Core View The short - term supply and demand of propylene are slightly tightened, and the futures price is in a range - bound consolidation. The supply pattern remains loose, but the supply pressure in the main regions has eased. The demand recovery is limited due to cost pressure. The cost support has increased recently, and the short - term rebound height may be limited. It is recommended to wait and see and pay attention to the shutdown of PDH units [1][2][3]. 3. Summary by Directory 3.1 Propylene Basis Structure The report presents data on the propylene main contract closing price, East China basis, Shandong basis, contract spreads (PL01 - 03, PL03 - 05), and market prices in East China, Shandong, and South China, with data sources from Tonghuashun and Steel Union, and the research institute of Huatai Futures [1][5][7]. 3.2 Propylene Production Profit and Operating Rate It includes information on propylene China CFR - Japanese naphtha CFR, propylene capacity utilization rate, production margins of PDH, MTO, and naphtha cracking of propylene, as well as capacity utilization rates of PDH, methanol - to - olefins, and crude oil refineries. The data sources are mainly from Steel Union and the research institute of Huatai Futures [21][24][31]. 3.3 Propylene Downstream Profit and Operating Rate It shows the production profits and operating rates of PP powder, propylene oxide, n - butanol, octanol, acrylic acid, acrylonitrile, and phenol - acetone. The data sources are from Steel Union and the research institute of Huatai Futures [37][38][39]. 3.4 Propylene Inventory The report provides data on propylene factory inventory and PP powder factory inventory, with data sources from Steel Union and the research institute of Huatai Futures [59].

Report Industry Investment Rating - Unilateral: Neutral; Inter - period: PL01 - 02 short at high prices; Inter - variety: None [3] Core Viewpoints - The cost support for propylene has weakened, leading to a decline in its price. Supply is supported by some PDH device maintenance and restart delays, while demand is weak due to price drops and cost pressure. The cost support is weakened by falling international oil prices and propane prices, but the impact of Sino - US trade frictions on propane supply needs attention [1][2] Summary by Relevant Catalogs 1. Propylene Basis Structure - Include figures on the closing price of the propylene main contract, East China and North China basis, 01 - 05 contract, and East China and Shandong market prices [6][9][11] 2. Propylene Production Profit and Operating Rate - Include figures on the difference between propylene CFR in China and naphtha CFR in Japan, propylene capacity utilization rate, PDH production gross profit and capacity utilization rate, MTO production gross profit, methanol - to - olefin capacity utilization rate, propylene naphtha cracking production gross profit, and crude oil refinery capacity utilization rate [16][23][25] 3. Propylene Import and Export Profit - Include figures on the differences between FOB in South Korea, CFR in Japan, CFR in Southeast Asia and CFR in China, and propylene import profit [32][34] 4. Propylene Downstream Profit and Operating Rate - Include figures on the production profit and operating rate of PP powder, propylene oxide, n - butanol, octanol, acrylic acid, acrylonitrile, and phenol - acetone [40][42][45] 5. Propylene Inventory - Include figures on propylene factory inventory and PP powder factory inventory [65]

1. Report Industry Investment Rating - Unilateral: Neutral; Inter - period: PL01 - 02 inter - period reverse spread; Cross - variety: None [3] 2. Core View - Supply - side overall start - up increased month - on - month, PDH device start - up rate rebounded, some major manufacturers had maintenance plans, and the expected reduction in the market supply supported propylene prices. Downstream start - up showed a mixed trend, with the start - up of phenol - acetone increasing rapidly, and the demand had a small - scale phased support. The cost of propylene decreased as crude oil weakened and propane prices declined. Attention should be paid to the geopolitical situation's impact on the crude oil end [2] 3. Summary by Directory 3.1 Market News and Important Data - Propylene: The closing price of the main propylene contract was 6,491 yuan/ton (+40), the spot price in East China was 6,400 yuan/ton (+75), and in North China was 6,540 yuan/ton (+240). The basis in East China was - 91 yuan/ton (+35), and in North China was 49 yuan/ton (+200). The propylene start - up rate was 74% (+1%), the difference between propylene CFR in China and naphtha CFR in Japan was 200 US dollars/ton (+1), the difference between propylene CFR and 1.2 propane CFR was 96 US dollars/ton (-6), the import profit was - 286 yuan/ton (+0), and the in - plant inventory was 34,420 tons (+830) [1] - Propylene downstream: PP powder start - up rate was 38% (+1.48%), production profit was - 160 yuan/ton (-150); propylene oxide start - up rate was 74% (+1%), production profit was - 271 yuan/ton (-162); n - butanol start - up rate was 89% (-7%), production profit was - 267 yuan/ton (-99); octanol start - up rate was 77% (-1%), production profit was 448 yuan/ton (-172); acrylic acid start - up rate was 79% (-1%), production profit was 406 yuan/ton (-53); acrylonitrile start - up rate was 74% (-2%), production profit was - 625 yuan/ton (-210); phenol - acetone start - up rate was 77% (+4%), production profit was - 672 yuan/ton (+0) [1] 3.2 Market Analysis - Supply side: The overall start - up increased month - on - month, PDH device start - up rate rebounded, some major manufacturers had maintenance plans, and the market supply was expected to tighten [2] - Demand side: Downstream start - up showed a mixed trend, the start - up of phenol - acetone increased rapidly, and the demand had a small - scale phased support [2] - Cost side: Crude oil weakened, and the decline in Saudi CP drove down propane prices, leading to a downward shift in propylene cost support [2] 3.3 Strategy - Unilateral: Neutral; Inter - period: PL01 - 02 inter - period reverse spread; Cross - variety: None [3] 3.4 Directory Details - **Propylene basis structure**: Includes figures such as the closing price of the main propylene contract, East China and North China basis, etc. [7][10][12] - **Propylene production profit and start - up rate**: Involves figures like the difference between propylene CFR in China and naphtha CFR in Japan, propylene capacity utilization rate, etc. [17][24][29] - **Propylene import and export profit**: Covers figures such as the difference between South Korea FOB and China CFR, Japan CFR and China CFR, etc. [32][34] - **Propylene downstream profit and start - up rate**: Contains figures like PP powder production profit and start - up rate, propylene oxide production profit and start - up rate, etc. [40][45][50] - **Propylene inventory**: Includes figures of propylene in - plant inventory and PP powder in - plant inventory [67]

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The propylene market in Shandong has shifted from tight supply before 2016 to near - balance or even oversupply currently due to the high - speed commissioning of propylene plants, especially PDH and naphtha cracking plants [4][12][28]. - After the listing of propylene futures, the market mainly trades on strong macro - policy expectations. The "anti - involution" policy is expected to promote the rectification and elimination of old - fashioned plants, which may reduce propylene supply and have a positive impact, but the extent remains to be tracked [14]. - In the short term, the propylene market shows a weak consolidation. Supply pressure persists with expected increases in propylene circulation due to plant restarts and new capacity releases. Demand has some short - term support but may not be sustainable during the off - season. Cost support from rising oil prices is offset by supply - demand pressures, resulting in a downward - pressured price trend [14]. Summary by Directory 1. Research Purpose - Explore the impact of propylene futures listing on the industry and understand the supply - demand situation of the propylene market in Shandong [10][11]. 2. Research Conclusion - **Supply - Demand Pattern**: Shandong's propylene production capacity exceeds 15 million tons, accounting for 21% of the national total, and the external sales volume accounts for 39%. It has changed from a supply - tight to a near - balanced or oversupplied market. There is a demand gap of nearly 600,000 tons, and it is a major propylene - importing province. Propylene flows in from the Northeast, Northwest, North, and Central China and flows out to East China [4][12][25]. - **Trading Mode**: Shandong is the national price benchmark for propylene, with earlier spot quotations. Contract sales in Shandong are less than 50%. Contracts are usually signed annually and settled monthly, while spot sales are full - payment locked - price. The flow of goods is determined by price differences, freight, and demand [4][12]. - **Cost - Profit**: The propane consumption of PDH plants is between 1.14 - 1.2, and the theoretical processing cost is between 1200 - 1500 yuan. The full cost of PDH - produced propylene is around 6100 - 6300 yuan/ton. Freight varies by transportation mode [4][15]. - **Inventory**: Inventory varies among enterprises. PDH enterprises generally have larger storage capacity and longer storage periods. During the research, enterprises reported low inventory and no obvious inventory pressure [4][15]. 3. Core Logic and Future Outlook - After the listing of propylene futures, the market is influenced by macro - policy expectations. The "anti - involution" policy may reduce supply, but the impact needs further observation. Currently, the market is in weak consolidation. Supply pressure exists due to plant restarts and new capacity, demand has short - term support but limited sustainability, and cost support is offset by supply - demand pressures [14]. 4. Specific Situations of Research Enterprises - **Enterprise A**: Total propylene capacity is 70,000 tons/year, using catalytic cracking. All products are sold externally. Current external sales are about 270 tons/day. The enterprise believes the market is oversupplied and focuses on PDH operations [15][16]. - **Enterprise B**: Total capacity is 355,000 tons/year, with 105,000 tons from catalytic cracking and 250,000 tons from PDH. One of the two gas - fractionation units is operating, with an output of about 75 tons/day. The PDH unit has been shut down for over three months [17]. - **Enterprise C**: Total capacity is 420,000 tons/year, with a 70% load on the mixed - alkane dehydrogenation unit. By - product hydrogen is sold externally. The acrylic acid unit is operating, and the propylene oxide unit is shut down due to profit issues [20]. - **Enterprise D**: Total capacity is 380,000 tons/year, with 80,000 tons from catalytic cracking and 300,000 tons from PDH. Only the gas - fractionation unit is operating, with an output of about 200 tons/day. The PDH unit is shut down [22]. - **Enterprise E**: Total capacity is 600,000 tons/year, using PDH. The PDH unit is operating at 90% load. The enterprise has a low - inventory strategy and is bearish on the market [24]. 5. Analysis of the Supply - Demand Pattern of Shandong Propylene - Shandong is a major propylene production and sales area, with a production capacity exceeding 15 million tons, accounting for 21% of the national total and an external sales volume accounting for 39%. There are regional differences within Shandong. There is a demand gap of nearly 600,000 tons, and the market has shifted from tight supply to near - balance or oversupply [25][27][28].