1. Report Industry Investment Rating - Not provided 2. Core Viewpoints - PP is expected to trade in a range as its supply - demand pattern improves limitedly and downstream order cycles shorten. The L - PP spread is expected to narrow due to new plastic production capacity and a decline in agricultural film orders [1]. 3. Summary by Relevant Catalogs 3.1 Market Analysis - As of the week of January 16th, after the New Year's Day holiday, the PP downstream operating rate decreased by 0.07 percentage points to 52.53% week - on - week, at a relatively low level in the same period over the years. The operating rate of plastic weaving, the main downstream of drawstring PP, dropped 0.32 percentage points to 42.6% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [1]. - On January 16th, there were few changes in maintenance units, and the PP enterprise operating rate remained at around 81%, a moderately low level, with the production ratio of standard drawstring PP dropping to around 24% [1][4]. - The petrochemical inventory is at a relatively low level in the same period in recent years after good destocking after the New Year's Day holiday. The cost of crude oil has declined as the situation in Iran cools down. There is new production capacity of 400,000 tons/year from PetroChina Guangxi Petrochemical, and there are slightly fewer maintenance units recently. Although the downstream BOPP film price rebounded, new orders for downstream plastic weaving are limited due to the approaching Spring Festival holiday [1]. 3.2 Futures and Spot Market Conditions - Futures: The PP2605 contract decreased with reduced positions, closing at 6496 yuan/ton, down 1.67%. The trading volume was between 6489 - 6604 yuan/ton, and the open interest decreased by 5929 lots to 485,733 lots [2]. - Spot: Most PP spot prices in various regions declined. The drawstring PP was quoted at 6240 - 6680 yuan/ton [3]. 3.3 Fundamental Tracking - Supply: On January 16th, there were few changes in maintenance units. The PP enterprise operating rate remained at around 81%, a moderately low level, and the production ratio of standard drawstring PP dropped to around 24% [4]. - Demand: As of the week of January 16th, after the New Year's Day holiday, the PP downstream operating rate decreased by 0.07 percentage points to 52.53% week - on - week, at a relatively low level in the same period over the years. The operating rate of plastic weaving, the main downstream of drawstring PP, dropped 0.32 percentage points to 42.6% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [4]. - Inventory: The petrochemical early - morning inventory on Friday decreased by 40,000 tons to 490,000 tons week - on - week, 15,000 tons lower than the same period last year. The destocking was good after the New Year's Day holiday, and the current petrochemical inventory is at a relatively low level in the same period in recent years [4]. 3.4 Raw Material End - Brent crude oil's March contract fell below $64 per barrel, and the CFR propylene price in China remained flat week - on - week at $750 per ton [6].