1. Report Industry Investment Rating - The investment rating for the polyolefin industry is weak [1] 2. Core Viewpoints of the Report - The overall trend of polypropylene and polyethylene is weak. For polypropylene, the supply is increasing, the demand recovery is less than expected, and factors such as trade - war and high supply suppress the market price. For polyethylene, the market is affected by tariff policies, with high inventory pressure and limited cost support from crude oil [5][7] 3. Summary According to Relevant Catalogs 3.1 Viewpoint Overview Polypropylene - Supply: During 20251003 - 1009, China's polypropylene production was 796,200 tons, an increase of 11,700 tons or 1.49% from the previous period. The loss of production enterprises decreased, and the supply pressure increased after the holiday [5] - Demand: The average operating rate of downstream industries rose 0.05 percentage points to 51.76%. Although most enterprises resumed production after the holiday, the recovery was restricted by multiple factors. The demand in the automobile and home - appliance sectors is strong, and there is a possibility of further increase in the operating rate with the upcoming Double Eleven [5] - Viewpoint: Trade - war and high supply suppress the price. The market will continue to be weak, but the rhythm of the trade - war should be noted [5] - Valuation: The basis and month - spread are weak, and the short - term valuation is moderately weak. Low profits of MTO and PDH devices limit the downward space [5] - Strategy: Unilateral trading is expected to be weak with oscillations, with an upper pressure of 7000 - 7050 and a lower support of 6500 - 6550. In the short - term, buy 05 and sell 01 for inter - period trading. No recommendation for inter - variety trading [5] Polyethylene - Supply: The capacity utilization rate of Chinese polyethylene production enterprises was 83.95%, an increase of 1.86% from the previous period. There were no new maintenance devices this week, and some previous devices restarted [7] - Demand: The overall operating rate of agricultural films increased by 2.75%, and orders for shed films increased significantly. The operating rate of PE packaging films increased by 0.52%, while that of PE pipes decreased by 0.50%, and that of PE hollow increased by 0.15%. The market was affected by tariff policies, and downstream orders were mainly for replenishing stocks [7] - Viewpoint: Affected by tariff policies and inventory pressure, and with limited cost support from crude oil, the short - term trend of PE may be weak [7] - Valuation: The basis oscillates, the month - spread weakens, and the L - LL spread oscillates. The valuation is neutral [7] - Strategy: Unilateral trading is expected to be weakly oscillating, with an upper pressure of 7250 and lower supports of 6950 and 6850 for the 01 contract. No recommendation for inter - period and inter - variety trading [7] 3.2 Polypropylene Supply and Demand - Price Spread: The price spreads of powder - granular materials and copolymer - drawn materials are shrinking, which is not conducive to market stabilization [16] - Capacity Utilization: The average capacity utilization rate of polypropylene in this period was 77.75%, a 1.14% increase from the previous period. Sinopec's average capacity utilization rate was 79.69%, a 0.17% decrease [22] - Maintenance: In October, the maintenance of polypropylene is relatively low, which suppresses the rebound space. Many devices have long - term or undetermined maintenance, and some large - scale devices are scheduled for maintenance in the future [23] - New Capacity: In 2025, the potential new capacity of polypropylene is 5.055 million tons, with a capacity increase of 11.3%. The potential production pressure is still large [25] - Inventory: Both production and trader inventories of polypropylene increased month - on - month [27] - Cost: The oil price has dropped, and the oil - based production cost of polypropylene has decreased [32] - Profit: The profits of oil - based and PDH - based polypropylene production have increased [38] - Downstream Industry: For BOPP, the operating rate is stable, the order days are decreasing, the finished product inventory is increasing, and the profit is slightly recovering but still at a low level. For tape mother rolls, the operating rate is flat, and the order days are decreasing. For plastic weaving, the operating rate and order days are increasing. For non - woven fabrics, the operating rate is increasing, and the finished product inventory is moderately high. For CPP, the operating rate and order days are decreasing [40][47][49][54][57] 3.3 Polyethylene Supply and Demand - Price Spread: The L - LL and HD - LL spreads of polyethylene are oscillating [62] - Capacity Utilization: The capacity utilization rate of Chinese polyethylene production enterprises was 83.95%, an increase of 1.86% from the previous period. This week's polyethylene production was 664,200 tons, a 3.04% increase from last week [68] - Maintenance: The maintenance loss in October is less than that in September, and many devices are in long - term or undetermined maintenance states [69] - New Capacity: In 2025, the potential new capacity of polyethylene is 6.13 million tons, with a capacity increase of 17.17%. Some devices have been put into operation, and others are scheduled for commissioning in 2025 [70] - Inventory: The inventory of polyethylene production enterprises and social inventory have both increased month - on - month. The sample inventory of production enterprises was 488,600 tons, a 27.67% increase from the previous period [72][75] - Cost: The oil price has dropped, and the oil - based production cost of polyethylene has decreased [76] - Profit: The profit of oil - based polyethylene production devices has increased [83] - Downstream Industry: For agricultural films, the operating rate has increased month - on - month, and the order days have decreased. For packaging films, the operating rate and order days have both increased. For pipes and hollow products, the operating rates have decreased month - on - month [85][86][87]