1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The domestic macro sentiment is high, with the Shanghai Composite Index breaking through the 3600 - point mark, and the capital market sentiment has turned warm. Along with the "anti - involution" policy of domestic chemical enterprises, the polyolefin reverse spread market has stabilized. Currently, the crude oil price is oscillating at a low level. In the first half of the year, 3.53 million tons of PE production capacity was put into operation (70% completed), with a remaining plan of 1.5 million tons; 4.5 million tons of PP production capacity was put into operation (70% completed), with a remaining plan of 1.9 million tons. Against the background that the supply - side pressure of the polyolefin 09 contract has not been falsified, even if the agricultural film orders at the demand - side rebound, the upward momentum of the polyolefin seasonal peak season is limited [15][16]. 3. Summaries according to the Table of Contents 3.1 Week - level Assessment and Strategy Recommendation - **Policy and Valuation**: The domestic macro sentiment is high, the Shanghai Composite Index has broken through 3600 points, and the capital market sentiment has improved. The weekly increase rates of polyethylene and polypropylene are in the order of cost > futures > spot [15]. - **Cost**: Last week, WTI crude oil fell by 2.64%, Brent crude oil fell by 1.88%, coal price rose by 2.82%, methanol fell by 0.41%, ethylene rose by 3.93%, propylene rose by 3.19%, and propane remained unchanged at 0.00%. The cost - side support has weakened [15]. - **Supply**: PE capacity utilization rate is 84.72%, with a month - on - month increase of 1.53%, a year - on - year increase of 2.26%, and a decrease of 5.72% compared with the five - year average. PP capacity utilization rate is 78.80%, with a month - on - month increase of 0.74%, a year - on - year increase of 8.51%, and a decrease of 9.16% compared with the five - year average. According to the production plan, the PE production capacity will face greater pressure in August [15]. - **Import and Export**: In June, the domestic PE import volume was 959,300 tons, a month - on - month decrease of 10.19% and a year - on - year decrease of 4.63%. The PP import volume was 153,600 tons, a month - on - month decrease of 8.22% and a year - on - year decrease of 15.78%. The import profit has decreased, and the PE supply from North America has decreased, reducing the import - side pressure. In June, the PE export volume was 96,800 tons, a month - on - month decrease of 7.95% and a year - on - year increase of 48.84%. The PP export volume was 209,400 tons, a month - on - month decrease of 24.29% and a year - on - year increase of 39.35%. The 40% transit tariff imposed by the US on Vietnam, the largest destination of China's PP exports, may hinder PP exports [15]. - **Demand**: The PE downstream operating rate is 39.20%, with a month - on - month increase of 0.20% and a year - on - year decrease of 5.45%. The PP downstream operating rate is 49.35%, with a month - on - month increase of 0.92% and a year - on - year increase of 0.59%. At the end of the seasonal off - season, no increase in downstream agricultural film orders has been seen [15]. - **Inventory**: The PE production enterprise inventory is 444,500 tons, with a month - on - month destocking of 13.76% and a year - on - year destocking of 2.63%; the PE trader inventory is 60,900 tons, with a month - on - month destocking of 0.48%. The PP production enterprise inventory is 587,500 tons, with a month - on - month inventory build - up of 0.07% and a year - on - year inventory build - up of 10.25%; the PP trader inventory is 179,700 tons, with a month - on - month destocking of 4.06%; the PP port inventory is 60,500 tons, with a month - on - month destocking of 0.98% [15]. - **Prediction and Strategy**: This week, the reference oscillation range for polyethylene (LL2509) is (7200 - 7500); for polypropylene (PP2509), it is (7000 - 7300). It is recommended to continue holding the LL9 - 1 reverse spread position for profit - taking [15]. 3.2 Futures and Spot Market - In August, there are many PE production plans, and the LL - PP spread may oscillate weakly [65]. 3.3 Cost - side - **Overall Cost Changes**: The oil - based cost has decreased significantly. Last week, WTI crude oil fell by 2.64%, Brent crude oil fell by 1.88%, coal price rose by 2.82%, methanol fell by 0.41%, ethylene rose by 3.93%, propylene rose by 3.19%, and propane remained unchanged at 0.00% [15]. - **LPG - related Situation**: The gross profit of major refineries has rebounded, and the operating rate has increased. In July, the LPG shipment volume rebounded, and the supply from the Middle East continued to increase [97][117]. 3.4 Polyethylene Supply - side - **Raw Material Proportion**: The proportion of raw materials for PE production is 62.00% oil - based, 19.00% light - hydrocarbon - based, 15.00% coal - based, 3.00% methanol - based, and 1.00% purchased ethylene - based [151]. - **Capacity and Production Plan**: The total domestic PE production capacity has been increasing. In 2025, 3.53 million tons of production capacity has been put into operation, and 1.5 million tons is yet to be put into operation. Some projects have been postponed [155][157]. - **Capacity Utilization and Maintenance**: The PE capacity utilization rate and maintenance reduction volume have shown certain trends over time [160][162].