1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - In March 2026, polyolefins are likely to be strongly boosted by geopolitical tensions. As the second quarter is the peak demand season for polyolefins, they are expected to perform strongly in the future [6]. 3. Summary by Directory Macro - level China - In January 2026, the year - on - year growth rate of broad money M2 reached 9%, a two - year high. The Manufacturing Purchasing Managers' Index (PMI) was 49.3%, a 0.8 - percentage - point decrease from the previous month, indicating a decline in manufacturing prosperity [7]. - In January 2026, the national consumer price index rose 0.2% year - on - year and 0.2% month - on - month. The ex - factory price of industrial producers decreased 1.4% year - on - year, with the decline narrowing by 0.5 percentage points compared to the previous month, and rose 0.4% month - on - month [9]. - The latest macroeconomic data shows that monetary easing is intensifying. The improvement in PPI indicates better demand and the initial success of the national anti - involution policy, which is conducive to improving corporate profits and demand. With continuous loose policies, the domestic macro - level is expected to continue its recovery [11][12]. International - In January 2026, the US CPI decreased 0.3% from the previous month to 2.4%. In December 2025, the Eurozone CPI decreased 0.1% from the previous month to 2%. The Eurozone faces greater economic recession pressure with lower inflation. The relatively low inflation in Europe and the US is conducive to further interest rate cuts to boost the economy [13]. - In January 2026, the US manufacturing PMI rose 4.7 percentage points to 52.6%, and the unemployment rate decreased 0.1% to 4.3%. Although the decline in US inflation is conducive to interest rate cuts, the improvement in manufacturing PMI and the decrease in unemployment rate reduce the urgency of the Fed to cut interest rates, but it is still likely to continue the easing cycle [15][17]. - The sudden attack by the US and Israel on Iran has led to a tense situation. Iran has counter - attacked, and the Islamic Revolutionary Guard Corps has banned ships from passing through the Strait of Hormuz. OPEC + may consider further increasing production, but the main problem may be transportation. If Iran disrupts the supply through the Strait of Hormuz, oil prices may soar, which will strongly boost polyolefins [18][19][20]. Fundamental - level PE - In February 2026, polyethylene supply decreased. The capacity utilization rate was 87.63%, a 3.79 - percentage - point increase from the previous period, and the output was 290.67 tons, a 4.98% decrease from the previous period, mainly due to 3 fewer production days [20]. - In February 2026, polyethylene downstream demand declined. Affected by the Spring Festival, the overall downstream industry's average opening rate was 21.6%, a 18.26 - percentage - point decrease from the previous month. The average opening rate of the PE packaging film industry was 26.04%, a 20% decrease from the previous month, and the overall opening rate of the agricultural film decreased 18.3% month - on - month [23]. - In February 2026, the social inventory of polyethylene increased. The social sample warehouse inventory at the end of February was 59.78 tons, a 11.28 - ton increase from the previous month, a 23.26% increase. During the Spring Festival, production enterprises maintained high - load production while downstream factories were on holiday, leading to passive inventory accumulation [25]. - In February 2026, due to the Spring Festival, polyethylene supply and demand both decreased, and inventory increased. The price was generally weak. The average price of low - pressure film was 7463 yuan/ton, a 0.27% increase from the previous month; the average price of high - pressure film was 8543 yuan/ton, a 3.52% decrease from the previous month; the average price of linear film was 6871 yuan/ton, a 0.16% increase from the previous month [27]. PP - In February 2026, PP supply decreased. The total output of polypropylene was 311.52 tons, a 32.85 - ton decrease from January 2026, a 9.54% decrease. There was no new capacity put into operation, and the overall production enterprise opening rate changed little. The total output decreased due to 3 fewer days in the month [28]. - In February 2026, PP downstream demand declined. The apparent consumption of polypropylene decreased 9.74% month - on - month. The opening rates of injection molding, modification, BOPP, and pipes decreased significantly, with decreases of 21.29%, 15.02%, 10.29%, and 10.29% respectively. The average opening rate of downstream industries was 39.14%, a 13.43 - percentage - point decrease from the previous month [29]. - In February 2026, both the inventory of PP production enterprises and traders increased. At the end of February 2026, the inventory of production enterprises was 73.99 tons, an 84.56% increase from the end of the previous month. The inventory of traders was 24.97 tons, a 36.15% increase from the end of the previous month. The Spring Festival led to inventory accumulation and low downstream purchasing enthusiasm [32]. - In February 2026, affected by the Spring Festival, PP also showed a situation of decreased supply and demand and increased inventory. But boosted by the positive macro - outlook, the market was in high - level consolidation. The national average price of drawn wire was 6654 yuan/ton, an 185 - yuan/ton increase from the previous month, a 2.86% increase [35]. Market Outlook PE - In March 2026, the domestic capacity utilization rate of polyethylene is expected to decrease 2.41% month - on - month, and the total supply will increase 6.7% month - on - month. On the demand side, the opening rates of traditional downstream industries such as packaging film and agricultural film are expected to gradually recover, and exports are expected to increase 61.9% month - on - month. The total demand is expected to increase 8% month - on - month. Overall, supply pressure will be relieved, demand will moderately recover, and the polyethylene market price is expected to rise slightly [36]. PP - In March 2026, polypropylene enters the traditional peak demand season of "Golden March and Silver April". Supply and demand will shift from surplus to tight balance, but the concentrated inventory reduction and the late resumption of work in downstream factories compared to upstream lead to a low negative value of the supply - demand gap. In March, the output of polypropylene will increase rapidly month - on - month, and with continuous inventory reduction pressure, imports will increase. However, as exports enter the peak season, it is expected to continue the net export trend. In March, consumption in all downstream fields of polypropylene will increase, and demand will dominate the market trend [36]. - From April to May, as polypropylene enters the seasonal maintenance peak season, supply pressure will weaken. Demand will continue to improve, and the inventory of polypropylene is expected to be smoothly reduced in the second quarter. The negative value of the supply - demand gap will reach the peak of the year, which is expected to strongly support the market price [36].