Report Industry Investment Rating No relevant content provided. Core View of the Report Since August, affected by the restart of multiple domestic petrochemical plants, the supply of polyethylene has increased, while the demand improvement is insufficient, leading to an increase in inventory. At the same time, the decline in crude oil prices has weakened the cost support for plastics. As a result, the domestic plastic futures 2601 contract has shown a weak and volatile trend recently, with limited room for continued growth [2]. Summary by Related Catalogs Crude Oil Futures Decline and Weaken Plastic Costs - In early August, 8 major OPEC+ oil - producing countries decided to increase production by 547,000 barrels per day in September. From April to August 2025, OPEC+ countries cumulatively increased production by 1.919 million barrels per day, reversing the voluntary production cut of 2.2 million barrels per day implemented in November 2023 [3]. - The consumer side of the crude oil futures market faces a potential threat of seasonal weakening. As of the week ending August 1, 2025, the US refinery operating rate was 96.9%, but it is expected to decline after late August, and the crude oil inventory destocking will slow down [3]. - With the increasing supply pressure and weakening demand in the crude oil futures market, the cost support for plastic futures is expected to weaken [3]. Increase in Domestic Polyethylene Supply Pressure - Since August, multiple domestic petrochemical plants such as Sinochem Quanzhou, Fujian United, and Lanzhou Petrochemical have restarted. Coupled with the new production of Jilin Petrochemical's 400,000 - ton/year HDPE plant in July, the weekly polyethylene production has increased [4]. - As of the week ending August 8, 2025, the domestic polyethylene plant capacity utilization rate was 85.72%, a week - on - week increase of 3.75%. The polypropylene production reached 660,200 tons, a week - on - week increase of 24,700 tons. In July, the domestic polyethylene production increased by 4.48% to 2.7264 million tons [4]. - At the end of July, the social sample warehouse inventory increased by 10.77% to 561,700 tons, and the continuous growth of the upstream supply side has put great pressure on plastic futures prices [4]. Weak Downstream Demand with Future Improvement Expected - In July 2025, the overall average operating rate of the domestic plastic downstream industry dropped to 38.3%, a record low for the same period [5]. - In August, the operating rates of PE packaging film and agricultural film sample enterprises increased slightly week - on - week, but the overall order follow - up is poor, and the polyethylene social inventory continued to accumulate [5]. - Currently, the supply - demand fundamentals of the domestic plastic market are still weak. The supply is increasing due to plant restarts, while the demand is restricted by the off - season. The inventory accumulation pressure remains, and the plastic futures 2601 contract is expected to maintain a weak and volatile trend [2][5].

Group 1: Report Industry Investment Rating - Not provided Group 2: Core Viewpoints of the Report - L2509 fluctuated weakly, closing at 6,972 yuan/ton. In the short - term, the industry supply pressure is not significant, but in the medium - to - long - term, there is an expectation of increased supply. The demand side is unlikely to improve significantly as the downstream enters the off - season. The plastics fundamentals are weak, but due to the 09 contract's discounted price on the disk and low price level, a cautious bearish view is taken. Attention should be paid to the support around 6,930 [2] Group 3: Summary by Relevant Catalogs Futures Market - The closing prices of polyethylene futures contracts decreased, with the main contract closing at 6,972 yuan/ton, down 35 yuan/ton. The trading volume decreased by 18,981 lots to 341,402 lots, while the open interest increased by 4,902 lots to 532,123 lots. The net long position of the top 20 futures holders decreased by 625 lots to - 86,096 lots [2] Spot Market - The average prices of LLDPE (7042) in North and East China decreased, with the North China average at 7,144.35 yuan/ton, down 63.04 yuan/ton, and the East China average at 7,345.85 yuan/ton, down 62.68 yuan/ton. The basis was 172.35 yuan/ton, down 28.04 yuan/ton [2] Upstream Situation - The FOB middle price of naphtha in Singapore increased by 0.19 dollars/barrel to 61.3 dollars/barrel, and the CFR middle price of naphtha in Japan increased by 0.87 dollars/ton to 567 dollars/ton. The ethylene CFR prices in Southeast Asia and Northeast Asia remained unchanged [2] Industry Situation - The national PE petrochemical operating rate decreased by 1.57 percentage points to 77.95% [2] Downstream Situation - The operating rates of PE in packaging film, pipes, and agricultural film showed different trends. The packaging film operating rate increased by 0.49 percentage points to 49.19%, the pipe operating rate decreased by 0.17 percentage points to 32%, and the agricultural film operating rate decreased by 2.63 percentage points to 14.05% [2] Option Market - The 20 - day historical volatility of polyethylene increased by 0.06 percentage points to 14.81%, and the 40 - day historical volatility decreased by 0.03 percentage points to 18.65%. The implied volatilities of at - the - money put and call options increased [2] Industry News - From May 16th to 22nd, China's polyethylene production decreased by 1.98% to 598,000 tons, and the capacity utilization rate decreased by 1.43 percentage points to 77.95%. The average operating rate of downstream polyethylene products increased by 0.13% [2] Inventory - As of May 28th, the inventory of polyethylene production enterprises decreased by 3.29% to 482,000 tons, and as of May 23rd, the social sample warehouse inventory increased by 0.52% to 613,800 tons [2]