Report Summary 1. Industry Investment Rating No industry investment rating is provided in the report. 2. Core Views - For LLDPE, the spot price is stable, and the futures market is oscillating with a slightly upward trend. In the short - term, there is no obvious driving force, and it is expected to oscillate mainly [2]. - For PP, the spot price is stable, and the futures market is oscillating with a slightly downward trend. In the short - term, there is no obvious driving force, and it is expected to oscillate mainly [3]. 3. Summary by Directory LLDPE Analysis - **Supply**: This week, China's LLDPE production was 318,900 tons, up 3.21% from last week. The capacity utilization rate of Chinese polyethylene producers was 83.95%, an increase of 1.86 percentage points from the previous period. There were no new maintenance devices this week, and some existing devices restarted [2]. - **Demand**: The average operating rate of Chinese LLDPE/LDPE downstream products increased by 1.64% from the previous period. The cumulative import volume in 2025 was 8.9816 million tons, a year - on - year decrease of 0.84%. In August, China's polyethylene imports decreased year - on - year and month - on - month [2]. - **Inventory**: The inventory of Chinese polyethylene producers was 488,600 tons, up 27.67% from the previous period. The inventory trend changed from decreasing to increasing. The social sample warehouse inventory of polyethylene was 546,600 tons, a month - on - month decrease of 2.44% and a year - on - year decrease of 15.44% [2]. - **Basis**: The current basis of the main contract is around 315, and the futures price is at a discount [2]. - **Profit**: This week, the cost of ethane production increased, while the costs of oil - based, coal - based, ethylene - based, and methanol - based production decreased. International oil prices fell due to the easing of the Palestine - Israel situation and potential risks from US tariff issues [2]. - **Valuation**: The spot price and the absolute futures price are neutral, and the near - month contract is at a deep discount [2]. - **Macro Policy**: The macro - sentiment has subsided, trading has returned to fundamentals, and the futures market is oscillating with a slightly upward trend [2]. PP Analysis - **Supply**: The average capacity utilization rate of polypropylene was 77.75%, a month - on - month increase of 1.14%. The average capacity utilization rate of Sinopec was 79.69%, a month - on - month decrease of 0.17% [3]. - **Demand**: The operating rate increased by 0.59 percentage points to 51.45%. After the Mid - Autumn Festival and National Day holidays, the demand for terminal food packaging and medical non - woven fabrics increased [3]. - **Inventory**: The inventory of Chinese polypropylene producers was 681,400 tons, a month - on - month increase of 30.96%. The port sample inventory and the inventory of trading companies also increased [3]. - **Basis**: The current basis of the main contract is around - 12, and the futures price is around par [3]. - **Profit**: This week, the profits of external propylene - based and PDH - based PP production improved, while the profits of oil - based, coal - based, and methanol - based PP production declined. International oil prices rose, and the price of thermal coal remained strong [3]. - **Valuation**: The spot price and the absolute futures price are neutral, and the near - month contract is at a premium [3]. - **Macro Policy**: The macro - sentiment has subsided, trading has returned to fundamentals, and the futures market is oscillating with a slightly downward trend [3]. Main Weekly Data Changes - **Prices**: PP futures price decreased by 1.90%, PE futures price decreased by 1.62%, PP spot price decreased by 2.61%, and LLDPE spot price decreased by 0.69% [5]. - **Production**: PP production decreased by 7.25%, PE production increased by 3.04%, HDPE production increased by 1.45% [5]. - **Operating Rates**: PP operating rate increased by 5.40%, PE operating rate increased by 2.26% [5]. - **Inventory**: PP factory inventory increased by 52.16%, PE social inventory decreased by 4.63% [5].

Report Industry Investment Rating - The report gives a rating of "oscillating operation" for the plastics industry [1] Core Viewpoint - The plastics market is expected to oscillate at a low level in the near future due to factors such as increased supply from restarted and newly - commissioned plants, low downstream demand, high inventory pressure, and falling energy prices [1] Summary by Related Catalogs Strategy Analysis - Recommend to close long positions. The restart of maintenance devices has increased the plastics operating rate to about 87%, reaching a neutral level. The downstream operating rate of PE has decreased to 38.69%, with a decline in agricultural film orders and a slight increase in packaging film orders. Petrochemical inventory is at a neutral level. The US tariff increase and restricted ethane imports, along with the cooling of geopolitical risks in the Middle East and falling oil prices, contribute to the expected low - level oscillation of plastics [1] Futures and Spot Market Conditions - **Futures**: The plastics 2509 contract oscillated with reducing positions, closing at 7271 yuan/ton, down 0.27%. The trading volume decreased by 12,263 lots to 461,763 lots [2] - **Spot**: Most PE spot prices fell, with price changes ranging from - 200 to + 50 yuan/ton. LLDPE was quoted at 7260 - 7590 yuan/ton, LDPE at 9580 - 9830 yuan/ton, and HDPE at 7700 - 8100 yuan/ton [3] Fundamental Tracking - **Supply**: The restart of maintenance devices in Dushanzi Petrochemical and Tarim Petrochemical has increased the plastics operating rate to about 87%, reaching a neutral level [1][4] - **Demand**: As of the week of June 20, the downstream operating rate of PE decreased by 0.06 percentage points to 38.69%. Agricultural film entered the off - season, with a decline in orders and a slight increase in raw material inventory. Packaging film orders increased slightly, and the overall downstream operating rate was at a relatively low level compared to the same period in previous years [1][4] - **Inventory**: Petrochemical inventory decreased to 76.5 tons on Wednesday, 2.5 tons higher than the same period last year. It is at a neutral level compared to the same period in previous years [1][4] - **Raw Materials**: Brent crude oil 08 contract fell to $68/barrel. Northeast Asian ethylene prices remained flat at $860/ton, and Southeast Asian ethylene prices remained flat at $850/ton [4]

Group 1 - The main plastic futures contract experienced a rapid increase, reaching a peak of 7339.00 yuan, with a closing price of 7339.00 yuan, reflecting a rise of 2.66% [1] - Zhonghui Futures suggests a bearish outlook for plastic, citing an increase in supply with 2.08 million tons of new capacity from companies like Wanhua and the startup of Shandong New Era's facility [2] - Shenyin Wanguo Futures indicates that the short-term trend for plastic will continue to rebound and repair prices, supported by a recent rebound in international crude oil prices [3] Group 2 - The demand side shows a decline in agricultural film operating rates for four consecutive weeks, indicating weak demand [2] - The overall sentiment in the commodity market is positive due to the recent consensus reached during the China-US meeting, which may support plastic prices [3] - The recommendation from Zhonghui Futures is to gradually take profits on long positions and avoid chasing higher prices, while monitoring the price trends of crude oil and coal [2]