Report Industry Investment Rating - The report does not provide an industry investment rating. Core Viewpoints - This week, the LPG price was mainly affected by the weakening domestic fundamentals, with an increase in supply and a decrease in demand expectations, leading to a significant decline in the disk price. However, the price rebounded slightly on Friday night due to the influence of the SASAC's "anti - involution" policy, and the market volatility increased [2][6]. - In the short - term, the LPG market is expected to be in a volatile state, with the price range of PG01 predicted to be between 4000 - 4500 yuan/ton [16]. - In the long - term, the LPG market is affected by multiple factors on both the supply and demand sides. The supply pressure from the US is relatively large, while the demand in different regions shows different characteristics [13]. Summary by Directory Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - Cost - end: Crude oil was under the pressure of oversupply and geopolitical issues, and it oscillated weakly this week but remained within the oscillation range [1]. - Overseas market: It was relatively strong. US demand increased and inventory decreased, while Middle - East shipments remained at a low level. The FEI premium was $37.25, and the CP premium was $42 [1]. - Domestic fundamentals: They weakened slightly. The supply increased due to the rise in arrivals, and port inventory accumulated. On the demand side, although PDH started to operate at a higher rate due to the resumption of production in some enterprises, there were rumors of maintenance plans, and the demand expectation weakened. The number of warrants increased to 5476 this week [1][6]. 1.2 Trading - type Strategy Recommendations - Market positioning: Oscillation, with the price range of PG01 at 4000 - 4500 yuan/ton [16]. - Basis strategy: Oscillation. The basis strengthened as the disk price fell from its high this week [16]. - Spread strategy: Reverse arbitrage (3 - 4) at high prices [16]. - Hedging and arbitrage strategy: Narrow the internal - external spread and widen the PP/PG ratio at low prices [16]. 1.3 Industrial Customer Operation Recommendations - LPG price range forecast: 4000 - 4500 yuan/ton, with a current volatility of 23.00% and a historical percentage of 40.18% in the past 3 years [17]. - Hedging strategy: For inventory management, when inventory is high, short PG futures and sell call options; for procurement management, when inventory is low, buy PG futures and sell put options [17]. Chapter 2: This Week's Important Information and Next Week's Attention Events 2.1 This Week's Important Information - Positive factors: The Fed cut interest rates by 25BP as expected, and the overseas market remained tight with high premiums [24]. - Negative factors: The number of warrants increased to 5476, and the PDH maintenance expectation increased [24]. 2.2 Next Week's Attention Events - On December 16, pay attention to the US unemployment rate; on December 18, pay attention to the US CPI year - on - year. Also, focus on the further implementation of high - energy - consumption project control [24]. Chapter 3: Disk Interpretation Unilateral Trend and Capital Movement - The PG01 contract oscillated and declined this week. The net positions of major profitable seats decreased slightly, and the long positions of the top 5 in the order book decreased significantly, while the short positions of the top 5 remained unchanged. The net short positions of powerful seats decreased slightly, and the net long positions of foreign investors decreased slightly while those of retail investors increased slightly [21]. Basis and Spread Structure - The LPG term structure remained in a BACK structure this week, with the 1 - 2 spread at 84 yuan/ton (+5) [25]. - In the overseas market, the FEI M1 - M2 spread was $19/ton (+6); the CP M1 - M2 spread was $9/ton (+4.5); the MB M1 - M2 spread was $2.9/ton (-3.25). FEI and CP were generally suitable for positive arbitrage [37]. Chapter 4: Valuation and Profit Analysis Upstream Profits - The gross profit of major refineries was 645 yuan/ton (+52), and that of Shandong independent refineries was 443 yuan/ton (-12). The profit fluctuations were not significant this week [42]. Downstream Profits - The PDH profit calculated by FEI was - 237 yuan/ton (+109), and that calculated by CP was - 553 yuan/ton (+16), indicating continuous losses. The MTBE gas - separation profit was - 63.75 yuan/ton (-1.25), the isomerization profit was - 188 yuan/ton (-138), and the alkylation oil profit was - 473 yuan/ton (-61) [44]. Chapter 5: Supply, Demand, and Inventory 5.1 Overseas Supply and Demand - US supply and demand: With the cooling weather, weekly demand improved significantly, but production was relatively high, and inventory decreased at a normal rate. From January to November, US LPG exports increased year - on - year, but the volume to China decreased [52][57]. - Middle - East supply: From January to November, Middle - East LPG exports increased year - on - year. Shipments were low in November due to high domestic demand [60]. - Indian supply and demand: From January to November, India's LPG demand and imports increased year - on - year. The second half of the year was the peak season, with high demand and imports [62]. - South Korean supply and demand: The seasonality of LPG demand was not obvious. The import volume was expected to remain at a relatively high level, but there was a slight increase in November and a recent rebound [65]. - Japanese supply and demand: Japan was highly dependent on LPG imports, and the demand and import seasonality were obvious. The import volume was expected to increase with the cooling weather [68]. 5.2 Domestic Supply and Demand - Supply: With high refinery profits, domestic LPG production was expected to remain at a high level, but the external supply volume was not high, and the import volume was also low [72]. - Demand: Based on profit and seasonality, chemical demand decreased while combustion demand increased. The chemical demand in the fourth quarter was better than expected [72]. - Inventory: There was a slight reduction in overall inventory, mainly at the port [73].