Report Industry Investment Rating - Not provided in the content Core Viewpoints - The recent rise in polyolefins is driven by both supply contraction expectations and a significant increase in cost. The ongoing US-Iran conflict has disrupted shipping in the Strait of Hormuz, affecting the supply of raw materials such as crude oil, methanol, and propane. This has led to potential defensive production cuts by domestic olefin enterprises, with some already reducing production. Geopolitical conflicts have also pushed up international oil prices and propane prices, strengthening cost support and boosting polyolefin prices [3]. - For PE, there are few planned maintenance activities in March and April. Although the actual production cuts of other enterprises are yet to be realized, the demand side is gradually recovering after the holiday, with downstream restocking and rising spot prices. The short - term geopolitical disturbances may continue to drive up plastic prices [3]. - For PP, the impact of the Iran situation on overseas PP supply is relatively small. It is mainly driven by cost increases and supply contractions. The deepening loss of PDH production profit may lead to an extended peak of PDH maintenance. The demand side is also improving, and short - term cost increases and supply contraction expectations will continue to boost prices [4]. Summary by Directory 1. Polyolefin Basis and Inter - period Structure - The L main contract closed at 7355 yuan/ton (+155), and the PP main contract closed at 7506 yuan/ton (+283). The LL North China spot price was 7150 yuan/ton (+150), the LL East China spot price was 7200 yuan/ton (+100), and the PP East China spot price was 7300 yuan/ton (+270). The LL North China basis was - 205 yuan/ton (-5), the LL East China basis was - 155 yuan/ton (-55), and the PP East China basis was - 206 yuan/ton (-13) [1] 2. Production Profit and Operating Rate - The PE operating rate was 88.0% (-0.5%), and the PP operating rate was 75.5% (-0.4%). The PE oil - based production profit was - 673.0 yuan/ton (+8.6), the PP oil - based production profit was - 983.0 yuan/ton (+8.6), and the PDH - based PP production profit was - 1853.0 yuan/ton (+303.9) [1] 3. Polyolefin Non - standard Price Difference - Not provided in the content 4. Polyolefin Import and Export Profits - The LL import profit was 279.6 yuan/ton (+276.2), the PP import profit was - 370.2 yuan/ton (+15.2), and the PP export profit was - 107.7 US dollars/ton (-39.2) [1] 5. Polyolefin Downstream Operating Rate and Downstream Profits - The PE downstream agricultural film operating rate was 10.1% (-14.7%), the PE downstream packaging film operating rate was 24.7% (+4.4%), the PP downstream plastic weaving operating rate was 29.3% (+5.2%), and the PP downstream BOPP film operating rate was 47.7% (+4.9%) [2] 6. Polyolefin Inventory - Not provided in the content Strategies - Unilateral: Cautiously go long on LLDPE and PP for hedging; Inter - period: None; Cross - variety: None [5]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The co - upward movement of propylene's futures and spot prices is mainly driven by the expected supply contraction and a significant increase in the cost side. The ongoing conflict between the US and Iran has affected the supply of raw materials, leading to potential production cuts by domestic olefin enterprises. The rise in international oil prices and the increase in the price of external propane have also boosted the cost of propylene. On the supply side, the peak of PDH maintenance may continue, providing support for prices. On the demand side, the downstream start - up rate is gradually recovering after the holiday, but the demand follow - up under the profit pressure of other downstream products needs to be observed [2] Summary by Directory 1. Propylene Basis Structure - Propylene's main contract closing price is 7088 yuan/ton (+98), the East China spot price is 7000 yuan/ton (+350), the North China spot price is 7015 yuan/ton (+375), the East China basis is - 88 yuan/ton (+252), and the Shandong basis is - 73 yuan/ton (+277) [1] 2. Propylene Production Profit and Capacity Utilization - Propylene's capacity utilization rate is 72% (+0%), the difference between China's propylene CFR and Japan's naphtha CFR is 143 US dollars/ton (-2), the difference between propylene CFR and 1.2 propane CFR is - 94 US dollars/ton (+20), and the import profit is - 586 yuan/ton (-188) [1] 3. Propylene Downstream Profit and Capacity Utilization - PP powder's capacity utilization rate is 24% (+1.99%), with a production profit of 55 yuan/ton (-115); epoxy propane's capacity utilization rate is 80% (+0%), with a production profit of - 234 yuan/ton (+0); n - butanol's capacity utilization rate is 85% (-3%), with a production profit of 629 yuan/ton (-142); octanol's capacity utilization rate is 97% (-2%), with a production profit of 77 yuan/ton (-70); acrylic acid's capacity utilization rate is 80% (-7%), with a production profit of 830 yuan/ton (+52); acrylonitrile's capacity utilization rate is 76% (+0%), with a production profit of - 1315 yuan/ton (-194); phenol - acetone's capacity utilization rate is 88% (-1%), with a production profit of - 158 yuan/ton (+100) [1] 4. Propylene Inventory - The in - plant inventory of propylene is 44,970 tons (-200) [1] Strategies - Unilateral: Cautiously go long on hedging at low prices - Inter - period: None - Inter - variety: None [3]

Report Industry Investment Rating No relevant content provided. Core View of the Report The report anticipates that the Shanghai lead futures may experience wide - range fluctuations after a decline. Although the domestic supply and demand both increase, the low - level inventory continues to rise, causing the supply - demand situation to weaken marginally. Considering the rising cost - end support, the Shanghai lead is expected to show an interval - oscillation trend. Mid - term attention should be paid to the production dynamics of recycled lead, downstream demand, and domestic inventory changes [5]. Summary by Related Catalogs 1. Fundamental Changes Processing Fees In November 2025, China imported 110,000 tons of lead concentrates in physical volume, with a year - on - year increase of 15.8% and a month - on - month increase of 11.7%. The import volume was higher than the average level in recent years. The domestic lead concentrate market demand was high in winter, and the tight situation of domestic mines continued. The processing fees of domestic and foreign lead concentrates remained stable at a low level. In January, the domestic monthly processing fee was 200 - 400 yuan/ton, and the monthly ring - to - ring was flat; the imported monthly processing fee was - 160 - - 130 US dollars/dry ton, and the monthly ring - to - ring was flat. For spot processing fees, the domestic weekly processing fee for lead ore was 250 - 350 yuan/ton, and the weekly ring - to - ring was flat; the imported weekly processing fee was - 160 - - 130 US dollars/dry ton, and the weekly ring - to - ring was flat [2]. Supply In December 2025, the output of primary lead was 332,700 tons, a month - on - month increase of 1.56% and a year - on - year increase of 1.56%, and the monthly output was higher than expected; the output of recycled refined lead was 268,400 tons, a month - on - month decrease of 9.35% and a year - on - year increase of 0.83%. Last week, the operating rate of primary lead smelters in three provinces monitored by SMM was 67%, a week - on - week increase of 0.4%. For primary lead enterprises, there were both maintenance and resumption of production, and the supply increased mainly on a month - on - month basis. The operating rate of recycled lead in four provinces monitored by SMM was 50.4%, a week - on - week increase of 1.4%. The refined lead import window remained open, and the import profit margin narrowed slightly. The cost of waste batteries increased, and the profit of recycled lead was still acceptable, with only a slight narrowing of profit. The future growth of recycled lead production was limited but still had room for improvement [3]. Consumption Last week, the weekly comprehensive operating rate of lead - acid battery enterprises in five provinces monitored by SMM was 70.77%, a week - on - week increase of 4.18%. After the New Year's Day holiday, lead - acid battery enterprises gradually resumed production, and the weekly operating rate increased. In December, the inventory in the battery industry chain accumulated, and in November, the net export of lead - acid batteries decreased month - on - month. In January, orders decreased, and the production enthusiasm was lower than that in December. Orders from automotive battery and energy - storage battery enterprises were relatively stable, and medium - and large - sized enterprises' production was okay. The operating rates of medium - and large - sized enterprises ranged from 60% to 80%, and a few enterprises even considered early holidays before the Spring Festival. Due to changes in tariff policies, orders from some export - oriented enterprises were sluggish, and there were large differences in the operating rates of production enterprises. At the initial stage of implementing the new national standard for electric bicycles, consumers were more wait - and - see, and the production of electric bicycles declined [4]. Spot As of the week ending January 16, the domestic lead spot basis turned to a premium, and the lead spot basis was at a premium of 115 yuan last weekend. The LME lead spot remained in a deep discount state, with a discount of - 44.18 US dollars last weekend [4]. Inventory As of the week ending January 16, the LME lead weekly inventory decreased by 16,375 tons to 206,400 tons. The LME inventory had been falling continuously from a high level but was still at a high level in recent years; the weekly inventory of lead on the Shanghai Futures Exchange increased by 6,933 tons to 37,044 tons. As of January 15, the total social inventory of lead ingots in five regions monitored by SMM reached 27,400 tons, and the inventory continued to rise month - on - month but was at an absolute low level in the past four years [4]. 2. Market Outlook and Strategy The LME lead inventory has been falling continuously, but it is still at an absolute high level, and the spot remains in a deep discount state, indicating that the overseas lead supply - demand surplus situation continues. The import volume of lead ore increased month - on - month in November, slightly higher than the average level, but the increment was limited. Due to the seasonal off - season of domestic mines in winter, the domestic mine supply remains in a deficit state, and domestic processing fees are operating at a low level. For primary lead, there are both maintenance and resumption of production, and the operating rate has increased slightly; the cost of waste batteries has increased, the profit of recycled lead is still acceptable, and the profit has only narrowed slightly. The future growth of recycled lead production is limited but still has room for improvement. The Shanghai - London price ratio has decreased slightly, the domestic import window remains open, and the pressure of import inflow is relatively large. Overall, the domestic supply and demand both increase, but the low - level inventory continues to rise, and the supply - demand situation weakens marginally. Considering the rising cost - end support, the Shanghai lead is expected to show an interval - oscillation trend after a decline [5].