1. Report Industry Investment Rating - No information provided 2. Core Viewpoints - For LLDPE, cracking supply contracts and cost transmission is poor; for PP, supply is restricted, exports are favorable, and the risk - free window for futures and spot is opened [1] - Geopolitical issues remain unresolved, affecting oil - related logistics. Naphtha is expected to be strong, raising PE costs. There is an expected improvement in post - holiday demand for mulch films and the packaging film industry will gradually recover after the Lantern Festival. For PP, C3 is affected by supply disruptions from Saudi Arabia and Iran, with strong cost support. After the Lantern Festival, downstream demand is expected to improve [2] 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **LLDPE (L2605)**: The closing price yesterday was 8916, with a daily increase of 5.75%. The trading volume was 1319688, and the position change was 12786. The 05 - contract basis was - 516 (compared to - 281 the previous day), and the 05 - 09 contract spread was 235 (compared to 256 the previous day). Spot prices in North China, East China, and South China were 8400, 8500, and 8700 yuan/ton respectively, showing an increase from the previous day [1] - **PP (PP2605)**: The closing price yesterday was 9158, with a daily increase of 6.14%. The trading volume was 1514932, and the position change was 17954. The 05 - contract basis was - 388 (compared to - 128 the previous day), and the 05 - 09 contract spread was 513 (compared to 472 the previous day). Spot prices in North China, East China, and South China were 8750, 8770, and 8850 yuan/ton respectively, showing an increase from the previous day [1] 3.2 Spot News - For polyolefins, Guangdong Petrochemical's 40HD and Exxon's linear line 1 are shut down. PE operating rate has dropped below 80%, and the production of standard products has decreased. PP operating rate has slightly increased by 0.5% to around 70.5%. There are still many planned PDH overhauls, and PDH profit has reached a new low today. The basis continues to weaken, cost transmission is poor, and downstream terminals have not accepted order price adjustments. There is a risk - free delivery profit of about 200 - 300 yuan/ton, and middle - stream enterprises have reserved a large number of storage spaces [1] 3.3 Market Condition Analysis - **PE**: Geopolitical issues lead to shipping stagnation in the Strait of Hormuz, affecting oil - related logistics. Naphtha is expected to be strong, raising PE costs. There is an expected improvement in post - holiday demand for mulch films, and the packaging film industry will gradually recover after the Lantern Festival. On the supply side, BASF Zhanjiang has started mass production, and the number of planned overhauls and production cuts is expected to increase in March. The production of standard products has decreased, and inventory has accumulated significantly during the holiday. Attention should be paid to the persistence of geopolitical issues and the willingness to restock during the peak season [2] - **PP**: C3 is affected by supply disruptions from Saudi Arabia and Iran, with strong cost support. There are still many PDH overhauls. Before the 2605 contract, there is no new production capacity. The game between existing supply and demand intensifies. After the Lantern Festival, downstream demand is expected to improve. PDH profit remains at a low level, and many PDH plants in South China have not resumed operation. Attention should be paid to the marginal changes of cracking and PDH plants [2] 3.4 Trend Intensity - LLDPE trend intensity is 1; PP trend intensity is 1 [4]