Group 1: Company Strategy and Focus - The company will focus on the production and sales of electrical cables and precision processing of aircraft components over the next 3-5 years, balancing traditional cable business stability with military industry growth [3] - The long-term growth potential is dependent on technological breakthroughs, market expansion, and supply chain integration across three main business areas [3] Group 2: Financial Performance and Shareholder Returns - For the fiscal year 2025, the company plans to distribute a cash dividend of 1 RMB per 10 shares and increase capital stock by 4 shares for every 10 shares held [5] - The company reported significant growth in revenue, net profit, and cash flow for 2025, although the overall gross margin remains low [6] Group 3: Raw Material Impact and Cost Management - The main raw materials for the company's products are copper and aluminum, and the company uses futures hedging to mitigate the impact of price fluctuations on production costs [4] Group 4: Investor Engagement and Communication - The company held an online earnings briefing on March 31, 2026, to address investor questions regarding valuation, profitability, and future strategies [2]

1. Report Industry Investment Rating - Not mentioned in the provided content 2. Core View of the Report - The ongoing geopolitical conflict in the Middle East has led to concerns about the supply of olefin raw materials such as naphtha and propane. The supply - side contraction continues to support the rise in olefin prices. For propylene, the supply is tightening due to the expected decline in PDH and refinery cracking unit operations. Although the demand side is mainly for low - price restocking, there are also cases of production cut due to high costs. In the short term, the supply - demand situation of propylene remains tight, and the price support exists as long as the Strait of Hormuz is not open [2]. 3. Summary by Relevant Catalogs 3.1 Market News and Important Data - **Propylene**: The closing price of the propylene main contract is 8,944 yuan/ton (-56), the spot price in East China is 9,275 yuan/ton (+300), and in North China is 8,770 yuan/ton (+455). The basis in East China is 331 yuan/ton (+356), and in Shandong is -174 yuan/ton (+511). The propylene operating rate is 71% (-1%), the difference between propylene CFR in China and naphtha CFR in Japan is 147 US dollars/ton (-22), the difference between propylene CFR and 1.2 propane CFR is -106 US dollars/ton (+14), the import profit is -1,656 yuan/ton (-206), and the in - plant inventory is 44,560 tons (-1,800) [1]. - **Propylene downstream**: The operating rate of PP powder is 22% (-5.28%), and the production profit is 30 yuan/ton (-105); the operating rate of propylene oxide is 74% (-1%), and the production profit is 2,288 yuan/ton (+454); the operating rate of n - butanol is 81% (-1%), and the production profit is 1,311 yuan/ton (+143); the operating rate of octanol is 89% (+1%), and the production profit is 678 yuan/ton (-277); the operating rate of acrylic acid is 77% (+4%), and the production profit is 4,265 yuan/ton (-113); the operating rate of acrylonitrile is 76% (+0%), and the production profit is 332 yuan/ton (-158); the operating rate of phenol - acetone is 87% (-1%), and the production profit is 86 yuan/ton (-115) [1]. 3.2 Market Analysis - The geopolitical conflict in the Middle East has intensified, increasing the expectation of the closure of the Strait of Hormuz. The supply problem of olefin raw materials has not been alleviated, and the decline in the operating rate of Asian refineries and cracking units supports the rise in olefin prices. For propylene, the supply of raw material propane has tightened again, increasing the expectation of PDH unit maintenance. The demand side is mainly for low - price restocking, but there are also production cut cases due to high costs. In the short term, the supply - demand of propylene is tight, and the price support exists [2]. 3.3 Strategy - **Unilateral**: Cautiously go long on hedging at low prices - **Inter - period**: None - **Inter - variety**: None [3] 3.4 Figures and Charts - **Propylene basis structure**: Includes figures such as the closing price of the propylene main contract, East China basis, Shandong basis, and futures contract spreads [6][11][14]. - **Propylene production profit and operating rate**: Covers figures related to the difference between propylene CFR and naphtha CFR, propylene capacity utilization rate, PDH production profit and capacity utilization rate, MTO production profit, and methanol - to - olefin capacity utilization rate [18][23][34]. - **Propylene downstream profit and operating rate**: Involves figures of production profit and operating rate of PP powder, propylene oxide, n - butanol, octanol, acrylic acid, acrylonitrile, and phenol - acetone [37][39][42]. - **Propylene inventory**: Includes figures of propylene in - plant inventory and PP powder in - plant inventory [62].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints - The Middle East situation remains tense, and the support for aromatics still exists. The supply issues of crude oil and naphtha have not been alleviated. For pure benzene, the port inventory has started to meet the de - stocking expectation, and the domestic production is at a low level. For styrene, the port inventory has slightly increased at the beginning of the week and has not met the de - stocking expectation [1][2][3]. - The recommended strategy is to cautiously go long for hedging on BZ2605 and EB2605 on dips [4]. 3. Summary by Relevant Catalogs 3.1 Pure Benzene and EB's Basis Structure, Inter - period Spreads - Figures include pure benzene's main basis and main futures contract price, main contract basis, spot - M2 paper cargo spread, and the spread between the first - and third - month contracts. Also, styrene's main basis and main contract, EB main contract basis, and the spread between the first - and third - month contracts are presented [8][14][16][17] 3.2 Pure Benzene and Styrene Production Profits, Domestic and Foreign Spreads - Figures cover naphtha processing fee, the difference between pure benzene FOB Korea and naphtha CFR Japan, styrene non - integrated plant production profit, and the price differences of pure benzene and styrene in different regions such as FOB US Gulf, FOB Rotterdam, and CFR China, as well as their import profits [23][26][34] 3.3 Pure Benzene and Styrene Inventory, Operating Rates - Figures show pure benzene's East China port inventory and operating rate, and styrene's East China port inventory, commercial inventory, factory inventory, and operating rate [42][45][47] 3.4 Styrene Downstream Operating Rates and Production Profits - Figures display the operating rates and production profits of EPS, PS, and ABS [54][59][57] 3.5 Pure Benzene Downstream Operating Rates and Production Profits - Figures present the operating rates and production profits of caprolactam, phenol - acetone, aniline, adipic acid, as well as the production profits of PA6, nylon filament, bisphenol A, PC, epoxy resin E - 51, pure MDI, and polymerized MDI [65][69][81]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Geopolitical uncertainties persist, and the supply side continues to provide support for the polyolefin market. The ongoing tensions in the Middle East have led to supply issues for olefin raw materials, causing the market to rebound. For PE, the supply is tightening due to raw material shortages and upstream maintenance, while demand is gradually releasing but with cautious buying. For PP, the supply support remains strong, and although downstream purchasing is weak, the export window has opened, and prices are strongly supported in the short term [3][4] 3. Summary According to the Directory I. Polyolefin Basis and Inter - period Structure - The L main contract closed at 8767 yuan/ton (+52), the PP main contract closed at 9120 yuan/ton (+145). The LL North China spot price was 8500 yuan/ton (+200), the LL East China spot price was 8060 yuan/ton (-540), and the PP East China spot price was 9050 yuan/ton (+150). The LL North China basis was -267 yuan/ton (+148), the LL East China basis was -707 yuan/ton (-592), and the PP East China basis was -70 yuan/ton (+5) [1] II. Production Profit and Operating Rate - PE operating rate was 76.2% (-3.8%), PP operating rate was 70.0% (-0.5%). PE oil - based production profit was -734.1 yuan/ton (-191.4), PP oil - based production profit was -674.1 yuan/ton (-191.4), and PDH - based PP production profit was -3207.4 yuan/ton (-11.8) [1] III. Polyolefin Non - standard Price Difference - Not elaborated in the given content IV. Polyolefin Import and Export Profits - LL import profit was -817.2 yuan/ton (-361.0), PP import profit was -1265.0 yuan/ton (-145.9), and PP export profit was 310.5 US dollars/ton (+189.9) [1] V. Polyolefin Downstream Operating Rate and Downstream Profits - PE downstream agricultural film operating rate was 38.9% (+3.4%), PE downstream packaging film operating rate was 47.2% (+1.7%), PP downstream plastic weaving operating rate was 41.1% (+0.9%), and PP downstream BOPP film operating rate was 63.4% (+1.5%) [2] VI. Polyolefin Inventory - Not elaborated in the given content 4. Strategies - Unilateral: Cautiously go long on LLDPE and PP for hedging; - Inter - period: None; - Cross - variety: Cautiously shrink the spread of LL05 - PP05 when it is high [5]

Report Industry Investment Rating No relevant information provided. Core Viewpoints - The market focus is on the Iran situation, with rising crude oil prices due to the tense situation. The PXN has been significantly compressed, and the supply interruption in the Middle East has continuously pushed up the naphtha price. However, PX's upward momentum is limited by the poor downstream polyester demand. The impact of the Iran situation is gradually expanding, and the traffic volume in the Strait of Hormuz remains low. Under the concern of supply interruption, the PX spot shows a Back structure, and the floating price is relatively strong. Recently, affected by the concern about the stability of raw material supply, the PX load has decreased, and the de - stocking amplitude has increased. If the raw material supply continues to be affected, the impact on refineries in other countries will also continue to expand [1]. - For TA, the PTA spot basis is -75 yuan/ton (with a month - on - month change of -2 yuan/ton), the PTA spot processing fee is 337 yuan/ton (with a month - on - month change of +106 yuan/ton), and the processing fee of the main contract on the disk is 326 yuan/ton (with a month - on - month change of +7 yuan/ton). The weaving load and polyester load are recovering, and the PTA load has decreased but the impact is smaller than that of PX. It continued to accumulate inventory in March, but the PTA trend is relatively strong under cost support, and the processing fee is compressed. Currently, the supply is relatively abundant, and the spot basis is running weakly. The market is gambling on which has a greater impact, supply reduction or demand suppression. In the medium and long term, as the cycle of concentrated capacity release ends, the PTA processing fee is expected to gradually improve, and the long - term expectation is still good [2]. - In terms of demand, the polyester operating rate is 87.6% (with a month - on - month increase of 0.9%). The polyester and weaving loads are stable, but the downstream prices are sluggish in following the price increase, and the acceptance of high - priced raw materials is not high. There are more voices of production reduction. Recently, the sales of filament have been continuously sluggish, and the inventory of filament and staple fiber has rapidly accumulated. The polyester load is lower than that of last year. If the downstream continues not to replenish inventory, the load may decrease [2]. - For PF, the spot production profit is -54 yuan/ton (with a month - on - month increase of 213 yuan/ton). The downstream has a strong wait - and - see attitude, moderately replenishes at the phased low level, and the high - level transactions are few. The staple fiber factory equipment has been started, and the load has increased. Due to the weak sales, the factory inventory has increased, and the processing difference fluctuates greatly. Attention should be paid to the recovery of traffic in the Strait of Hormuz [3]. - For PR, the spot processing fee of bottle chips is 1108 yuan/ton (with a month - on - month change of +116 yuan/ton). Affected by the situation in the Middle East and the Strait of Hormuz, the upstream raw materials have experienced production reduction and load reduction phenomena, the prices of polyester raw materials have risen significantly, and the prices of polyester bottle chip factories mostly follow the increase. The operating load of polyester bottle chip equipment is stable and slightly increased, and the overall supply has increased slightly. However, the mainstream factories have cut part of the contract volume, and the circulating supply is still tight. The inventory of bottle chip factories remains at a low level, and the processing fee has retreated but is still relatively high [3]. - Strategy: For the unilateral strategy, it is advisable to cautiously go long on PX/PTA/PF/PR for hedging. Before seeing actual troop withdrawal or negotiation, the shipping in the Strait of Hormuz is still difficult to be smooth, and the cost support and supply concerns still exist, but there is a negative feedback expectation on the demand side. Currently, the trading is difficult, and it is not advisable to chase up or kill down. For the cross - variety strategy, there is no relevant suggestion. For the cross - period strategy, the supply affects the PX 5 - 9 positive spread, and attention should be paid to the traffic situation in the Strait of Hormuz [4]. Summary by Directory Price and Basis - Figures include TA main contract, basis, and inter - period spread trends; PX main contract trend, basis, and inter - period spread; PTA East China spot basis; and short - fiber 1.56D*38mm semi - bright natural white basis [8][9][14] Upstream Profits and Spreads - Figures cover PX processing fee PXN (PX China CFR - Naphtha Japan CFR), PTA spot processing fee, South Korean xylene isomerization profit, and South Korean STDP selective disproportionation profit [16][19] International Spreads and Import - Export Profits - Figures involve toluene US - Asia spread (FOB US Gulf - FOB South Korea), toluene South Korea FOB - Japan Naphtha CFR, and PTA export profit [24][26] Upstream PX and PTA Start - up - Figures show China's PTA load, South Korea's PTA load, Taiwan's PTA load, China's PX load, and Asia's PX load [27][30][32] Social Inventory and Warehouse Receipts - Figures include PTA weekly social inventory, PX monthly social inventory, PTA total warehouse receipts + forecast volume, PTA warehouse warehouse receipt inventory, PX warehouse receipt inventory, and PF warehouse receipt inventory [37][39][40] Downstream Polyester Load - Figures cover filament sales, staple fiber sales, polyester load, direct - spinning filament load, polyester staple fiber load, polyester bottle chip load, filament DTY factory inventory days, filament FDY factory inventory days, filament POY factory inventory days, Jiangsu and Zhejiang loom operating rate, Jiangsu and Zhejiang texturing machine operating rate, and Jiangsu and Zhejiang printing and dyeing operating rate [47][49][57] PF Detailed Data - Figures involve polyester staple fiber load, polyester staple fiber factory equity inventory days, 1.4D physical inventory, 1.4D equity inventory, recycled cotton - type staple fiber load, raw - recycled spread (1.4D polyester staple - 1.4D imitation large - chemical fiber), pure polyester yarn operating rate, pure polyester yarn production profit, polyester - cotton yarn operating rate, polyester - cotton yarn processing fee, pure polyester yarn factory inventory available days, and polyester - cotton yarn factory inventory available days [69][78][81] PR Fundamental Detailed Data - Figures include polyester bottle chip load, bottle chip factory bottle chip inventory days, bottle chip spot processing fee, bottle chip export processing fee, bottle chip export profit, East China water bottle chip - recycled 3A - grade white bottle chip, bottle chip next - month spread (next month - base month), and bottle chip next - next - month spread (next - next month - base month) [89][93][95]

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints - In March, the tire sales season arrives. With rising crude oil prices, downstream tire dealers are actively stocking up. However, there are concerns that the good sales in March may over - consume future demand, leading to a possible decline in April sales. [1][9] - The Middle - East geopolitical conflict may initially impede tire shipments, but if customers accept price increases, shipments may gradually resume. The conflict is expected to last until around mid - to late April, and there is a high probability of reduced production rates due to short - term decreased demand and rising raw material prices. [2][14] - Facing the continuous rise in synthetic rubber prices, tire companies are considering measures such as raising tire prices, adjusting production formulas, and reducing production if losses occur. [2][15] 3. Summary by Directory 3.1 Research Enterprise Profiles - Tire manufacturer A: A global top 50 tire company with an annual production capacity of 8 million sets of all - steel radial tires and 30 million semi - steel tires. The current semi - steel and all - steel tire production rates are around 85%. There are expectations of production cuts from late March to early April. [4] - Tire manufacturer B: Specializes in high - performance all - steel and semi - steel radial tires and rubber conveyors. The annual production capacity of all - steel radial tires is 1.8 million sets, and that of semi - steel radial tires is 12 million sets. After the Spring Festival, production has been running well, with both production lines almost at full capacity. [5] - Tire manufacturer C: Uses advanced production technology to produce all - steel radial tires, with a production capacity of 2.4 million sets. After the Spring Festival, production quickly recovered to full capacity. In 2025, tire production and sales increased by about 10% compared to 2024. [5] - Tire manufacturer D: Has an annual all - steel tire production capacity of 2.2 million sets and a semi - steel tire production capacity of 12 million sets. Currently, the all - steel tire production is at full capacity, with smooth shipments and a 20 - day product inventory. The production capacity is expected to increase from 2.2 million sets to 2.6 - 2.8 million sets. [6] - Tire manufacturer E: Has two all - steel tire factories in China and one all - steel and one semi - steel tire factory in Vietnam. The total all - steel tire production capacity is about 11 million sets per year, planned to increase to 12 million sets. The semi - steel tire production capacity in the Vietnam factory is about 4 million sets per day. [6] - Tire dealer A: Specializes in all - steel tire wholesale, with a peak monthly sales volume of about 10,000 tires. It currently has an inventory of six to seven thousand tires. This month, shipments are fast, but next month, shipment pressure is expected to be high. [7] - Qingdao Bonded Area Warehouse B: Has a warehouse area of over 100,000 square meters, mainly storing mixed rubber, plastics, pulp, and agricultural products. The normal rubber inventory is about 100,000 tons. There are delivery warehouses for No. 20 rubber NR and synthetic BR. [7] - Qingdao Bonded Area Warehouse C: The warehouse park covers an area of 175,000 square meters with a total storage capacity of 240,000 tons. It has multiple functions including bonded, general trade, and futures delivery. The inventory includes various types of rubber. [8] 3.2 Current Production and Sales of Tire Companies - In March, due to rising crude oil prices, downstream tire dealers are actively stocking up. Except for shipments to the Middle - East, tire companies have had good sales since March. However, there are concerns about over - consuming future demand, and sales may decline in April. Currently, most tire companies have high production rates, over 80%, and some are at full capacity, with plans to further increase production this year. [1][9] 3.3 Current Spot Inventory of Rubber and Tires - Tire companies' rubber inventory levels vary, with some participating in futures hedging and some not. Synthetic rubber suppliers have defaulted due to rapid price increases. Tire companies' product inventory is lower than last year. In the first half of March, downstream purchases were concentrated, and tire manufacturers accelerated shipments. Qingdao Port's rubber inventory is unlikely to decrease significantly in March. Even if there is a decrease, it will be short - term. The warehouse is almost full, and while concentrated pick - ups by tire factories may lead to inventory reduction, the expected incoming goods are still substantial. Inventory reduction may occur in the second quarter. [2][12] 3.4 Demand and Consumption of Tires by New - Energy Vehicles - The proportion of natural rubber used in new - energy vehicle tires increases. For semi - steel tires of pure - electric new - energy vehicles, the use of natural rubber increases by 6% - 7%, and for all - steel tires, it increases by 1% - 3%. New - energy vehicle tires wear 20% - 30% faster than fuel - powered vehicle tires, and the proportion of semi - steel tires is increasing. The unit price of new - energy vehicle tires is more than 15% higher than that of fuel - powered vehicle tires. New - energy commercial vehicles have great growth potential, mainly for short - distance transportation. [13] 3.5 Impact of the Middle - East Situation on Tire Sales in the Middle - East - If the Middle - East geopolitical conflict continues, tire shipments will initially be blocked. If customers accept price increases, shipments will gradually resume. The conflict is expected to last until around mid - to late April. In the short term, tire demand in the Middle - East will decrease, and there is a high probability of reduced production rates due to rising raw material prices. [2][14] 3.6 Countermeasures of Tire Companies Against Rising Raw Material Prices - Tire companies are considering the following countermeasures: passing on costs to downstream by raising tire prices, adjusting the tire production formula to reduce the proportion of expensive raw materials, and reducing production and production rates if losses occur. [2][15] 3.7 Industry Structure and Market Characteristics - The tire industry in China has a low concentration but is in the process of accelerating concentration. It shows the characteristics of a "large industry with small enterprises," with a competitive market. The top 10 tire companies account for less than half of the market share. Head - tier companies have a complete product line, scale effects, and are building overseas factories, while small and medium - sized companies face problems such as product homogenization, price competition, and high environmental and production costs. [16]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The intensification of the conflict in the Middle East still provides support for aromatics. For pure benzene, the port inventory has started to decline from a high level, but there is still some pressure on short - term arrivals. The supply in Asia and domestic refineries is expected to decline. The downstream开工率 has reached the peak and started to decline. For styrene, the port inventory has not entered the destocking cycle. There are maintenance plans for some devices, and the downstream开工率 shows a divergence [1][2][3] - The strategy suggests cautious long - hedging for BZ2604 and EB2604 at low prices [4] Summary by Directory 1. Pure Benzene and EB Basis Structure, Inter - period Spread - Relevant figures include the relationship between pure benzene's main contract basis and futures price, pure benzene's main contract basis, pure benzene's spot - M2 paper - cargo spread, pure benzene's continuous first - contract to continuous third - contract spread, styrene's main contract basis and futures contract, EB main contract basis, and styrene's continuous first - contract to continuous third - contract spread [8][15][16] 2. Pure Benzene and Styrene Production Profits, Domestic and Foreign Spreads - Figures cover naphtha processing fees, the spread between pure benzene FOB South Korea and naphtha CFR Japan, non - integrated styrene production profits, the spread between pure benzene FOB US Gulf and FOB South Korea, the spread between pure benzene FOB US Gulf and CFR China, the spread between pure benzene FOB Rotterdam and CFR China, pure benzene import profits, styrene import profits, the spread between styrene FOB US Gulf and CFR China, and the spread between styrene FOB Rotterdam and CFR China [24][26][30] 3. Pure Benzene and Styrene Inventory, Operating Rates - Figures show pure benzene's East China port inventory, pure benzene's operating rate, styrene's East China port inventory, styrene's operating rate, styrene's East China commercial inventory, and styrene's factory inventory [41][44][46] 4. Styrene Downstream Operating Rates and Production Profits - Figures include EPS operating rate and production profit, PS operating rate and production profit, ABS operating rate and production profit [54][56][59] 5. Pure Benzene Downstream Operating Rates and Production Profits - Figures cover caprolactam operating rate, phenol - ketone operating rate, aniline operating rate, adipic acid operating rate, caprolactam production profit, phenol - ketone production profit, aniline production profit, adipic acid production profit, PA6 regular spinning bright production profit, nylon filament production profit, bisphenol A production profit, PC production profit, epoxy resin E - 51 production profit, pure MDI production profit, and polymer MDI production profit [66][70][78]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The conflict in the Middle East is still intense, with low traffic in the Strait of Hormuz, and the market anticipates a recovery in traffic. For pure benzene, port inventories are starting to decline from a high level, and there are expectations of a decline in supply in South Korea. In the domestic market, refinery production cuts have led to a decline in pure benzene production. For styrene, port inventories have not continued to enter the de - stocking cycle, and downstream demand shows mixed performance [2][3] 3. Summary According to Relevant Catalogs 3.1 Pure Benzene and EB's Basis Structure and Inter - period Spreads - Figures include the basis of pure benzene and styrene main contracts, the spread between pure benzene spot and M2 paper goods, and the spread between the first and third contracts of pure benzene and styrene [8][15][17] 3.2 Production Profits and Internal - External Spreads of Pure Benzene and Styrene - Figures cover naphtha processing fees, the spread between FOB South Korea pure benzene and CFR Japan naphtha, non - integrated styrene production profits, and various spreads and import profits of pure benzene and styrene [24][25][35] 3.3 Inventories and Operating Rates of Pure Benzene and Styrene - Figures show the inventory of pure benzene in East China ports, the operating rate of pure benzene, the inventory of styrene in East China ports, the operating rate of styrene, and the commercial and factory inventories of styrene [42][45][47] 3.4 Operating Rates and Production Profits of Styrene Downstream - Figures present the operating rates and production profits of EPS, PS, and ABS [55][57][60] 3.5 Operating Rates and Production Profits of Pure Benzene Downstream - Figures display the operating rates and production profits of caprolactam, phenol - ketone, aniline, adipic acid, and other downstream products [66][68][77]

Group 1: Report Industry Investment Rating - Not provided Group 2: Core Viewpoints of the Report - The copper price maintains a volatile pattern with downstream procurement being cautious. It is recommended to conduct buy-hedging on dips between 99,200 yuan/ton and 101,000 yuan/ton. If the price falls below 99,200 yuan/ton, increase the hedging intensity. Arbitrage should be postponed, and put options should be sold [1][8] Group 3: Summary of Each Section According to the Directory Market News and Important Data Futures Quotes - On March 16, 2026, the main Shanghai copper contract opened at 100,520 yuan/ton and closed at 99,720 yuan/ton, a -0.59% change from the previous trading day's close. In the overnight session, it opened at 100,020 yuan/ton and closed at 100,190 yuan/ton, a 0.58% increase from the afternoon close [1] Spot Situation - According to SMM, yesterday, the spot premium of SMM1 electrolytic copper to the current 2603 contract was 20 - 200 yuan/ton, with an average of 110 yuan/ton. As the Shanghai copper contract changed, holders shifted to quoting for the 2604 contract. Despite a slight decline in copper prices, downstream procurement remained cautious. High inventory and increased import expectations are expected to continue to pressure the spot premium [2] Important Information Summary - Tariffs: China and the US held economic and trade consultations in Paris, France, and agreed to study the establishment of a cooperation mechanism to promote bilateral trade and investment. - Geopolitics: US President Trump mentioned military actions against Iran's oil export hub and called on some countries to assist in ensuring the safety of the Strait of Hormuz, but Germany refused. Trump also called on the Fed to cut interest rates [3] Mining End - Cygnus Metals raised 25 million Australian dollars through a share placement for its Chibougamau copper-gold project in Canada. The funds will be used to expand resources, explore potential areas, complete pre - project work, and conduct technical research [4] Smelting and Import - Workers at Glencore's Townsville copper refinery in Australia went on a 4 - hour strike due to disputes over wages and working conditions. The refinery has an annual production capacity of up to 300,000 tons of 99.995% pure copper cathode [5] Consumption - The US Department of Energy plans to provide up to $500 million to support the expansion of domestic critical mineral processing, battery material manufacturing, and recycling industries, targeting key minerals such as copper [6] Inventory and Warehouse Receipts - LME warehouse receipts decreased by 525 tons to 311,600 tons. SHFE warehouse receipts increased by 7,935 tons to 322,998 tons. On March 16, the domestic electrolytic copper spot inventory was 547,300 tons, a decrease of 26,600 tons from the previous week [7] Strategy - Overall, the TC at the mining end has dropped to -$60/ton, intensifying raw material shortages. The refined copper import window has opened. The price difference between scrap and refined copper has narrowed, suppressing the economy of scrap copper, but the demand for taxed raw materials has increased. The operating rate of copper processing has generally recovered, and orders for refined copper rods have doubled. Terminal power and new energy orders provide strong support, while the construction sector remains weak. It is recommended to conduct buy - hedging on dips between 99,200 yuan/ton and 101,000 yuan/ton, postpone arbitrage, and sell put options [8] Data Tables and Figures - The report includes various figures and tables showing data such as TC prices, copper premium and discount quotes, price differences between scrap and refined copper, import profits and losses, and inventory data [9][18][24]

1. Report Industry Investment Rating - No relevant content provided 2. Core Views of the Report - In 2026, the U.S. economy is likely to peak in Q1, and there is a high probability of an economic and financial crisis in summer. The negative impact of anti - globalization on the global economy will gradually emerge. China's economic growth may slow slightly to around 4.5%. [71][75] - For methanol in 2026, the lower first and second supports are 1900 and 2000, and the upper first and second resistances are 2500 and 2600. It's recommended to short at high levels against high inventory from Q4 2025 to early Q1 2026, and then go long after observing overseas device disruptions and port inventory inflection points. [5][180] - For urea in 2026, the price is expected to fluctuate above the coal - gasification process cost line, with obvious seasonal demand. The price trend is likely to be high in the first half and low in the second half. The lower first and second supports are 1500 and 1550, and the upper first and second resistances are 1850 and 1900. It's recommended to go long in the peak season and short in the off - season. [5][180] 3. Summary by Relevant Catalogs 3.1 Coal Chemical Industry Chain Analysis - **Methanol Industry Chain**: Modern coal chemical industry uses coal as raw material, and methanol is a key intermediate in the chain. Its upstream includes coal, coke oven gas and natural gas, and downstream includes traditional products like formaldehyde and emerging products like coal/methanol - to - olefins. [17] - **Urea Industry Chain**: Urea is produced from coal, and its co - product is methanol. It is used in agriculture and industry, and is highly concerned due to its impact on people's livelihood. [22] 3.2 Coal Chemical Futures and Options Contracts Introduction - **Methanol Futures and Options**: Methanol futures are traded on the Zhengzhou Commodity Exchange. The trading unit is 10 tons per lot, with a minimum price change of 1 yuan/ton. The options have call and put types, and the trading unit is 1 lot of methanol futures. [24][33] - **Urea Futures and Options**: Urea futures are also traded on the Zhengzhou Commodity Exchange. The trading unit is 20 tons per lot, with a minimum price change of 1 yuan/ton. The options have similar contract specifications as methanol options. [39][44] 3.3 Market Review - **Historical Market Review**: Chinese methanol futures have gone through four stages since before 2011, with significant fluctuations due to factors such as capacity expansion, policy changes, and the epidemic. Urea futures have experienced three stages since 2019, affected by factors like supply - demand, policies, and overseas events. [52][55] - **2025 Market Review**: In 2025, methanol prices mostly oscillated between 2000 - 2700 yuan/ton, with a central price of 2400 yuan/ton. Urea prices mostly stayed between 1500 - 2000 yuan/ton, with a central price of 1750 yuan/ton. [4][59][61] - **Futures Trading Volume and Open Interest**: By the end of 2025, the cumulative trading volume of methanol was 23753255 lots, with an average monthly trading volume of 1979437 lots. For urea, the cumulative trading volume was 59755728 lots, with an average monthly trading volume of 4979644 lots. [69][70] 3.4 Macroeconomic Environment - **Global Economic Outlook in 2026**: The U.S. economy is likely to peak in Q1 2026, and there is a high risk of an economic and financial crisis in summer. Anti - globalization will negatively impact the global economy. [71] - **China's Economic Outlook in 2026**: China's economic growth may slow slightly to around 4.5%, affected by factors such as the weakening marginal effect of policies and the decline in real estate investment. [75] 3.5 Production, Supply, and Import - Export - **Production and Supply Analysis**: In 2025, China's methanol production was 10180 tons, a year - on - year increase of 9.9%. The planned new methanol production capacity was 770 tons. The global urea planned new capacity was 431 tons, and China's urea production was 7113 tons, a year - on - year increase of 7.9%. [76][85][86] - **Import - Export Analysis**: China is the largest consumer of methanol, with a high dependence on imports, especially from the Middle East. In 2025, China's urea exports increased significantly to 489.43 tons compared with 2024. [91][97] 3.6 Processing and Consumption Demand - **Downstream Consumption Demand**: In November - December 2025, the olefin plant operating rate first increased and then decreased, with some room for further increase. The traditional downstream sectors showed differentiation. Urea's agricultural demand is seasonal, and industrial demand is mediocre. [103][106] - **Output and Operating Rate of Downstream Industries**: Methanol's downstream consumption mainly includes methanol - to - olefins, etc. In 2025, the overall downstream operating rate of methanol was low. For urea, the compound fertilizer production has seasonal characteristics, and the production of melamine decreased slightly in 2025. [109][117] 3.7 Inventory Analysis - **Domestic Port Inventory**: By December 25, 2025, the domestic methanol port inventory was 141.25 tons, at a historically high level compared with the same period. The urea port inventory was 17.7 tons, which increased due to the issuance of export quotas. [124][131] - **Production Enterprise Inventory**: By December 25, 2025, the inventory of inland methanol enterprises increased, while the inventory of urea enterprises decreased. [132][134] 3.8 Cost and Profit Analysis - **Methanol Processing Cost and Profit**: In December 2025, the profit of coal - based methanol in the northwest was around - 170 yuan/ton, that of coke oven gas - based methanol was around 171 yuan/ton, and that of natural gas - based methanol was around - 326 yuan/ton. [140] - **Urea Processing Cost and Profit**: The production profit of fixed - bed urea was around - 227 yuan/ton, that of new coal - gasification urea was around 157 yuan/ton, and that of natural gas - based urea was around - 287 yuan/ton. [142] 3.9 Supply - Demand Balance Sheet Forecast and Analysis - **Supply - Demand Balance Sheet Forecast**: For methanol, the supply - demand gap is expected to be 220 tons in 2026. For urea, the supply - demand gap is expected to be 191 tons in 2026. [146][148] - **Analysis of 2025 - 2026 Supply - Demand Balance Sheet**: For methanol, the supply - demand contradiction still exists in 2026, and imports will be a key variable. For urea, the domestic supply is expected to remain loose, and the increase in export quotas will relieve the oversupply situation. [149] 3.10 Hedging Cases of Coal Chemical Enterprises - **Methanol Futures Hedging Case**: A medium - large formaldehyde factory made a futures buying - hedging strategy in June 2025 and not only compensated for the loss in the spot market but also made a profit. [150] - **Urea Futures Hedging Case**: A large urea trading enterprise made a futures selling - hedging strategy in December 2025 and achieved a full - hedging effect. [152][153] 3.11 Arbitrage Opportunities Outlook - **Cross - Variety Arbitrage Opportunities**: Methanol and urea have certain arbitrage opportunities due to differences in transportation, storage, and supply - demand at different times. Investors can conduct cross - variety arbitrage based on expectations and historical price differences. [155] - **Cross - Period Arbitrage Opportunities**: For methanol, it's recommended to conduct reverse arbitrage in the 01 - 05 contracts and pay attention to the 59 positive arbitrage opportunity in Q1 2026 if the inventory starts to decline. For urea, investors can conduct arbitrage based on the historical price difference range of the 01 - 05 contracts. [158][163] 3.12 Technical Analysis and Outlook of Futures Prices - **Seasonal Analysis**: Methanol prices tend to rise in January, August, and December, and fall in March and October. Urea prices tend to rise in February, March, and October, and fall in July and August. [165][168] - **Technical Analysis**: For methanol's 05 contract, the first resistance is 2280 - 2300, and the second is 2380 - 2400. For urea's 05 contract, the first resistance is 1780 - 1800, and the second is 1870 - 1900. [171][173] 3.13 Option Analysis and Strategy Suggestions - For methanol in 2026, it's recommended to focus on the double - selling option strategy. Buy call options when imports shrink and put options when imports recover and domestic demand is in the off - season. Consider the double - buying strategy when geopolitical conflicts intensify and energy prices fluctuate. [177] - For urea, buy call options in the peak season and put options in the off - season when there is no obvious adjustment in export policies. [177] 3.14 Conclusion and Operation Suggestions - Hold the previous 05 long positions in methanol and urea. For methanol in 2026, short at high levels against high inventory in the early stage and then go long after observing key factors. For urea, go long in the peak season and short in the off - season. [178][180] 3.15 Appendix - Related Stocks in the Coal Chemical Industry - Stocks such as China Coal Energy, Jizhong Energy, and Gansu Energy Chemical are listed, along with their stock codes, latest prices, and year - to - date price changes as of February 26, 2026. [182]