Report Industry Investment Rating - No relevant information provided Core Viewpoints of the Report - The repeated negotiations between the US and Iran have led to significant fluctuations in crude oil prices, causing polyolefins to follow suit. The overall profit of polyolefins has decreased significantly, and there are no new production projects before the 05 contract. The profit of BOPP in the demand side has recovered, and the order volume is better than the same period. Therefore, a positive spread trading opportunity may emerge between PP2605 and PP2609 [17]. - The next - month forecast shows that the reference oscillation range for polyethylene (L2605) is (6700 - 7000), and for polypropylene (PP2605) is (6600 - 6900) [17]. - The strategy recommendation is to go long on the spread between PP2605 - 2609 at low prices [18]. Summary by Relevant Catalogs 1. Monthly Assessment and Strategy Recommendation - **Valuation**: Repeated US - Iran negotiations have led to significant fluctuations in crude oil, and polyolefins have followed the oscillations [16]. - **Cost - end**: WTI crude oil rose 14.02%, Brent crude oil rose 14.43%, coal prices remained unchanged at 0.00%, methanol fell - 3.36%, ethylene rose 10.15%, propylene rose 11.04%, and propane rose 4.98%. In the context of weak supply and demand, the cost - end has a greater impact [16]. - **Supply - end**: PE capacity utilization was 87.03%, a month - on - month increase of 4.42%, a year - on - year decrease of - 1.81%, and a decrease of - 9.28% compared to the five - year average. PP capacity utilization was 74.90%, a month - on - month increase of 0.03%, a year - on - year decrease of - 5.82%, and a decrease of - 19.23% compared to the five - year average. There are no new capacity plans for the polyolefin 2605 contract [16]. - **Import and Export**: In December, domestic PE imports were 1.3299 million tons, a month - on - month increase of 25.21% and a year - on - year increase of 4.62%. PP imports were 205,800 tons, a month - on - month decrease of - 4.83% and a year - on - year decrease of - 4.83%. The export season has arrived. In December, PE exports were 92,100 tons, a month - on - month increase of 7.27% and a year - on - year increase of 58.30%. PP exports were 230,500 tons, a month - on - month increase of 2.89% and a year - on - year increase of 29.81% [16]. - **Demand - end**: The downstream开工 rate of PE was 33.73%, a month - on - month decrease of - 18.15% and a year - on - year increase of 59.86%. The downstream开工 rate of PP was 49.84%, a month - on - month decrease of - 5.25% and a year - on - year increase of 59.34%. It is the seasonal off - season, and the overall开工 has no highlights. However, the profit of BOPP is better than in previous years, and the order volume is also prominent, which may become an important marginal variable on the PP demand side [17]. - **Inventory**: PE production enterprise inventory was 379,700 tons, a month - on - month inventory reduction of - 3.97% and a year - on - year inventory reduction of - 30.25%; PE trader inventory was 23,200 tons, a month - on - month inventory reduction of - 20.62% and a year - on - year inventory reduction of - 8.83%; PP production enterprise inventory was 415,800 tons, a month - on - month inventory reduction of - 11.10% and a year - on - year inventory reduction of - 33.57%; PP trader inventory was 183,200 tons, a month - on - month inventory reduction of - 10.50% and a year - on - year inventory reduction of - 15.03%; PP port inventory was 63,700 tons, a month - on - month inventory reduction of - 10.41% and a year - on - year inventory reduction of - 11.89% [17]. 2. Futures and Spot Market - Multiple charts are provided to show the term structure, price, basis, spread, trading volume, open interest, and other information of LLDPE and PP contracts, as well as the spread between different varieties such as LL - PP, PP - 1.2PG, etc., and the import and export price differences and volumes of LLDPE and PP [34][47][63][65]. 3. Cost - end - The oil - based cost has rebounded slightly. Multiple charts show the prices of WTI crude oil, thermal coal, methanol, propane, etc., as well as the production margins and capacity utilization rates of PDH, MTBE, alkylation oil, etc. [79][81][83][84]. 4. Polyethylene Supply - end - The production raw material proportion and annual proportion of PE are presented. There are multiple planned PE production projects in 2026, with a total of 500,000 tons already put into production and 5.2 million tons yet to be put into production. The capacity utilization rate and maintenance loss volume of PE are also shown [125][127][132]. 5. Polyethylene Inventory & Import and Export - Charts show the total inventory, production enterprise inventory, two - oil inventory, trader inventory, import volume, and export volume of PE [140][141][144][149]. 6. Polyethylene Demand - end - The downstream demand proportion and terminal demand proportion of PE are presented. The CPI, downstream demand cumulative year - on - year, downstream total开工 rate, and inventory - related data of PE are also shown [156][158][160]. 7. Polypropylene Supply - end - The production raw material proportion and annual proportion of PP are presented. There are multiple planned PP production projects in 2026, with 0 tons already put into production and 4.37 million tons yet to be put into production. The capacity utilization rate and maintenance loss volume of PP are also shown [175][177][180]. 8. Polypropylene Inventory & Import and Export - Charts show the total inventory, two - oil inventory, trader inventory, port inventory, export volume, and export destination proportion of PP [194][195][200]. 9. Polypropylene Demand - end - The downstream demand proportion and terminal demand proportion of PP are presented. The downstream total开工 rate, order days, and inventory - related data of PP are also shown [206][208][210].