Report Information - Report Title: Pure Benzene - Styrene Risk Management Daily Report - Date: October 31, 2025 - Analyst: Dai Yifan (Investment Consulting License No.: Z0015428) [2] Price Forecast - Pure Benzene Price Range (Monthly): 5,200 - 5,800 yuan/ton [3] - Styrene Price Range (Monthly): 6,200 - 6,800 yuan/ton [3] - Styrene Current Volatility (20 - day rolling): 16.41% [3] - Styrene Current Volatility Historical Percentile (3 - year): 85.8% [3] Hedging Strategies Inventory Management - Strategy 1: Short styrene futures (EB2512) to lock in profits and make up for production costs, with a hedging ratio of 25% and an entry range of 6,550 - 6,600 yuan/ton [3] - Strategy 2: Sell call options (EB2512C6600) to collect premiums and reduce capital costs, with a hedging ratio of 50% and an entry range of 65 - 90 [3] Procurement Management - Strategy 1: Buy styrene futures (EB2512) to lock in procurement costs in advance, with a hedging ratio of 50% and an entry range of 6,350 - 6,400 yuan/ton [3] - Strategy 2: Sell put options (EB2512P6400) to collect premiums and reduce procurement costs, with a hedging ratio of 75% and an entry range of 70 - 90 [3] Core Contradictions Pure Benzene - Sanctions on some Chinese refineries by the US, UK, and EU have affected pure benzene production. After adjusting the supply forecast, pure benzene is expected to accumulate inventory in Q4 [4] - In October, pure benzene imports were low in the first half and are expected to increase in late - October to early - November, leading to port inventory accumulation [4] - High supply and weak demand (downstream production and maintenance co - exist, and the peak season may not be prosperous) will keep the inventory accumulation pattern unchanged, and pure benzene is expected to be weak [4] Styrene - 1.2 million tons of new capacity has been put into production, and supply will increase after stable operation [4] - Although the balance sheet shows de - stocking in Q4, high inventory and expected inventory accumulation in Q1 next year pose great de - stocking pressure [4] - With many important domestic and international meetings, there are both long and short factors for energy and chemical products. Pure benzene and styrene lack upward momentum and are sensitive to macro trends and crude oil prices [4] Bullish Factors - Five - department plan to improve the urban business environment [5] - Shutdowns of some styrene plants in Tianjin and Guangdong due to equipment problems [5] - US - China trade talks result in the cancellation or suspension of some sanctions [7][4] Bearish Factors - Slow de - stocking of styrene in Jiangsu ports as of October 27, 2025, with 19.3 tons of inventory [8] - Production cuts of downstream ABS and possible delay of new ABS plant operation [8] Basis and Spread Changes Basis Changes - Pure benzene basis in East China decreased significantly on October 31, 2025, compared with the previous day [9] - Styrene basis in East China also decreased on October 31, 2025, compared with the previous day [9] Spread Changes - Pure benzene and styrene paper - cargo spreads and other spreads showed various changes on October 31, 2025, compared with the previous day [10] Industry Chain Prices - Brent crude oil price remained at 64.03 dollars/barrel on October 31, 2025 [10] - Pure benzene and styrene prices in different markets and futures contracts had different changes on October 31, 2025, compared with the previous day and the previous week [10][11] - Profits in the pure benzene - styrene industry chain also showed different trends [11]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - The pure benzene market shows significant short - term de - stocking, but there is still a high pressure of inventory accumulation in the fourth quarter, and the price is expected to remain weakly volatile. The styrene market has short - term supply tightening, but inventory accumulation restricts its upward momentum, and the short - term trend mainly follows the movement of crude oil [2][3] Group 3: Summary by Related Catalogs Pure Benzene - **Supply**: This week, the overall supply remained relatively stable. Although some devices had planned and unplanned shutdowns, some hydro - benzene devices restarted. Looking ahead, two factories in East China postponed their device maintenance, two small long - shut - down devices in Shandong are planned to resume operation in mid - October, and there will be European shipments arriving from November to December, so the supply is expected to increase in the fourth quarter [2][7] - **Demand**: The downstream start - up situation was mixed. The start - up rates of styrene and adipic acid declined, while some devices such as caprolactam, aniline, and phenol restarted and increased their loads, causing the overall converted demand to rebound slightly compared to the previous period. However, the terminal consumption has not shown signs of a traditional peak - season recovery, and the weak industrial chain profit has limited the boost [2] - **Inventory**: The pure benzene inventory at East China ports decreased to 10.7 tons, a de - stocking of 2.7 tons compared to the previous week, with a decline rate of 20.1%. In the short term, the de - stocking provides certain support to the market, but in the context of supply accumulation and insufficient demand improvement in the fourth quarter, the pattern of inventory accumulation is difficult to reverse [2] - **Price**: The price generally fluctuated with crude oil. Due to the short - term de - stocking support and the low valuation, the downward space is limited, but the supply increase and weak demand in the fourth quarter will keep the price weakly volatile [2] - **Profit**: The profit of downstream industries weakened. The overall demand of downstream industries was weak, and although there was some improvement during the traditional peak season, the boost was limited. At the same time, the upstream pure benzene price remained firm, increasing the cost pressure on downstream enterprises and further compressing the overall gross profit margin [15] Styrene - **Supply**: Zhejiang Petrochemical's two 600,000 - ton devices stopped due to malfunctions and are expected to resume operation by early October, causing the overall supply in September to continue to tighten. However, with the gradual commissioning of new devices of Jilin Petrochemical and Guangxi Petrochemical and the return of maintenance devices, the supply will increase month - by - month in the fourth quarter [3] - **Demand**: The performance of the demand side was differentiated. Among the 3S sectors, the start - up rate of EPS decreased to 55.2%, a decline of 6.5 percentage points compared to the previous week; ABS remained at 70%, a slight increase of 0.2 percentage points; PS dropped to 59.1%, a decline of 2.1 percentage points. The overall downstream demand is at a high level within the year but lacks the power for further expansion [3] - **Inventory**: The port inventory increased to 18.7 tons, an increase of 2.8 tons compared to the previous week, with an increase rate of 17.3%. It is expected that the inventory will continue to accumulate in October [3][46] - **Production**: This week, the weekly production of styrene was 34.6 tons, a slight decrease of 0.1 tons compared to the previous week. The capacity utilization rate was 73.2%, a slight decrease of 0.2 percentage points [3] - **Price**: Both pure benzene and styrene are at historical lows. The valuation advantage limits the downward space to a certain extent, but the high inventory and the expectation of supply increase suppress the upward momentum, and the short - term trend mainly follows the movement of crude oil [3] - **Profit**: The styrene - pure benzene price difference continued to weaken, and the processing profit was continuously compressed [33] International Arbitrage - The arbitrage window is closed [5]