Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - For LLDPE, supply contraction continues with structural differentiation. For PP, there will be more cracking and PDH maintenance in April, providing strong supply support [1]. - Geopolitical tensions are escalating, affecting the shipping in the Strait of Hormuz and causing raw materials like naphtha to be strong, which raises the cost of PE. The post - holiday demand for mulch film is in line with the season, and the packaging film production has recovered, but cost transmission takes time. Supply - side factors include the mass production of BASF Zhanjiang, more maintenance and production cuts in April, a decline in standard product production, and inventory reduction. For PP, C3 is affected by supply disruptions from Saudi Arabia and Iran, with strong cost support and high PDH maintenance. There is no new production before the 2605 contract, intensifying the game between existing supply and demand. Downstream demand has improved, but PDH profit remains low, and attention should be paid to the marginal changes of cracking and PDH devices [2]. 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Futures Data**: For L2605, the closing price was 8614, with a daily decline of 2.16%, trading volume of 1203002, and a decrease in positions of 24962. For PP2605, the closing price was 9103, with a daily decline of 1.79%, trading volume of 1243426, and a decrease in positions of 18026. The 05 - contract basis for L2605 was - 164 (previous day: - 204), and for PP2605 was - 103 (previous day: - 119). The 05 - 09 contract spread for L2605 was 149 (previous day: 120), and for PP2605 was 366 (previous day: 338) [1]. - **Spot Price**: In the North, the LLDPE spot price was 8450 yuan/ton (previous day: 8600), and PP was 9000 yuan/ton (previous day: 9100). In the East, LLDPE was 8600 yuan/ton (previous day: 8850), and PP was 9000 yuan/ton (previous day: 9150). In the South, LLDPE was 8800 yuan/ton (previous day: 8950), and PP was 9400 yuan/ton (previous day: 9430) [1]. 3.2 Spot News - The plastic production rate remained at 74%. The PP production rate dropped to 66%, and with planned maintenance at Lihezhixin, Quanzhou Guoheng, and Zhongjing in April, it may fall below 65%. The PE spot market showed differentiation, with non - standard products having stronger prices. As the futures price dropped, the basis strengthened slightly, and coal - based standard products had lower quotes. The export window for polyolefins remained open, with the US dollar - denominated linear price stable and the PP homopolymer price rising by 30 to 1410 dollars [1]. 3.3 Market Condition Analysis - **LLDPE**: Geopolitical factors have led to high raw material prices, increasing PE costs. The post - holiday demand for mulch film is normal, and the packaging film production has recovered, but cost transmission takes time. On the supply side, there is more maintenance and production cuts, a decline in standard product production, and inventory reduction [2]. - **PP**: C3 is affected by supply disruptions from Saudi Arabia and Iran, with strong cost support and high PDH maintenance. There is no new production before the 2605 contract, and downstream demand has improved. However, PDH profit remains low, and attention should be paid to the marginal changes of cracking and PDH devices [2]. 3.4 Trend Intensity - The trend intensity of LLDPE is 1, and that of PP is 1 [4].

1. Report Industry Investment Rating - No information provided in the report 2. Core View of the Report - The LLDPE and PP markets are expected to show strong trends today. The main factors include the geopolitical situation in the Middle East affecting oil prices, the strength of the external crude oil market, neutral inventory levels, and the recovery of downstream demand [4][7] 3. Summary According to Related Catalogs LLDPE Overview - **Fundamentals**: In February, the official manufacturing PMI was 50.2%, up 1.1 percentage points from the previous month, returning to the expansion range. The situation in the Middle East remains tense, with shipping in the Strait of Hormuz basically interrupted, and many countries releasing strategic reserves, leading to a strong external crude oil market. In terms of supply and demand, the demand for agricultural films is good, but high - priced raw materials make enterprises hesitant to stock up. Packaging film demand is mainly based on rigid needs, and the pipe industry has low operating rates and orders. The current LLDPE delivery product spot price is 8300 (-200), and the overall fundamentals are bullish [4] - **Basis**: The basis of the LLDPE 2605 contract is -518, with a premium/discount ratio of -5.9%, which is bearish [4] - **Inventory**: The comprehensive PE inventory is 62.3 tons (-0.2), which is neutral [4] - **Market**: The 20 - day moving average of the LLDPE main contract is upward, and the closing price is above the 20 - day line, which is bullish [4] - **Main positions**: The net short position of the LLDPE main contract is decreasing, which is bearish [4] - **Expectation**: The LLDPE main contract is expected to continue to strengthen, and the price is expected to be strong today [4] - **Leveraging factors**: Cost support and significant crude oil price fluctuations [6] - **Negative factors**: Geopolitical factors [6] PP Overview - **Fundamentals**: In February, the official manufacturing PMI was 50.2%, up 1.1 percentage points from the previous month, returning to the expansion range. The Middle East situation remains tense, and the external crude oil market is strong. Many PDH plants are shut down for maintenance due to raw material issues. The downstream demand for plastic weaving has increased, but enterprises have low production profits and low willingness to start production. The operating rate of BOPP has decreased abnormally, and downstream customers are resistant to high - priced raw materials. The current PP delivery product spot price is 8750 (-100), and the overall fundamentals are bullish [7] - **Basis**: The basis of the PP 2605 contract is -269, with a premium/discount ratio of -3.0%, which is bearish [7] - **Inventory**: The comprehensive PP inventory is 59.6 tons (-6.1), which is neutral [7] - **Market**: The 20 - day moving average of the PP main contract is upward, and the closing price is above the 20 - day line, which is bullish [7] - **Main positions**: The net short position of the PP main contract is increasing, which is bearish [7] - **Expectation**: The PP main contract is expected to continue to strengthen, and the price is expected to be strong today [7] - **Leveraging factors**: Cost support and significant crude oil price fluctuations [8] - **Negative factors**: Geopolitical factors [8] Spot and Futures Market and Inventory Data - **LLDPE**: The spot delivery product price is 8300 (-200), the 05 contract price is 8818 (-98), the basis is -518 (-102), the warehouse receipt is 6401 (-680), the PE comprehensive factory inventory is 62.3 tons, and the social inventory is 61.9 tons [9] - **PP**: The spot delivery product price is 8750 (-100), the 05 contract price is 9019 (-139), the basis is -269 (39), the warehouse receipt is 16051 (341), the PP comprehensive factory inventory is 59.6 tons, and the social inventory is 30.7 tons [9] Supply - Demand Balance Sheets - **Polyethylene**: From 2018 to 2024, the production capacity has been increasing, with a growth rate of 12.4% in 2024. The import dependence has been decreasing, from 46.3% in 2018 to 32.9% in 2024. The apparent consumption has also been increasing, with a consumption growth rate of 1.4% in 2024. The expected production capacity in 2025E is 4319.5, with a growth rate of 20.5% [14] - **Polypropylene**: From 2018 to 2024, the production capacity has been increasing, with a growth rate of 13.5% in 2024. The import dependence has been decreasing, from 18.6% in 2018 to 9.5% in 2024. The apparent consumption has been increasing, with a consumption growth rate of 8.4% in 2024. The expected production capacity in 2025E is 4906, with a growth rate of 11.0% [16]

1. Report Industry Investment Rating - Not provided in the document 2. Core Viewpoints of the Report - Polyolefins: Due to intensified geopolitical conflicts, it is expected to experience a relatively strong oscillation. Key factors to monitor include downstream demand, inventory levels, the situations in Venezuela and Iran, and fluctuations in crude oil prices [8][9]. 3. Summary by Relevant Catalogs Plastic Market Review - On February 13, the closing price of the plastic main contract was 6644 yuan/ton, a week - on - week decrease of 2.47%. The average price of LDPE was 8700 yuan/ton, a decrease of 0.57% compared to the previous period. The average price of HDPE was 7375 yuan/ton, with no change. The average price of LLDPE (7042) in South China was 6930.56 yuan/ton, a decrease of 1.17%. The South China basis of LLDPE was 286.56 yuan/ton, a decrease of 1.79%, and the May - September spread was - 65 yuan/ton (-13) [11]. Key Data Tracking - **Month - to - Month Spread**: The 1 - 5 month spread on February 13, 2026, was 76 yuan/ton (a change of 22 yuan/ton); the 5 - 9 month spread was - 65 yuan/ton (-13); and the 9 - 1 month spread was - 11 yuan/ton (-9) [19]. - **Spot Price**: Provided detailed spot prices of different varieties and regions of plastics on February 13, 2026, with most prices remaining stable [20][21]. - **Cost**: Last week, WTI crude oil closed at 66.31 US dollars/barrel, an increase of 3.50 US dollars/barrel compared to the previous week. Brent crude oil closed at 71.24 US dollars/barrel, an increase of 3.51 US dollars/barrel. The quoted price of anthracite at the Yangtze River port was 1070 yuan/ton, with no change [23]. - **Profit**: The profit of oil - based PE was - 830 yuan/ton, a decrease of 135 yuan/ton compared to the previous week. The profit of coal - based PE was 123 yuan/ton, a decrease of 191 yuan/ton [28]. - **Supply**: This week, the production start - up rate of polyethylene in China was 87.30%, an increase of 1.39 percentage points compared to the previous week. The weekly output of polyethylene was 72.39 tons, a month - on - month increase of 1.61%. This week's maintenance loss was 7.38 tons, a decrease of 0.48 tons compared to the previous week [32]. - **2026 Production Plan**: Multiple companies have new production capacity planned to be put into operation in 2026, with a total planned production capacity of 550 tons [35]. - **Maintenance Statistics**: Many enterprises' polyethylene production lines are under maintenance, and the resumption time of some production lines is uncertain [36]. - **Demand**: This week, the overall start - up rate of domestic agricultural films was 24.74%, a decrease of 5.44% compared to the previous week; the start - up rate of PE packaging films was 20.30%, a decrease of 18.52%; and the start - up rate of PE pipes was 9.33%, a decrease of 14.13% [38]. - **Downstream Production Ratio**: Currently, the production ratio of linear films is the highest, accounting for 35.7%, with a difference of 1.7% from the annual average level. The proportion of low - pressure pipes shows a significant difference from the annual average data, currently accounting for 12.6%, with a difference of 3.9% from the annual average level [42]. - **Inventory**: This week, the social inventory of plastic enterprises was 51.63 tons, an increase of 3.13 tons compared to the previous week, a month - on - month increase of 6.45% [44]. - **Warehouse Receipts**: The number of polyethylene warehouse receipts was 9428 lots, with no change compared to the previous week [48]. PP Market Review - On February 13, the closing price of the polypropylene main contract was 6568 yuan/ton, a decrease of 123 yuan/ton compared to the previous weekend, a week - on - week decrease of 1.84% [53]. Key Data Tracking - **Downstream Spot Price**: Provided prices and price changes of various PP - related products and other plastics on February 13, 2026 [56][59]. - **Basis**: On February 13, the spot price of polypropylene reported by Shengyi.com was 6640 yuan/ton (no change). The PP basis was 72 yuan/ton (123), and the May - September spread was - 32 yuan/ton (1) [61]. - **Month - to - Month Spread**: The 1 - 5 month spread on February 13, 2026, was 13 yuan/ton (a change of 18 yuan/ton); the 5 - 9 month spread was - 25 yuan/ton (7); and the 9 - 1 month spread was 12 yuan/ton (-25) [67]. - **Cost**: Consistent with the cost data of plastics, last week, WTI crude oil closed at 66.31 US dollars/barrel, an increase of 3.50 US dollars/barrel compared to the previous week. Brent crude oil closed at 71.24 US dollars/barrel, an increase of 3.51 US dollars/barrel. The quoted price of anthracite at the Yangtze River port was 1070 yuan/ton, with no change [70]. - **Profit**: The profit of oil - based PP was - 642.23 yuan/ton, a decrease of 16.10 yuan/ton compared to the previous week. The profit of coal - based PP was - 166.21 yuan/ton, a decrease of 4.87 yuan/ton [75]. - **Supply**: This week, the start - up rate of Chinese PP petrochemical enterprises was 75.93%, a decrease of 0.66 percentage points compared to the previous week. The weekly output of PP pellets reached 77.99 tons, a week - on - week increase of 2.19%. The weekly output of PP powder was 4.63 tons, a week - on - week decrease of 18.27% [79]. - **Maintenance Statistics**: Many PP production lines of various enterprises are under maintenance, and the resumption time of some production lines is uncertain [83]. - **Demand**: This week, the average start - up rate of PP downstream industries was 41.78% (-8.06%). The start - up rate of plastic weaving was 27.86% (-8.88%), the start - up rate of BOPP was 60.25% (-4.30%), the start - up rate of injection molding was 29.74% (-23.28%), and the start - up rate of pipes was 29.53% (-4.17%) [85]. - **Import and Export Profit**: This week, the import profit of polypropylene was - 379.05 US dollars/ton, a decrease of 27.70 US dollars/ton compared to the previous week. The export profit was - 32.38 US dollars/ton, an increase of 14.19 US dollars/ton compared to the previous week [91]. - **Inventory**: This week, the domestic inventory of polypropylene was 39.12 tons (+5.92%); the inventory of the two major oil companies decreased by 7.30% month - on - month; the inventory of traders decreased by 3.55% month - on - month; and the port inventory increased by 14.44% month - on - month. The finished product inventory of large - scale plastic - weaving enterprises was 495.28 tons, a month - on - month decrease of 41.02%, and the raw material inventory of BOPP was 15.10 days, a month - on - month increase of 0.40% [93][97]. - **Warehouse Receipts**: The number of polypropylene warehouse receipts was 18679 lots, an increase of 1475 lots compared to the previous week [101].

Report Summary 1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - Polyolefin futures declined slightly, with Sinopec and PetroChina keeping prices stable for linear LL and拉丝PP. The market currently focuses on supply improvement expectations, and the macro - to - commodity transmission has increased. Short - term polyolefins follow cost fluctuations. The current spot drive for polyolefins is relatively limited, and the market pays more attention to the driving rhythm of macro factors. With the long holiday approaching, positions should be gradually controlled [2] 3. Summary by Relevant Catalogs Futures Market - **Prices**: For linear LL, the 1 - month, 5 - month, and 9 - month futures prices were 6800, 6734, and 6781 yuan/ton respectively, with daily declines of - 54 (- 0.79%), - 53 (- 0.78%), and - 55 (- 0.80%) yuan/ton. For拉丝PP, the 1 - month, 5 - month, and 9 - month futures prices were 6645, 6648, and 6674 yuan/ton respectively, with daily declines of - 36 (- 0.54%), - 45 (- 0.67%), and - 47 (- 0.70%) yuan/ton [2] - **Trading Volume**: The trading volumes of linear LL for 1 - month, 5 - month, and 9 - month futures were 171, 258012, and 18078 respectively, while for拉丝PP, they were 56, 210709, and 14456 respectively [2] - **Open Interest**: The open interests of linear LL for 1 - month, 5 - month, and 9 - month futures were 1082, 501315, and 69632 respectively, with changes of 54, - 2602, and 202 respectively. For拉丝PP, the open interests were 2673, 479342, and 110409 respectively, with changes of - 12, - 7495, and - 1177 respectively [2] - **Spreads**: For linear LL, the current spreads of 1 - month - 5 - month, 5 - month - 9 - month, and 9 - month - 1 - month were 66, - 47, and - 19 respectively, compared with previous values of 67, - 49, and - 18. For拉丝PP, the current spreads were - 3, - 26, and 29 respectively, compared with previous values of - 12, - 28, and 40 [2] Raw Material and Spot Market - **Raw Materials**: The current prices of methanol futures, Shandong propylene, South China propane, PP recycled materials, North China powder materials, and mulch film were 2234 yuan/ton, 6440 yuan/ton, 632 dollars/ton, 5600 yuan/ton, 6490 yuan/ton, and 8700 yuan/ton respectively. Most prices were stable compared with the previous day [2] - **Mid - stream**: The current price ranges of linear LL in the East China, North China, and South China markets were 6600 - 7000 yuan/ton, 6500 - 6900 yuan/ton, and 6800 - 7050 yuan/ton respectively. For拉丝PP, the price ranges were 6500 - 6650 yuan/ton, 6450 - 6600 yuan/ton, and 6600 - 6800 yuan/ton respectively [2] News - On Thursday (February 12), the settlement price of West Texas Intermediate crude oil futures for March 2026 on the New York Mercantile Exchange was $62.84 per barrel, down $1.79 (2.77%) from the previous trading day, with a trading range of $62.39 - $65.1. The settlement price of Brent crude oil futures for April 2026 on the London Intercontinental Exchange was $67.52 per barrel, down $1.88 (2.71%) from the previous trading day, with a trading range of $67.09 - $69.85 [2]

Report Information - Report Name: Polyolefin Morning Report [2] - Date: February 11, 2026 [2] - Author: Zhu Tianyi from Dayue Futures Investment Consulting Department [3] Core Views - The LLDPE and PP markets are expected to fluctuate today. The suspension of OPEC's production increase in the first quarter and geopolitical factors affecting oil prices provide strong cost support, but downstream demand is weak due to the approaching Spring Festival [4][7] - The main logic for both LLDPE and PP is oversupply, and the supply - demand marginal changes are sensitive [6][8] LLDPE Analysis Fundamental Analysis - The official manufacturing PMI in January was 49.3%, down 0.8 percentage points from the previous month, falling into the contraction range. OPEC+ decided to suspend the production increase plan in Q1 2026 due to weak seasonal demand. Crude oil has returned to a volatile state, and polyolefins have followed with large fluctuations. Near the Spring Festival, most agricultural film and packaging film enterprises have shut down, with few orders. The current LLDPE delivery product spot price is 6600 (-50), and the overall fundamentals are neutral [4] Basis Analysis - The basis of the LLDPE 2605 contract is -175, with a premium - discount ratio of -2.6%, which is bearish [4] Inventory Analysis - The comprehensive PE inventory is 40.3 tons (+5.4), which is bullish [4] Market Analysis - The 20 - day moving average of the LLDPE main contract is upward, and the closing price is below the 20 - day line, which is neutral [4] Main Position Analysis - The net position of the LLDPE main contract is short, and the short position is decreasing, which is bearish [4] Expectation - The LLDPE main contract is expected to fluctuate today [4] Factors - Bullish factor: Cost support [6] - Bearish factor: Weak downstream demand [6] PP Analysis Fundamental Analysis - Similar to LLDPE, the official manufacturing PMI in January was 49.3%, down 0.8 percentage points from the previous month. OPEC+ suspended the production increase plan in Q1 2026. Near the Spring Festival, the overall start - up of plastic weaving has significantly declined, and pipe demand has also been affected by the Spring Festival shutdown. The current PP delivery product spot price is 6650 (-0), and the overall fundamentals are neutral [7] Basis Analysis - The basis of the PP 2605 contract is -38, with a premium - discount ratio of -0.6%, which is bearish [7] Inventory Analysis - The comprehensive PP inventory is 41.6 tons (+1.5), which is bullish [7] Market Analysis - The 20 - day moving average of the PP main contract is upward, and the closing price is below the 20 - day line, which is neutral [7] Main Position Analysis - The net position of the PP main contract is short, and the short position is decreasing, which is bearish [7] Expectation - The PP main contract is expected to fluctuate today [7] Factors - Bullish factor: Cost support [8] - Bearish factor: Weak downstream demand [8] Supply - Demand Balance Tables Polyethylene - From 2018 - 2024, the capacity, production, and net import volume of polyethylene have changed. The import dependence has generally shown a downward trend, and the consumption growth rate has fluctuated. The expected capacity in 2025E is 4319.5 [14] Polypropylene - From 2018 - 2024, the capacity, production, and net import volume of polypropylene have changed. The import dependence has generally decreased, and the consumption growth rate has also fluctuated. The expected capacity in 2025E is 4906 [16]

Report Information - Report Title: Polyolefin Morning Report [2] - Report Date: February 10, 2026 [2] - Analyst: Zhu Tianyi from Dayue Futures Investment Consulting Department [3] Industry Investment Rating - Not provided in the report Core Viewpoints - The LLDPE and PP markets are expected to fluctuate today. The suspension of OPEC's production increase in the first quarter and geopolitical factors have led to strong cost support, but the downstream demand is weak due to the approaching Spring Festival [4][7] Summary by Section LLDPE Overview - **Fundamentals**: The official manufacturing PMI in January was 49.3%, down 0.8 percentage points from the previous month, falling into the contraction range. OPEC+ suspended the production increase plan in the first quarter of 2026 due to weak seasonal demand. The current crude oil has returned to volatility, and polyolefins have followed with large fluctuations. Near the Spring Festival, most agricultural film and packaging film enterprises have stopped work, with few overall orders. The current LLDPE delivery spot price is 6650 (+30), and the overall fundamentals are neutral [4] - **Basis**: The basis of the LLDPE 2605 contract is -71, with a premium/discount ratio of -1.1%, which is bearish [4] - **Inventory**: The comprehensive PE inventory is 403,000 tons (+54,000), which is bullish [4] - **Disk**: The 20-day moving average of the LLDPE main contract is upward, and the closing price is below the 20-day line, which is neutral [4] - **Main Position**: The net short position of the LLDPE main contract has increased, which is bearish [4] - **Expectation**: The LLDPE main contract is expected to fluctuate today. With OPEC's suspension of production increase in the first quarter and geopolitical factors affecting oil prices, the cost support is strong. The industrial inventory is neutral, and the downstream has stopped work near the Spring Festival [4] PP Overview - **Fundamentals**: Similar to LLDPE, the official manufacturing PMI in January was 49.3%, down 0.8 percentage points from the previous month, falling into the contraction range. OPEC+ suspended the production increase plan in the first quarter of 2026 due to weak seasonal demand. The current crude oil has returned to volatility, and polyolefins have followed with large fluctuations. Near the Spring Festival, the overall start-up of plastic weaving has significantly declined, and the demand for pipes has also been affected by the Spring Festival shutdown. The current PP delivery spot price is 6650 (-0), and the overall fundamentals are neutral [7] - **Basis**: The basis of the PP 2605 contract is 20, with a premium/discount ratio of 0.3%, which is neutral [7] - **Inventory**: The comprehensive PP inventory is 416,000 tons (+15,000), which is bullish [7] - **Disk**: The 20-day moving average of the PP main contract is upward, and the closing price is below the 20-day line, which is neutral [7] - **Main Position**: The net short position of the PP main contract has decreased, which is bearish [7] - **Expectation**: The PP main contract is expected to fluctuate today. With OPEC's suspension of production increase in the first quarter and geopolitical factors affecting oil prices, the cost support is strong. The industrial inventory is neutral, and the downstream has stopped work near the Spring Festival [7] Supply and Demand Balance Tables - **Polyethylene**: From 2018 to 2024, the production capacity, output, and apparent consumption of polyethylene have generally shown an upward trend, while the import dependence has gradually decreased. The expected production capacity in 2025E is 4.3195 billion tons, with a growth rate of 20.5% [14] - **Polypropylene**: From 2018 to 2024, the production capacity, output, and apparent consumption of polypropylene have also generally shown an upward trend, and the import dependence has gradually decreased. The expected production capacity in 2025E is 4.906 billion tons, with a growth rate of 11.0% [16] Other Information - **Spot and Futures Market Data**: The report provides detailed spot and futures market data for LLDPE and PP, including prices, changes, and inventory information [9] - **Charts**: The report includes multiple charts showing the price trends, basis, inventory, and production cash flow of LLDPE and PP [10][12][17]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report Plastic Part - This week's view: In February and March, there are few maintenance plans. As the Spring Festival approaches, demand slows down, and the situation of weak current reality and strong future expectations continues [6]. - Supply: In 2025, the total effective capacity increased by 16%. New capacity will be put into production at a low rate in the first half of the year and a high rate in the second half. Only BASF Zhanjiang has new capacity for the 05 contract, but the existing capacity has increased significantly compared to the same period. The overall PE operating rate is 85.9%, up 0.5%. Some plants had short - term shutdowns this week, and supply increased slightly month - on - month. The maintenance plans in February and March are expected to decline month - on - month. The production of standard products has increased, and the ethylene derivative profit for PE is acceptable, so the operating rate is expected to remain high [6]. - Demand: In the second week before the Spring Festival, the overall downstream operating rate declined rapidly. The film factory maintained a relatively high load, while the demand for greenhouse films basically stopped. The packaging film's phased inventory replenishment has ended, and new orders are limited. The demand from the food and daily - use product sectors has passed its peak, and the operating rate of the injection - molding industry is expected to continue to decline. After downstream enterprises stocked up some finished products, due to the raw material prices not meeting expectations, large - scale inventory replenishment is limited, and the raw material inventory remains at a medium - low level. Attention should be paid to post - festival restocking [6]. - View: Polyolefins have adjusted to a neutral valuation. Expectations regarding the Middle East geopolitical situation and the Two Sessions have not yet materialized. The upstream inventory has been well - reduced before the Spring Festival, and the inventory situation of the industry has improved compared to December. Therefore, a significant decline is not expected. The ethylene performance is weak, and the PE profit is acceptable compared to other derivatives. With limited maintenance plans in February and March, the supply is expected to remain at a relatively high level, so the PE cost - end valuation is moderately high after the repair. The greenhouse film and packaging film industries are entering a seasonal off - season, and although there is an expectation of improvement for mulch films, the pre - festival demand support may be limited. The supply - side pressure will gradually increase at the end of the year. Therefore, from the perspective of the upstream, inventory control is still active, and there is no obvious price - topping behavior. After the mid - and downstream replenished their inventories, the explicit inventory structure is relatively healthy, with a slightly higher mid - stream inventory. Attention should be paid to whether the inventory can continue to be transferred downstream. Before the Spring Festival, the supply may increase while the demand decreases, but the weak - reality pricing is limited, and the market may fluctuate strongly [6]. - Strategy: 1) Unilateral: Wait and see with a fluctuating trend. 2) Inter - period: The willingness to hold inventory is lower than before. Due to the seasonal inventory accumulation during the Spring Festival, the flexibility of the spot price is limited. With the continuation of strong expectations, conduct inter - period reverse arbitrage when the price is high. 3) Inter - variety: Not recommended for now [6]. Polypropylene Part - This week's view: PDH plants have concentrated maintenance in the first quarter, and the C3 cost side provides strong support [101]. - Supply: In 2025, the total effective capacity increased by 12.7%, and the annual output increased by 16.7%. The overall capacity is in excess, and the profit has been compressed to a historical low. In the first quarter, due to the continuous low profit of PDH plants, the planned maintenance has increased, and the supply center has declined to a relatively low level compared to the same period. The weekly operating rate is 73.9%, down 0.8%. Some plants have implemented maintenance, and the operating rate may be difficult to return to a high level, providing marginal support. Recently, PDH plants have made many inquiries about propane for March, and attention should be paid to the resumption time. The domestic demand is weak, and the short - term PP import volume is limited. Fluctuations in freight rates and general overseas demand restrict PP exports. This week, the domestic FOB price increase is greater than that overseas, and the number of signed orders has decreased. The import and export volume is expected to maintain a basic level in the short term [101]. - Demand: The downstream operating rate is differentiated. The terminal提货 rhythm slowed down in the second half of the week, and the finished - product inventory is higher than last year. The demand for plastic weaving has slowed down as the construction and logistics industries gradually enter the holiday. The procurement enthusiasm for BOPP films is good, and they continue to enter the market to purchase annual orders. The order cycle of film factories continues to extend. Although the operating rate has slightly declined this week due to environmental protection and production - line technological transformation. The demand for non - woven fabrics for Spring Festival packaging is increasing, and the operating rate remains stable. Downstream factories such as CPP and daily - use injection - molding are actively reducing their finished - product inventory and shutting down for maintenance. The new round of national subsidy policies and the Spring Festival cleaning have increased the demand for floor cleaners, etc. The demand for home appliances and automobiles is showing an upward trend, especially in the home appliance sector, where sales have increased significantly, which supports the operating rate of the modified PP industry. The injection - molding terminal's willingness to replenish inventory is weak, and as workers return home, the operating rate is expected to decline seasonally [102]. - View: The raw - material side, including crude oil and propane, shows a strong performance, and the propylene spot is also strong. The profits of oil - based, propane - based, and propylene - based processes are compressed, and the coal - based profit is at a low level. The overall weighted profit is compressed. Some PDH supply elasticity has been realized marginally, and the cost is significantly different from that of PE. The plastic - weaving industry is showing marginal weakness, while downstream industries such as BOPP and modified PP have acceptable demand due to the Spring Festival, and the operating rate is temporarily supported. However, other products are gradually entering the off - season, and the off - season demand cannot resonate, and some speculative demand is suppressed. In terms of supply, the maintenance scale in the first quarter is currently high, and the supply center has declined month - on - month. The overall PP inventory has been reduced. The upstream had good pre - sales, and some low - price inventory has been transferred to the mid - stream. However, facing the Spring Festival holiday, the confidence of the mid - and downstream in the future market is average, and the sustainability of procurement is questionable. The first quarter may gradually enter a situation of both supply and demand reduction, and the price may fluctuate [103]. - Strategy: 1) Unilateral: Fluctuate. 2) Inter - period: The PDH maintenance rate is still high, and with both supply and demand decreasing, the inter - period spread may fluctuate. 3) Inter - variety: Short the L - PP spread when it is high [103]. 3. Summary According to the Directory Plastic Part Price & Spread - Basis/Month Spread: The futures price has adjusted, and the spot prices in various regions have declined. The basis has remained stable, and the number of warehouse receipts is at a high level. The 5 - 9 month spread has fluctuated around - 50 this week due to the seasonal weakness of the downstream and the slower inventory replenishment than before, while the strong expectations continue [14]. - PE Outer - Market Price: The CIF price in China has increased by $10 - 20. The cold wave in the United States and the Middle East geopolitical situation have boosted the willingness of overseas holders, and the price is strong. The price comparison between Europe, Southeast Asia, and China has been repaired. The HD film performance is weak, while the LD and injection - molding products are strong [16]. - Import Window: The import window has been compressed. Overseas suppliers are raising prices, and the non - standard products are at a neutral level year - on - year. The LD import profit is at a relatively high level this year. The price comparison between the United States and the Middle East has declined. Although the Iranian supply offers are acceptable this week, the domestic market is cautious, and there is an expectation of a slight decline in imports [23]. - Non - Standard Spread: The HD standard - product price comparison has weakened, while the LD price comparison has remained stable. Some plants have switched back to producing standard products, and the production of standard products has increased [26]. - Upstream Price: Crude oil is strong, naphtha has followed the increase, and the ethylene monomer has weakened. The coal price has rebounded and then remained stable [29]. - Production Profit: The oil - based profit has limited repair, the coal - based profit has slightly improved, the ethane - based profit has been compressed due to the cold wave in the United States, and the profit from purchasing ethylene externally has significantly repaired recently [35]. Supply - New Capacity: From the end of 2024 to the first half of 2025, there was concentrated production of standard products, with the nominal capacity increasing by 19.2% and the effective capacity increasing by 16.7%. Before the 2605 contract, there is limited new capacity. Attention should be paid to the production progress of Huajin and Zhongsha Gulei refineries. BASF Zhanjiang started trial production at the end of December, and attention should be paid to its production ramp - up progress [40]. - Existing Capacity: From the end of 2024 to the first half of 2025, the capacity base has increased, and the total supply has increased significantly. The operating rate is at a neutral level, and the maintenance volume is relatively high compared to the same period, but it will decline later [42]. - Standard - Product Supply: The LLDPE capacity has been concentratedly put into production, and the production ratio has increased from a low level. The maintenance scale in February has declined month - on - month, and the supply has increased [47]. - Maintenance Plan: The maintenance plans for the first quarter have not been fully announced. The maintenance plans in February and March are lower than the same period last year [50]. - Import: The import volume was high in December. In 2025, the Sino - US trade friction intensified, and the reduction mainly came from the United States. The pressure on the United States to clear inventory has eased, and the cold wave has led to a strong local ethylene market. The Middle East geopolitical situation is uncertain, and the import volume may decline month - on - month [56]. Demand & Inventory - Overall Demand: The overall downstream demand is accelerating its decline. The agricultural film operating rate is accelerating its decline, and the profit of mulch films is compressed year - on - year. The packaging film operating rate is higher than the same period last year, but the enthusiasm for raw - material inventory replenishment is limited. The profit of the industry is at a high level, but the number of orders is slightly lower than the same period. The demand for food and tobacco and alcohol during the Spring Festival has been fulfilled, and there may be limited improvement in the future. The construction of northern terminals has declined seasonally, and the pipe - making industry mainly replenishes inventory after the Spring Festival. The raw - material inventory is slightly lower than the same period [71][78][85]. - Inventory: The total supply has continued to increase. The production of standard products has increased with the production ratio. Previously, the mid - stream established positions in the futures and spot markets, and agents placed orders, transferring the inventory to the mid - stream. The standard - product factory inventory has accumulated, the LD and HD factory inventories have been reduced, and the mid - stream inventory reduction has been difficult [64][69]. Polypropylene Part Price & Spread - Basis/Month Spread: The futures price has adjusted. As the inventory replenishment before the Spring Festival is approaching the end, the basis has limited strengthening. The upstream had many pre - sales before, and the selling pressure before the festival is temporarily not large. The mid - stream has established a large amount of inventory, and the number of warehouse receipts remains at a high level. The month spread fluctuates [110]. - PP Outer - Market: The CIF price in China has rebounded. The quotes in north - western Europe have rebounded, and the price comparison in Southeast Asia has strengthened. The import window has been compressed month - on - month, the exchange rate has strengthened, and the profit from exporting to Southeast Asia has limited increase [117]. - Non - Standard Spread: The regional spread of拉丝 has slightly narrowed. In terms of varieties, the spread between拉丝 and low - melt copolymer is the same as the same period last year. This week, the upstream production enterprises'拉丝 production ratio has remained at a relatively low level, and the spread between high - and low - melt products has significantly narrowed [125]. - Upstream Price: Crude oil, naphtha, and propylene are strong. The coal price remains stable [131]. - Production Profit: The overall profit is compressed. The PDH - based valuation remains at a low level, and the coal - based and propylene - based process profits are in the red [138]. Supply - New Capacity: From the end of 2024 to the middle of 2025, there was a large - scale production of new capacity, with the effective capacity increasing by 12.7%. Before the 2605 contract, there is limited new capacity. Attention should be paid to the production progress of Huajin and Zhongsha Gulei refineries [146]. - Existing Capacity: From the end of 2024 to the first half of 2025, the capacity base has increased, and the total supply has increased significantly. The operating rate has recently declined, and the maintenance volume is higher than the same period [147]. - Supply Details: The production of oil - based and PDH - based products is at a high level. The maintenance in the first quarter has increased significantly compared to December, and there is an expectation of supply reduction. Attention should be paid to the implementation [152]. - Maintenance Plan: The subsequent maintenance scale will decline slightly. The monthly maintenance volume in the first quarter is higher than the same period last year [157]. - Import and Export: The domestic production increase is large, the import volume is at a low level year - on - year, and the export volume has increased significantly. However, part of the export comes from the processing of imported materials by southern plants. Recently, the domestic - to - overseas price comparison is weak, and the overseas demand is general. The export volume will maintain a basic level. The export to Southeast Asia and South Asia has increased significantly [163][165]. Demand & Inventory - Overall Demand: The plastic - weaving operating rate is declining and may continue to weaken with the Spring Festival. The packaging operating rate is the same as the same period last year, and the enthusiasm for raw - material inventory replenishment is better than other products. The industry profit is at a high level, and the order cycle continues to increase. The profit of tape master rolls is compressed, and they are actively reducing their finished - product inventory, but it is still higher than the same period. The number of orders has declined seasonally, which may suppress the elasticity of BOPP, etc. The CPP is actively reducing its finished - product inventory, and the raw - material inventory is at a high level. The demand for PP non - woven fabrics is acceptable, and the raw - material inventory has slightly accumulated. The pipe - making operating rate is declining, and the injection - molding operating rate has increased against the season [179][184][190][193][195]. - Inventory: The supply has declined temporarily. The upstream is actively reducing inventory, and the low - price inventory has been transferred to the mid - stream. The oil - based inventory is at a high level year - on - year, and the standard - product explicit factory inventory is at a neutral level [172][174].

Report Overview - Report Title: Polyolefin Morning Report - Date: February 6, 2026 - Author: Zhu Tianyi from Dayue Futures Investment Consulting Department Report's Investment Rating - Not provided in the report Core Viewpoints - The overall fundamentals of LLDPE and PP are neutral, and their futures prices are expected to fluctuate today [4][7] - The suspension of OPEC's production increase in Q1 and geopolitical factors affecting oil prices provide strong cost support for polyolefins [4][7] - The downstream demand for both LLDPE and PP is weak, and the supply-demand relationship is sensitive to marginal changes [6][8] Summary by Section LLDPE Overview - **Fundamentals**: The official manufacturing PMI in January was 49.3%, down 0.8 percentage points from the previous month, falling into the contraction range. OPEC+ suspended its production increase plan in Q1 2026 due to weak seasonal demand. Affected by geopolitical factors, the crude oil price is strong and volatile, driving the polyolefins with poor device profits and strong cost support to follow the fluctuations. Near the Spring Festival, the demand from the agricultural film and packaging film industries is weak. The current spot price of LLDPE delivery products is 6,750 (unchanged), and the overall fundamentals are neutral [4] - **Basis**: The basis of the LLDPE 2605 contract is -27, with a premium/discount ratio of -0.4%, which is neutral [4] - **Inventory**: The comprehensive PE inventory is 403,000 tons (+54,000 tons), which is neutral [4] - **Market**: The 20-day moving average of the LLDPE main contract is upward, and the closing price is above the 20-day line, showing a bullish trend [4] - **Main Position**: The net position of the LLDPE main contract is short, and the short position is increasing, showing a bearish trend [4] - **Expectation**: The LLDPE main contract is expected to fluctuate today [4] PP Overview - **Fundamentals**: Similar to LLDPE, the macro environment and crude oil situation affect PP. PDH device maintenance is relatively high. Near the Spring Festival, the demand for plastic weaving and pipes is weak. The current spot price of PP delivery products is 6,650 (-40), and the overall fundamentals are neutral [7] - **Basis**: The basis of the PP 2605 contract is -26, with a premium/discount ratio of -0.4%, which is neutral [7] - **Inventory**: The comprehensive PP inventory is 416,000 tons (+15,000 tons), showing a relatively high level [7] - **Market**: The 20-day moving average of the PP main contract is upward, and the closing price is above the 20-day line, showing a bullish trend [7] - **Main Position**: The net position of the PP main contract is short, and the short position is decreasing, showing a bearish trend [7] - **Expectation**: The PP main contract is expected to fluctuate today [7] Supply-Demand Balance Sheets - **Polyethylene**: From 2018 - 2024, the capacity, production, and apparent consumption of polyethylene generally showed an upward trend, with the capacity growth rate reaching 20.5% in 2025E [14] - **Polypropylene**: From 2018 - 2024, the capacity, production, and apparent consumption of polypropylene also generally increased, with the capacity growth rate expected to be 11.0% in 2025E [16] Other Information - The report also includes data on spot prices, futures prices, inventory changes, production cash flows, and internal and external price differences of LLDPE and PP, as well as corresponding trend charts [9][10][12][17][19][21][23][25][27]

1. Report Industry Investment Rating - No information provided 2. Core Viewpoint of the Report - The LLDPE and PP markets are expected to be volatile today. For LLDPE, factors such as cost support from oil prices and neutral industry inventory are considered, but downstream demand is weak. For PP, similar factors like cost support and increased PDH device maintenance are noted, along with weak downstream demand in the off - season [4][7] 3. Summary by Related Catalogs LLDPE Overview - **Fundamentals**: The official January manufacturing PMI was 49.3%, down 0.8 percentage points from the previous month, entering the contraction range. OPEC+ suspended the Q1 2026 production increase plan. Due to geopolitical disturbances, oil prices are strong with short - term declines, affecting polyolefins. Near the Spring Festival, demand from the agricultural film and packaging film industries is weak. The current LLDPE delivery product spot price is 6880 (-60), and the overall fundamentals are neutral [4] - **Basis**: The LLDPE 2605 contract basis is 2, with a premium/discount ratio of 0.0%, which is neutral [4] - **Inventory**: PE comprehensive inventory is 34.8 tons (-3.1), which is relatively high [4] - **Market**: The 20 - day moving average of the LLDPE main contract is upward, and the closing price is above the 20 - day line, which is bullish [4] - **Main Position**: The net position of the LLDPE main contract is short, with short positions decreasing, which is bearish [4] - **Expectation**: The LLDPE main contract is expected to be volatile. With OPEC's suspension of production increase in Q1 and geopolitical factors affecting oil prices, there is strong cost support, and the industry inventory is neutral [4] - **Likely Factors**: Cost support and strong oil prices are positive factors, while weak downstream demand year - on - year is a negative factor. The main logic is oversupply, and the supply - demand margin is sensitive [6] PP Overview - **Fundamentals**: Similar to LLDPE, the official January manufacturing PMI was 49.3%, down 0.8 percentage points from the previous month. OPEC+ suspended the Q1 2026 production increase plan. Geopolitical disturbances affect oil prices and polyolefins. PDH device maintenance is relatively high. Near the Spring Festival, demand from the plastic weaving and pipe industries is weak. The current PP delivery product spot price is 6720 (-30), and the overall fundamentals are neutral [7] - **Basis**: The PP 2605 contract basis is 6, with a premium/discount ratio of 0.1%, which is neutral [7] - **Inventory**: PP comprehensive inventory is 40.1 tons (-3.2), which is relatively high [7] - **Market**: The 20 - day moving average of the PP main contract is upward, and the closing price is above the 20 - day line, which is bullish [7] - **Main Position**: The net position of the PP main contract is short, with short positions increasing, which is bearish [7] - **Expectation**: The PP main contract is expected to be volatile. With OPEC's suspension of production increase in Q1 and geopolitical factors affecting oil prices, there is strong cost support, the industry inventory is neutral, and PDH device maintenance has increased [7] - **Likely Factors**: Cost support and strong oil prices are positive factors, while the off - season of downstream demand is a negative factor. The main logic is oversupply, and the supply - demand margin is sensitive [8] Spot and Futures Market and Inventory - **LLDPE**: The spot delivery product price is 6880 (-60), the 05 contract price is 6878 (-136), the basis is 2, the warehouse receipt is 9308 (-71), the PE comprehensive factory inventory is 34.8 tons, and the social inventory is 48.5 tons [9] - **PP**: The spot delivery product price is 6720 (-30), the 05 contract price is 6714 (-110), the basis is 6, the warehouse receipt is 17223 (-13), the PP comprehensive factory inventory is 40.1 tons, and the social inventory is 26.9 tons [9] Supply - Demand Balance Sheet - **Polyethylene**: From 2018 - 2024, capacity, production, net imports, and other data are provided, with capacity showing an overall increasing trend. For example, in 2024, the capacity was 3584.5, with a growth rate of 12.4% [14] - **Polypropylene**: Similar to polyethylene, from 2018 - 2024, capacity, production, net imports, and other data are provided, and capacity also shows an increasing trend. For example, in 2024, the capacity was 4418.5, with a growth rate of 13.5% [16]

1. Report Industry Investment Rating - No information provided regarding the report industry investment rating 2. Core Viewpoints - In February 2026, polyolefins are expected to fluctuate within a range. The plastic will follow the weak market sentiment, and the supply - demand pattern of plastic before the Spring Festival will improve little. The L - PP spread is expected to decline due to new plastic production capacity and the non - start of concentrated demand for mulch films [3] 3. Summary by Relevant Catalogs Market Analysis - Plastic operating rate has risen to around 90% (neutral level), while PP enterprise operating rate has dropped to around 78.5% (low level). New production capacities of 500,000 tons/year for BASF (Guangdong) FDPE and 300,000 tons/year for Yulong Petrochemical LDPE/EVA were put into operation in January 2026. There are limited planned maintenance devices in February, and the supply pressure remains high [3] - As of the week ending January 30, PE downstream operating rate decreased 1.77 percentage points to 37.76%, and PP downstream operating rate decreased 0.79 percentage points to 52.08%. The overall PE downstream operating rate is at a relatively low level in the same lunar period in recent years, while the PP downstream operating rate is at a neutral level [3] - At the end of January, petrochemical inventory was quickly depleted and is currently at a relatively low level in the same period in recent years. The cost support from crude oil is limited due to the cooling of geopolitical situation and the weakening of the cold snap. The downstream operating rate is expected to continue to decline, and pre - holiday stocking is limited [3] Market Review - In late January, the increase in spot prices was less than that in futures prices, and the basis of plastics and PP both dropped to a relatively low level [13][20] Production and Operating Rate - In December 2025, PE maintenance volume increased 12.70% month - on - month to 440,000 tons and 13.75% year - on - year. PE production increased 4.08% month - on - month to 3.0088 million tons and 19.55% year - on - year. The PE operating rate increased 0.12 percentage points to 83.56% month - on - month in December 2025 and is currently around 90% [25][29] - In December 2025, PP maintenance volume increased 0.54% month - on - month to 710,200 tons and 4.23% year - on - year. PP production increased 2.67% month - on - month to 3.5579 million tons and 15.51% year - on - year. The PP operating rate decreased 0.61 percentage points to 77.82% month - on - month in December 2025 and is currently around 78.5% [33][37] Import and Export - In December 2025, China's PE imports were 1.3299 million tons (up 4.62% year - on - year and 25.21% month - on - month), and exports were 92,100 tons (up 58.30% year - on - year and 7.27% month - on - month). The net imports of PE in December 2025 were 1.2378 million tons (up 2.04% year - on - year). The LLDPE net imports are expected to continue to decline in 2026 [43] - In December 2025, China's PP imports were 332,400 tons (down 1.28% year - on - year and up 9.02% month - on - month), and exports were 267,800 tons (up 35.80% year - on - year and 4.04% month - on - month). PP net imports are expected to continue to decline [49] Downstream of Polyolefins - In 2025, the cumulative production of plastic products was 79.1991 million tons (down 0.2% year - on - year), and the export amount was 748.7 billion yuan (down 1.3% year - on - year) [53] - As of the week ending January 30, the PE downstream operating rate decreased to 37.76%, and the PP downstream operating rate decreased to 52.08%. The plastic film orders and woven bag orders both decreased slightly [57] Polyolefin Inventory - As of January 30, the petrochemical early - morning inventory decreased by 30,000 tons to 445,000 tons, which was 115,000 tons lower than the same lunar period last year. The petrochemical inventory is currently at a relatively low level in the same period in recent years [61] Polyolefin Profit - In January, except for the oil - based process, the profits of other LLDPE processes rebounded, and the profits of coal - based and ethylene - based processes turned positive. The profits of all PP processes were still in the red, but the losses of the MTO, PDH, and coal - based processes narrowed [64]