1. Report Industry Investment Rating - No information provided in the document 2. Core Views of the Report - The geopolitical conflict in the Middle East is expected to cool down, and the crude oil sector is oscillating at a high level. Against the background of low profits in various polyolefin processes, the short - term rebound of polyethylene (PE) is weaker than that of polypropylene (PP) due to the addition of new PE production capacity and large import volume. With the arrival of the seasonal peak season, the profit of BOPP in the demand side is better than in previous years, which may become an important marginal variable in the demand side. The relief of supply - side pressure may help the polyolefin prices continue to rebound [17] - This week's forecast: The reference oscillation range for polyethylene (LL2605) is (8600 - 8900); for polypropylene (PP2605), it is also (8600 - 8900). The recommended strategy is to gradually take profit on the long position of PP2605 - PP2609 (positive spread strategy) [17] 3. Summary According to the Directory 3.1 Weekly Assessment and Strategy Recommendation - **Market Information**: The geopolitical conflict in the Middle East is cooling down, and the crude oil sector is oscillating at a high level. In terms of valuation, the weekly increase of polyethylene is (spot > futures > cost), and that of polypropylene is also (spot > futures > cost). In the cost side, last week, WTI crude oil rose by 16.86%, Brent crude oil rose by 13.00%, coal price fell by - 2.52%, methanol rose by 6.90%, ethylene rose by 19.80%, propylene rose by 12.96%, and propane rose by 6.85%. The cost side rebounded [15] - **Supply Side**: The PE capacity utilization rate is 81.77%, a month - on - month decrease of - 5.72%, a year - on - year decrease of - 3.78%, and a decrease of - 12.34% compared with the five - year average. The PP capacity utilization rate is 68.42%, a month - on - month decrease of - 7.05%, a year - on - year decrease of - 16.21%, and a decrease of - 17.20% compared with the five - year average [15] - **Import and Export**: In December, the domestic PE import was 1.041 million tons, a month - on - month decrease of - 7.05% and a year - on - year decrease of - 21.44%. The domestic PP import was 205,800 tons, a month - on - month increase of 14.81% and a year - on - year decrease of - 4.83%. The import profit decreased, and the PE supply from North America decreased, reducing the import pressure. In December, the PE export was 63,000 tons, a month - on - month decrease of - 10.00% and a year - on - year increase of 8.87%. The PP export was 230,500 tons, a month - on - month increase of 2.89% and a year - on - year increase of 29.81%. The continuous appreciation of the RMB exchange rate puts pressure on the import side [15] - **Demand Side**: The downstream operating rate of PE is 30.00%, a month - on - month increase of 4.82% and a year - on - year decrease of - 22.34%. The downstream operating rate of PP is 45.87%, a month - on - month increase of 24.85% and a year - on - year decrease of - 7.58%. With the arrival of the seasonal peak season, the downstream operating rate of polyolefins rebounds [16] - **Inventory**: The inventory of PE production enterprises is 575,400 tons, a month - on - month increase of 7.31% and a year - on - year increase of 4.13%; the inventory of PE traders is 50,000 tons, a month - on - month decrease of - 13.39%. The inventory of PP production enterprises is 680,000 tons, a month - on - month increase of 3.80% and a year - on - year decrease of - 2.31%; the inventory of PP traders is 206,100 tons, a month - on - month decrease of - 3.08%; the PP port inventory is 74,700 tons, a month - on - month decrease of - 8.23%. Coal - based enterprises have significantly reduced their inventory [16] 3.2 Spot and Futures Market - Multiple charts are provided to show the term structure, price, basis, spread, trading volume, open interest, and other indicators of LLDPE and PP, including the historical data from 2022 to 2026 [30][42] 3.3 Cost Side - The oil - based cost has increased significantly. Multiple charts show the prices of WTI crude oil, thermal coal, naphtha, propane, etc., as well as the cracking spread of gasoline, the price of P/N/C, the registered warehouse receipts of LPG, and other cost - related indicators [69][73] 3.4 Polyethylene Supply Side - **Raw Material Proportion**: The proportion of raw materials for PE production is 80.00% for oil - based, 12.00% for light hydrocarbon - based, 5.00% for coal - based, 2.00% for methanol, and 1.00% for purchased ethylene [127] - **Production Capacity and Output**: The planned domestic PE production capacity to be put into operation in 2026 is 520,000 tons. The capacity utilization rate, maintenance loss, output, and other indicators of PE are also presented through charts [131][132] 3.5 Polyethylene Inventory and Import - Export - **Inventory**: The coal - based inventory of PE has risen and then fallen. The report shows the inventory of production enterprises, two - oil enterprises, coal - based enterprises, and traders through charts [154][155] - **Import - Export**: The import sources, import volume, and import profit of LLDPE are presented through charts [158][160] 3.6 Polyethylene Demand Side - **Downstream Demand Proportion**: The downstream demand of LLDPE is mainly for packaging film (51.00%), followed by hollow (12.31%), pipes (11.65%), injection molding (10.00%), agricultural film (7.03%), drawing (4.51%), and wires and cables (3.50%) [165] - **Downstream Operating Rate and Inventory**: The downstream total operating rate, the available days of packaging film, the order days of agricultural film, the raw material inventory, and the finished product inventory of PE are presented through charts [174][177] 3.7 Polypropylene Supply Side - **Raw Material Proportion**: The proportion of raw materials for PP production is 53.00% for oil - based, 25.00% for PDH - based, 18.00% for coal - based, 2.00% for methanol, and 2.00% for purchased propylene [186] - **Production Capacity and Output**: The planned domestic PP production capacity to be put into operation in 2026 is 437,000 tons. The capacity utilization rate, maintenance loss, output, and other indicators of PP are also presented through charts [191][193] 3.8 Polypropylene Inventory and Import - Export - **Inventory**: The report shows the inventory of production enterprises, two - oil enterprises, coal - based enterprises, PDH - based enterprises, traders, and ports of PP through charts [203][206] - **Import - Export**: The import volume, import profit, export country composition, export volume, and export profit of PP are presented through charts [217][220] 3.9 Polypropylene Demand Side - **Downstream Demand Proportion**: The downstream demand of PP is mainly for drawing (34.00%), followed by high - and low - melt copolymer (24.00%), injection molding (17.00%), BOPP (6.00%), high - melt fiber (6.00%), transparent material (5.00%), pipes (hot and cold water) (5.00%), and CPP (3.00%) [225] - **Downstream Operating Rate and Inventory**: The downstream total operating rate, the operating rate of injection molding, pipes, and plastic weaving, as well as the raw material inventory and finished product inventory of plastic weaving and BOPP of PP are presented through charts [235][244]