Report Title - "PP Weekly Report 20250810: Lack of Contradiction, Prices Continue to Fluctuate" [1][2] Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Polypropylene is in a stage of fluctuating downward, and the later price center is expected to decline. The contract is pp2509. The Middle East conflict has caused slight fluctuations in energy, but from the fundamental perspective, over - supply will further intensify. In 2025, the device will be in operation throughout the year, and there will be intensive production in June and July, increasing production capacity pressure. At the same time, the supply is higher than the same period in previous years, and the demand situation is "normal" [3]. - Pay attention to the cost - end crude oil price and the inventory changes in the middle and lower reaches [3]. Summary According to the Directory 1. Basis and Spread - **Basis**: The spot price is basically stable, and the basis has slightly strengthened. The East China basis has strengthened by 30 to about - 40 yuan/ton, the North China basis has strengthened by 50 to about - 100 yuan/ton, and the South China basis has strengthened by 10 to about 0 yuan/ton. The non - standard basis shows a similar trend [15]. - **Regional Spread**: The North China - East China spread has a slight rebound, and the South China - East China spread remains at a low level [25]. - **Related Product Spread**: The spreads between injection molding - drawing and low - melt copolymer - drawing have strengthened [26]. - **Disk Spread**: The 9 - 1 month spread has further dropped to around - 31. The L - PP3 spread remains at around 220. The previous PP - V09 spread has rebounded and then dropped significantly, and has recently recovered. The L - PP spread has limited changes, mainly due to less driving force. Overall, the supply pressure of PP is greater, while L has more maintenance and reduced imports, and both are in the off - season in terms of demand. The MTO profit remains at a low level [44]. 2. Domestic Production - End Profit and Supply - **Production Profit**: - Oil - based PP: This week, the oil price has continued to decline, with Brent oil falling to around 66 US dollars/barrel. The oil - based PP profit has recovered compared with the previous period [71]. - PDH: Overseas supply from the Middle East and the United States will further increase, and domestic refineries are back in production, increasing supply pressure. The domestic spot price is under pressure, and the PDH profit is not good [71]. - CTO and MTO: With the arrival of the coal - using peak season, the coal price has rebounded, but the CTO profit remains at a high level. The methanol price at the origin has increased due to tight supply and demand, and the inland MTO profit has deteriorated [71]. - **Domestic Output and Load**: This week, the PP output is 77.71 tons (+ 0.38 tons), and the operating rate is 77.31% (+ 0.37%). The PP supply loss is 28.03 tons, including 15.86 tons of maintenance loss and 7.16 tons of load - reduction loss. The maintenance loss of the device has decreased this week [6][98]. - **Production Allocation Ratio**: The production allocation ratio of PP upstream devices is provided. An increase in the drawing production allocation may indicate that the standard product is stronger than the non - standard product in the short term, but the medium - term supply pressure may increase [122]. 3. US Dollar Price and Import - Export Profit - **US Dollar Price and Spread**: - **External US Dollar Price**: The prices in Northwest Europe have fallen from high levels, the prices in the US Gulf have remained stable, and the overall prices in Asia have declined. The CFR Far East price has remained stable, but the prices in Southeast Asia and South Asia have fallen significantly. - **Internal - External Spread**: The spread between CFR China and the external market has rebounded [127]. - **Import - Export Profit**: The domestic market is in a volatile consolidation. The export offer of production enterprises has remained stable, and the export sentiment is positive, with actual transactions at a discounted price. On the import side, it is difficult to open the import arbitrage window [144]. 4. Downstream开工 - This week, the comprehensive downstream operating rate has increased by 0.5% month - on - month, and most operating rates are improving. The operating rates of plastic weaving, PP non - woven fabrics, and BOPF have remained stable. Recently, due to the hot weather and subsidies from food delivery platforms, the demand for milk tea cups, cold drink cups, and lunch boxes has increased, which has significantly supported the daily injection molding and transparent PP industries, leading to an increase in their operating rates. The previous maintenance devices of modified PP and CPP have resumed operation, and with the support of a small number of new orders, the industry operating rates have increased month - on - month. With the arrival of the peak seasons of "Golden September and Silver October", the downstream operating rate will gradually increase [147]. 5. Inventory - Production enterprise inventory has increased by 2.23 tons to 2.23 tons. Among them, the inventory of Sinopec and PetroChina has increased by 1.44 tons, the coal - chemical inventory has increased by 0.56 tons, the PBI inventory has remained unchanged, and the local refinery inventory has increased by 0.24 tons. Downstream enterprises continue to make rigid purchases with average enthusiasm, while the supply has further increased, resulting in inventory accumulation at a high level [7][205]. - Trader inventory has increased by 1.4 tons, and the downstream transmission is not smooth; port inventory has decreased by 0.13 tons [7][205]. 6. Position, Trading Volume, and Warehouse Receipt Situation - **Position**: The position information of PP 09, 05, and 01 contracts is provided [220]. - **Trading Volume**: The trading volume information of PP 01, 09, and 05 contracts is provided [223][227][230]. - **Warehouse Receipt**: The number of registered PP warehouse receipts on August 8, 2025, is 17,191 [235][236].

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core Viewpoints - The current market trend of nickel and stainless steel is mixed. There is still negative feedback in the ferronickel link on the fundamental side, and the support from the new - energy link has loosened. Although the Sino - US trade tariff agreement has eased concerns about the demand digestion of terminal products, its impact on nickel and stainless - steel varieties is limited, and attention should be paid to the subsequent reaction of the varieties to market sentiment [3]. - There are both positive and negative factors in the market. Positive factors include the Sino - US trade tariff agreement, the Philippine government's plan to ban nickel ore exports in June 2025, the implementation of the new Indonesian resource tax on April 26th leading to an overall increase in cost, and the lower - than - expected US CPI data increasing the expectation of interest rate cuts. Negative factors include the gradual increase in ore supply at the end of the Philippine rainy season, the weakening support of the MHP nickel sulfate link, the continuous negative feedback in the stainless - steel industry with the cost support at the ferronickel end moving down, and the high inventory of stainless steel with no obvious improvement in demand [4]. 3. Key Points by Category 3.1. Price Forecast and Management Strategies - **Price Forecast**: The predicted price range of Shanghai nickel is 119,000 - 129,000 yuan/ton, with the current 20 - day rolling volatility at 32.75% and the historical percentile of the current volatility at 66.9% [2]. - **Inventory Management Strategy**: When the product sales price drops and there is a risk of inventory impairment, it is recommended to short Shanghai nickel futures according to the inventory level to lock in profits and hedge against the risk of spot price decline. The recommended hedging tool is the Shanghai nickel main contract with a selling hedging ratio of 60% and a strategy level of 2. Another option is to sell call options with a hedging ratio of 50% and a strategy level of 2 [2]. - **Procurement Management Strategy**: When the company has future production procurement needs and is worried about rising raw material prices, it is recommended to buy Shanghai nickel forward contracts according to the production plan to lock in production costs in advance. The recommended hedging tools include buying far - month Shanghai nickel contracts, selling put options, and buying out - of - the - money call options. The hedging ratio is based on the procurement plan, and the strategy level is 3 [2]. 3.2. Market Data - **Nickel Market Data**: The latest price of the Shanghai nickel main - continuous contract is 123,600 yuan/ton, a decrease of 1,630 yuan (- 1%); the trading volume is 137,729 lots, an increase of 1,166 lots (0.85%); the open interest is 63,702 lots, an increase of 625 lots (0.99%); the warehouse receipt quantity is 23,344 tons, a decrease of 205 tons (- 0.87%); the basis of the main contract is - 1,915 yuan/ton, a decrease of 145 yuan (- 7.0%) [6]. - **Stainless - Steel Market Data**: The latest price of the stainless - steel main - continuous contract is 12,995 yuan/ton, a decrease of 85 yuan (- 1%); the trading volume is 128,580 lots, a decrease of 14,329 lots (- 10.03%); the open interest is 127,690 lots, a decrease of 4,068 lots (- 3.09%); the warehouse receipt quantity is 158,715 tons, a decrease of 94 tons (- 0.06%); the basis of the main contract is 590 yuan/ton, an increase of 100 yuan (20.41%) [7]. 3.3. Inventory Data - **Nickel Industry Inventory**: The domestic social inventory of nickel is 44,088 tons, a decrease of 13 tons; the LME nickel inventory is 199,146 tons, an increase of 714 tons; the stainless - steel social inventory is 989.1 tons, an increase of 13.7 tons; the nickel pig iron inventory is 28,396.5 tons, an increase of 4,223 tons [8].