1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - For plastics, the supply is under pressure, the market may continue to seek a bottom weakly. With the restart of devices and the increase in domestic and foreign supplies, while the demand side has insufficient restocking power and high inventory, the fundamentals have no upward driving force, so the previous short positions should be held, and short - selling on the short - term single side is not recommended [4]. - For PP, the weak fundamentals remain unchanged, and it will run weakly following the cost side. With high inventory, increasing supply, and weakening demand, there is a high de - stocking pressure in the future [9]. 3. Summary According to Relevant Catalogs 3.1 Plastic and PP Market Review - **Plastic**: This week, plastics opened high and closed low, with two consecutive negative weekly lines. It opened 16 points higher at 6915 on Monday, reached a weekly high of 6939, then fell unilaterally to a weekly low of 6745 on Thursday morning, and finally closed at 6802, down 97 points or 1.4% from last week's closing. The weekly amplitude was 194 points [3][13]. - **PP**: This week, PP also opened high and closed low, with two consecutive negative weekly lines. It opened 10 points higher at 6600 on Monday, reached a weekly high of 6629, then fell unilaterally to a weekly low of 6415 on Thursday morning, and finally closed at 6464, down 126 points or 1.9% from last week's closing. The weekly amplitude was 214 points [8][16]. 3.2 Valuation - For plastics, the basis and monthly spread are running weakly, and the single is at a year - on - year high. The oil - based valuation is at a medium level, and LLDPE is at a medium position in the same period [19][26][28]. - For PP, the valuation is moderately high [34]. 3.3 Production Capacity and Supply - **Production Capacity**: In 2025, the planned PE production capacity is 613 tons (year - on - year + 17%), with 463 tons already put into production from January to October and 120 tons remaining. The planned PP production capacity is 511 tons (year - on - year + 11%), with 456 tons already put into production from January to October and 45 tons remaining. In 2026, it is still in a high - production - capacity cycle, and the probability of PP device delay is relatively high, so the opportunity to shrink LP05 can be concerned [35]. - **Supply**: In November, the start - up rate shows an upward trend. The domestic polyethylene supply is increasing, with some devices planned to restart and new devices continuously ramping up production. This week, the PE output is 66 tons, with a capacity utilization rate of 83%. Since mid - September, the output has rebounded from a low level. The PP output this week is 80 tons, with a capacity utilization rate of 78%, and it is expected to continue to increase next week [36][38][46]. 3.4 Import and Export - **PE**: From January to September 2025, the cumulative import volume is 1000 tons (year - on - year - 1.8%), and the import volume in September is 102 tons (year - on - year - 10%, month - on - month + 8%). The export volumes in October and November are expected to be 110 and 116 tons respectively [41]. - **PP**: From January to September 2025, the cumulative import volume is 246 tons (year - on - year - 9%), and the import volume in September is 29 tons (year - on - year - 3%, month - on - month + 17%). The cumulative export volume is 234 tons (year - on - year + 28%), and the export volume in September is 24 tons (year - on - year + 22%, month - on - month - 14%) [49][52]. 3.5 Demand - **PE**: This week, the downstream capacity utilization rate of PE is 45%, showing a continuous two - week decline. From January to September 2025, the apparent consumption of PE is 3358 tons (cumulative year - on - year + 11%) [55]. - **PP**: This week, the downstream start - up rate of PP is 53%, showing a continuous three - week increase. From January to September 2025, the apparent consumption of PP is 2981 tons (year - on - year + 13%), with a year - on - year increase of 12% in September [58]. - **Plastic Products**: From January to September 2025, the cumulative export value of plastic and products is 831 billion US dollars (year - on - year + 1.2%), and the export value in September is 119 billion US dollars (year - on - year + 5.1%) [60]. 3.6 Inventory - **Upstream Inventory**: As of November 7, the polyolefin petrochemical inventory of the two major oil companies is 66.5 tons (month - on - month - 2.5, year - on - year + 1%). This week, the PE enterprise inventory is 49 tons (week - on - week + 7.4), reaching a high level in the same period of previous years, and the PP enterprise inventory is 60 tons (week - on - week + 0.5), showing a slight inventory accumulation [63]. - **Social Inventory**: This week, the PE social inventory is 51 tons (week - on - week - 2), with different performances among varieties. The PP trader inventory is 23 tons (week - on - week + 1.5), remaining at a high level in the same period [66]. 3.7 Strategies - **Plastic**: For the single - side strategy, due to weak fundamentals, hold short positions, and focus on the range of [6700 - 6900] for L2601. For the arbitrage strategy, hold the long LP01 arbitrage. For the hedging strategy, industrial customers can choose the opportunity to sell - hedge [5][7]. - **PP**: For the single - side strategy, due to weak supply and demand, hold short positions, and focus on the range of [6400 - 6600] for PP2601. For the arbitrage strategy, short the MTO (05) profit when the price is high. For the hedging strategy, upstream and traders can sell - hedge when the price is high [10].

Report Summary 1. Report Industry Investment Rating No information provided in the report. 2. Core Views - The supply-demand drive for plastics is weak, and inventory reduction is difficult to sustain. In November, new production capacity from Guangxi Petrochemical will be released, and supply is expected to increase seasonally. Demand is insufficient compared to the growth rate, and it's hard to form a positive restocking cycle. Consider the long - term high - production cycle of plastics and the risk of a downward shift in the oil price center. Look for opportunities to short on rebounds due to improved macro sentiment or escalated geopolitical conflicts [4]. - The inventory pressure in the PP industry chain is at a high level, and cost support is insufficient. After the National Day, inventory accumulation in the industry chain exceeded expectations, and recent inventory reduction has been slow. In November, the supply pattern will remain loose, and the seasonal peak demand effect is gradually fading. The profit still has room to compress [8]. 3. Summary by Directory 3.1 Market Review - **Plastics**: This month, plastics opened low and trended lower, with three consecutive negative monthly lines. The price fluctuated between 6830 and 7145, with an amplitude of 315 points [3][13]. - **PP**: This month, PP also opened low and trended lower, with three consecutive negative monthly lines. The price fluctuated between 6530 and 6805, with an amplitude of 275 points [7][16]. 3.2 Valuation - For plastics, the basis, monthly spread are weakly running, and the warehouse receipts are at a high level compared to the same period. LLDPE weighted oil gross profit is neutral year - on - year, and the weighted gross profit is at a neutral position in the same period [17][24][26]. - For PP, the profit is moderately high, and the spot price has fallen below the 6000 mark, with insufficient cost support [32][33]. 3.3 Supply - In November, the PE start - up rate has a seasonal upward trend, while the PP start - up rate may remain stable due to insufficient maintenance plans [36][38]. 3.4 Demand - In November, the downstream start - up rate of PE may weaken seasonally, but the start - up rate of agricultural film is seasonally rising. The downstream start - up rate of PP may remain stable [40][42][43]. - From January to September 2025, the apparent consumption of PE was 3358 million tons (cumulative year - on - year +11%), and that of PP was 2981 million tons (year - on - year +13%, with a +12% increase in September) [41][45]. 3.5 Import and Export - From January to September 2025, the import volume was 1000 million tons (year - on - year - 1.8%). In September, the import volume was 102 million tons (year - on - year - 10%, month - on - month +8%). The expected export volumes in October and November are 110 and 116 million tons respectively. - From January to September 2025, the export volume was 83 million tons (year - on - year +30%). In September, the export volume was 10 million tons (year - on - year +64%, month - on - month - 14%). The expected export volumes in October and November are 9.5 and 9.4 million tons respectively. - The import and export of PP are basically balanced, and the current export profit margin has narrowed [48][51][52]. 3.6 Inventory - PE enterprise inventory has significantly decreased, while PP enterprise inventory remains at a high level compared to the same period. Social inventory is being reduced slowly, and the overall inventory is at a relatively high level compared to the same period. The downstream raw material inventory has reached a high level compared to the same period [56][58][60]. 3.7 Strategy - **Plastics**: Short on rebounds. Focus on the range of [6800 - 7100] for L2601. Hold the long LP01 arbitrage. Industrial customers can sell - hedge at an appropriate time due to the low basis [6]. - **PP**: Short on rebounds. Focus on the range of [6450 - 6750] for PP2601. Short MTO (01) at high prices. Industrial customers can sell - hedge at an appropriate time due to the low basis [10]. 3.8 Production Capacity Plan - In 2025, the planned PE production capacity is 613 million tons (year - on - year +17%), with 463 million tons already put into production from January to October, and 120 million tons remaining to be put into production. The planned PP production capacity is 511 million tons (year - on - year +11%), with 456 million tons already put into production from January to October, and 45 million tons remaining to be put into production. - In 2026, the industry is still in a high - production cycle. The probability of PP device delays is relatively high, and opportunities to short the LP05 spread can be considered [35].