Core Insights - The PP downstream operating rate has increased by 0.50 percentage points to 48.9%, which is still low compared to historical levels [1] - The operating rate for plastic weaving remains stable at 41.1%, with a slight decrease in orders, slightly higher than the same period in the previous two years [1] - The overall PP industry is experiencing a lack of significant policy changes, leading to minimal fluctuations in the current market [1] Supply and Demand Analysis - The operating rate of PP enterprises is maintained at around 84.5%, indicating a neutral market condition [1] - Recent maintenance activities have been minimal, and the production ratio for standard filament remains steady at approximately 30% [1] - Inventory levels are high compared to recent years, with general destocking in the petrochemical sector [1] Cost Factors - Unexpected U.S. non-farm employment data and OPEC+ production increases of 548,000 barrels per day in September are influencing cost dynamics [1] - The potential for a ceasefire in the Russia-Ukraine conflict and adjustments by EIA and IEA regarding global oil surplus have contributed to a decline in crude oil prices [1] Market Outlook - The upcoming rainy and hot season is expected to slow down downstream recovery, with plastic weaving operating rates remaining stable and new orders being limited [1] - The current market is characterized by high inventory pressure and a focus on just-in-time purchasing [1] - The PP industry is anticipated to experience a period of fluctuation, with a recommendation for a 09 - 01 reverse spread strategy [1]

Core Viewpoint - The PVC market is experiencing stable upstream calcium carbide prices, with a slight increase in PVC operating rates, but overall demand remains cautious and below historical levels [1] Supply Side - Calcium carbide prices are stable across most regions - PVC operating rate increased by 0.05 percentage points to 76.84%, still at a high level compared to previous years [1] Demand Side - Downstream operating rates for PVC have not changed significantly and remain low compared to previous years - India's BIS policy has been postponed for another six months until December 24, 2025, while Taiwan's Formosa Plastics lowered its August prices by $10 to $35 per ton - Recent export orders have been underwhelming, but India's delay in announcing anti-dumping duties until September 25 may stimulate Chinese PVC exports [1] Inventory - Social inventory has continued to increase and remains at a high level, indicating significant inventory pressure [1] Real Estate Sector - The real estate sector is undergoing adjustments, with significant year-on-year declines in investment, new starts, and completion areas from January to June 2025 - The weekly transaction area of commercial housing in 30 major cities has seen a slight increase but is at the lowest level for the same period in previous years, indicating that improvements in real estate will take time [1] Industry Profitability - Chlor-alkali comprehensive profits have shown some recovery, with PVC operating rates remaining stable but still under pressure - New capacities from companies like Wanhua Chemical and Tianjin Bohua have begun trial production, while calcium carbide prices are weakly supporting PVC [1] Policy Environment - There are currently no significant policies affecting the PVC industry, with most old facilities undergoing technical upgrades - Macro policies regarding anti-competition and the elimination of outdated facilities may impact future market conditions [1] Market Outlook - The recent rise in coking coal prices supports the PVC market, but the fundamental pressures on PVC remain significant - A downward trend is expected, with a recommendation for a 09 - 01 reverse spread operation [1]

1. Report Industry Investment Rating - The investment rating for the plastics industry is "Oscillating Upward" [1] 2. Core View of the Report - The plastics market is expected to experience a strong oscillation in the near future. It is recommended to switch to buying on dips or engage in a 09 - 01 reverse spread strategy. This is due to factors such as the restart of previously shut - down production facilities, the impact of coal price increases on costs, the current situation of downstream demand, and positive market sentiment driven by government policies [1] 3. Summary by Relevant Catalogs Strategy Analysis - On July 22, the restart of maintenance devices in Zhejiang Petrochemical Phase II LDPE and Shanghai SECCO HDPE led to the plastics operating rate rising to around 87%, currently at a neutral level. The downstream PE operating rate increased by 0.64 percentage points to 38.51% week - on - week. Although the agricultural film is in the off - season with a slight decrease in orders, packaging film orders increased slightly. The overall downstream PE operating rate is still at a relatively low level in recent years. The de - stocking speed of petrochemicals was slow last week, and petrochemical inventory is at a relatively high level in recent years. Due to coal production inspections, coal prices have risen significantly. With new production capacity coming on - stream and the restart of maintenance devices, and considering government policies, it is recommended to buy on dips or engage in a 09 - 01 reverse spread [1] Futures and Spot Market Conditions - **Futures**: The plastics 2509 contract reduced positions and oscillated upward, with a low of 7264 yuan/ton, a high of 7373 yuan/ton, and a final closing price of 7368 yuan/ton, above the 60 - day moving average, up 1.26%. The open interest decreased by 13,406 lots to 394,148 lots [2] - **Spot**: Most of the PE spot market prices rose, with price changes ranging from - 50 to + 50 yuan/ton. LLDPE was reported at 7130 - 7440 yuan/ton, LDPE at 9240 - 9630 yuan/ton, and HDPE at 7660 - 8220 yuan/ton [3] Fundamental Tracking - **Supply**: On July 18, there were few changes in maintenance devices, and the plastics operating rate remained at around 84%, currently at a neutral level [4] - **Demand**: As of the week of July 18, the downstream PE operating rate increased by 0.64 percentage points to 38.51% week - on - week. The agricultural film is in the off - season, with a slight decrease in orders, while packaging film orders increased slightly. The overall downstream PE operating rate is still at a relatively low level in recent years [4] - **Inventory**: Petrochemical early - morning inventory on Tuesday decreased by 30,000 tons to 790,000 tons compared to the previous day, 25,000 tons higher than the same period last year. The de - stocking speed of petrochemicals was slow last week, and petrochemical inventory is at a relatively high level in recent years [4] - **Raw Materials**: The Brent crude oil 09 contract fell to $68/barrel. The price of Northeast Asian ethylene remained flat at $830/ton week - on - week, and the price of Southeast Asian ethylene also remained flat at $820/ton [4]