Report Industry Investment Rating - Not provided Report's Core View - As of the week of January 9th, after the New Year's Day holiday, the downstream PP operating rate decreased by 0.10 percentage points to 52.6%, at a relatively low level in the same period over the years. The operating rate of plastic weaving, the main downstream of drawstring PP, dropped by 0.22 percentage points to 42.92%, and orders continued to decline slightly, slightly lower than the same period last year. On January 13th, maintenance devices such as the second line of Jingbo Polyolefin restarted, and the operating rate of PP enterprises rose to around 81%, at a relatively low level, with the production ratio of standard drawstring PP remaining at around 27%. The inventory accumulation during the New Year's Day this year was not significant, and the current petrochemical inventory is at a neutral level in the same period over the years. On the cost side, due to recent events in the Middle East and Russia-Ukraine situation, the crude oil price rebounded slightly. In terms of supply, new production capacity was put into operation, and the number of maintenance devices decreased slightly. The downstream is entering the end of the peak season, orders continue to decline, and the market lacks large-scale centralized procurement, with limited support for the market. Although the macro environment is positive, the improvement in the supply-demand pattern of PP is limited, and the downstream order cycle is shortened. It is expected that the upside space for PP is limited. Due to new production capacity of plastics being put into operation recently and a higher operating rate compared to PP, combined with the gradual exit of the peak season for agricultural film, the L-PP price spread is expected to narrow [1]. Summary of Relevant Catalogs Market Analysis - As of the week of January 9th, the downstream PP operating rate decreased by 0.10 percentage points to 52.6%, at a relatively low level in the same period over the years. The operating rate of plastic weaving, the main downstream of drawstring PP, dropped by 0.22 percentage points to 42.92%, and orders continued to decline slightly, slightly lower than the same period last year. On January 13th, maintenance devices such as the second line of Jingbo Polyolefin restarted, and the operating rate of PP enterprises rose to around 81%, at a relatively low level, with the production ratio of standard drawstring PP remaining at around 27%. The inventory accumulation during the New Year's Day this year was not significant, and the current petrochemical inventory is at a neutral level in the same period over the years. On the cost side, due to recent events in the Middle East and Russia-Ukraine situation, the crude oil price rebounded slightly. New production capacity of 400,000 tons/year of PetroChina Guangxi Petrochemical was put into operation in mid-October, and the number of maintenance devices decreased slightly. The downstream is entering the end of the peak season, orders continue to decline, and the market lacks large-scale centralized procurement, with limited support for the market. Although the macro environment is positive, the improvement in the supply-demand pattern of PP is limited, and the downstream order cycle is shortened. It is expected that the upside space for PP is limited. Due to new production capacity of plastics being put into operation recently and a higher operating rate compared to PP, combined with the gradual exit of the peak season for agricultural film, the L-PP price spread is expected to narrow [1]. Futures and Spot Market Quotes - Futures: The PP2605 contract fluctuated with reduced positions, with a minimum price of 6,456 yuan/ton, a maximum price of 6,532 yuan/ton, and finally closed at 6,484 yuan/ton, above the 20-day moving average, with a gain of 0.31%. The open interest decreased by 8,586 lots to 511,792 lots [2]. - Spot: The spot prices of PP in various regions partially increased. The drawstring PP was quoted at 6,120 - 6,680 yuan/ton [3]. Fundamental Tracking - Supply: On January 13th, maintenance devices such as the second line of Jingbo Polyolefin restarted, and the operating rate of PP enterprises rose to around 81%, at a relatively low level, with the production ratio of standard drawstring PP remaining at around 27% [4]. - Demand: As of the week of January 9th, after the New Year's Day holiday, the downstream PP operating rate decreased by 0.10 percentage points to 52.6%, at a relatively low level in the same period over the years. The operating rate of plastic weaving, the main downstream of drawstring PP, dropped by 0.22 percentage points to 42.92%, and orders continued to decline slightly, slightly lower than the same period last year [4]. - Inventory: The petrochemical morning inventory on Tuesday decreased by 10,000 tons to 590,000 tons, 10,000 tons higher than the same period last year. The inventory accumulation during the New Year's Day this year was not significant, and the current petrochemical inventory is at a neutral level in the same period over the years [4]. Raw Material End - Crude oil: The Brent crude oil 03 contract rose to $64 per barrel, and the CFR propylene price in China remained flat at $750 per ton [6].

1. Report Industry Investment Rating - Not provided 2. Core Viewpoints - On January 8, new maintenance devices were added, causing the plastic operating rate to drop to around 87%, currently at a neutral level. The overall PE downstream operating rate remains at a relatively low level compared to the same period in recent years. Although the macro - atmosphere is warm, the improvement in the plastic supply - demand pattern is limited, so the recent upward space for plastics is expected to be limited. Due to new production capacity coming on - stream and the gradual exit of the agricultural film peak season, the L - PP spread is expected to decline [1]. 3. Summary by Relevant Catalogs 3.1 Market Analysis - New maintenance devices were added on January 8, and the plastic operating rate decreased to around 87%. As of the week ending January 2, the PE downstream operating rate dropped 0.68 percentage points to 41.15% week - on - week. The agricultural film is gradually exiting the peak season, with orders continuing to decline. The overall PE downstream operating rate is at a relatively low level in recent years. The new year's inventory accumulation was not significant, and the petrochemical inventory is at a neutral level. Crude oil prices are still weak. There are new plastic production capacities coming on - stream, the downstream operating rate is expected to decline, and downstream enterprises have low purchasing willingness. Although the macro - atmosphere is warm, the plastic supply - demand pattern improvement is limited, and the L - PP spread is expected to fall [1]. 3.2 Futures and Spot Market Conditions 3.2.1 Futures - The plastic 2605 contract decreased in positions and fluctuated. The lowest price was 6605 yuan/ton, the highest was 6720 yuan/ton, and it finally closed at 6628 yuan/ton, below the 60 - day moving average, with a gain of 0.05%. The position volume decreased by 379 lots to 505,299 lots [2]. 3.2.2 Spot - The PE spot market was mostly stable, with price fluctuations between - 100 and + 100 yuan/ton. LLDPE was reported at 6400 - 6670 yuan/ton, LDPE at 8550 - 9010 yuan/ton, and HDPE at 6700 - 8290 yuan/ton [3]. 3.3 Fundamental Tracking 3.3.1 Supply - On January 8, new maintenance devices were added, and the plastic operating rate dropped to around 87%, currently at a neutral level [1][4]. 3.3.2 Demand - As of the week ending January 2, the PE downstream operating rate dropped 0.68 percentage points to 41.15% week - on - week. The agricultural film is gradually exiting the peak season, with orders continuing to decline. The packaging film orders increased slightly, and the overall PE downstream operating rate is at a relatively low level in recent years [1][4]. 3.3.3 Inventory - On Thursday, the petrochemical early - morning inventory decreased by 3.5 tons to 57.5 tons week - on - week, the same as the same period last year. The new year's inventory accumulation was not significant, and the petrochemical inventory is at a neutral level in recent years [1][4]. 3.3.4 Raw Materials - The Brent crude oil 03 contract dropped to $60/barrel. The Northeast Asian ethylene price remained flat week - on - week at $725/ton, and the Southeast Asian ethylene price also remained flat at $745/ton [4].