Report Industry Investment Rating - Not provided Core Viewpoints - The PP market is oscillating downward, with limited improvement in the supply - demand pattern, but there are still expectations for the chemical industry to counter the involution. Attention should be paid to the resumption of production progress of downstream enterprises after the Spring Festival. Also, continue to shrink the L - PP spread [1] Summary by Related Catalogs Market Analysis - As of the week of February 27, the downstream PP operating rate decreased by 5.04 percentage points to 36.74% compared with before the Spring Festival. Currently, downstream enterprises have not fully resumed work, showing a seasonal change. On February 27, the number of maintenance devices changed little, the PP enterprise operating rate remained at about 80%, at a moderately low level, and the production ratio of standard - grade drawstring remained at about 25%. During the Spring Festival, petrochemical inventory increased by 480,000 tons to 940,000 tons. On Friday, the early petrochemical inventory was flat compared with the previous day at 870,000 tons, 40,000 tons lower than the same period last lunar year, and is currently at a neutral level in recent years. The cost side is affected by the uncertainty of the Middle - East situation, and crude oil prices fluctuate greatly. There has been a slight increase in maintenance devices recently. The spot market has rigid - demand transactions, and is in a state of cautious waiting. The supply - demand pattern of PP has limited improvement, but there are still expectations for the chemical industry to counter the involution [1] Futures and Spot Market - Futures: The PP2605 contract decreased in position and oscillated downward, with a minimum price of 6,554 yuan/ton, a maximum price of 6,658 yuan/ton, and finally closed at 6,611 yuan/ton, below the 20 - day moving average, with a decline of 1.77%. The position volume decreased by 16,989 lots to 490,473 lots [2] - Spot: Most spot prices of PP in various regions declined. The drawstring was reported at 6,290 - 6,760 yuan/ton [3] Fundamental Tracking - Supply: On February 27, the number of maintenance devices changed little, the PP enterprise operating rate remained at about 80%, at a moderately low level, and the production ratio of standard - grade drawstring remained at about 25% [6] - Demand: As of the week of February 27, the downstream PP operating rate decreased by 5.04 percentage points to 36.74% compared with before the Spring Festival. Currently, downstream enterprises have not fully resumed work, showing a seasonal change [6] - Inventory: During the Spring Festival, petrochemical inventory increased by 480,000 tons to 940,000 tons. On Friday, the early petrochemical inventory was flat compared with the previous day at 870,000 tons, 40,000 tons lower than the same period last lunar year, and is currently at a neutral level in recent years [1][6] Raw Material End - The Brent crude oil 05 contract rose above $71 per barrel, and the CFR propylene price in China remained flat at $835 per ton [7]

Report Industry Investment Rating - Not provided Core Viewpoints - Plastic supply and demand pattern improves limitedly, but there are still expectations for the chemical industry to counter the involution. The upstream petrochemical inventory is low, and the basis has been repaired. Due to the long Spring Festival holiday, the risk of unilateral positions is high, so it is recommended to hold no positions for the holiday. Since there is new plastic production capacity put into operation recently, the operating rate is higher than that of PP, and the concentrated demand for plastic film has not started yet, it is advisable to hold a light - position short L - PP spread [1]. Summary by Relevant Catalogs Market Analysis - On February 12, the number of overhauled devices changed little, and the plastic operating rate remained at around 92%, which is at a moderately high level. As of the week of February 6, the downstream operating rate of PE decreased by 4.03 percentage points to 33.73% week - on - week. Entering the Spring Festival holiday, orders and raw material inventory of agricultural film continued to decrease, and packaging film orders also decreased. The overall downstream operating rate of PE declined seasonally. Petrochemical de - stocking in February was acceptable, and the current petrochemical inventory is at a low level in recent years. The cost of crude oil rebounded due to market concerns about military conflicts between the US and Iran. New plastic production capacities were put into operation in January 2026. The plastic operating rate increased slightly recently. The concentrated demand for plastic film has not started yet, and it is expected that the downstream operating rate will continue to decline [1]. Futures and Spot Market Quotes - **Futures**: The plastic 2605 contract opened higher, then decreased in position and oscillated downward. The lowest price was 6732 yuan/ton, the highest was 6834 yuan/ton, and it finally closed at 6734 yuan/ton, above the 60 - day moving average, with a decline of 0.72%. The position decreased by 2602 lots to 501315 lots [2]. - **Spot**: Some prices in the PE spot market declined, with the price change ranging from - 100 to + 0 yuan/ton. LLDPE was quoted at 6600 - 7020 yuan/ton, LDPE at 8280 - 8960 yuan/ton, and HDPE at 6760 - 7990 yuan/ton [3]. Fundamental Tracking - **Supply**: On February 12, the number of overhauled devices changed little, and the plastic operating rate remained at around 92%, at a moderately high level [4]. - **Demand**: As of the week of February 6, the downstream operating rate of PE decreased by 4.03 percentage points to 33.73% week - on - week. Entering the Spring Festival holiday, orders and raw material inventory of agricultural film continued to decrease, and packaging film orders also decreased. The overall downstream operating rate of PE declined seasonally [4]. - **Inventory**: On Thursday, the petrochemical early - morning inventory decreased by 20,000 tons to 440,000 tons week - on - week, 25,000 tons lower than the same period of last lunar year. Petrochemical de - stocking was acceptable, and the current petrochemical inventory is at a low level in recent years [4]. - **Raw Materials**: The Brent crude oil 04 contract rose above $69 per barrel. The price of Northeast Asian ethylene remained flat at $695 per ton week - on - week, and the price of Southeast Asian ethylene remained flat at $675 per ton week - on - week [4].

1. Report Industry Investment Rating - Not provided 2. Core Viewpoints - The improvement of the PP supply - demand pattern is limited, but there are still expectations for the chemical industry to counter the involution. The upstream petrochemical inventory is low, and the basis has been repaired. Due to the long Spring Festival holiday, the risk of unilateral positions is high, so it is recommended to hold no unilateral positions during the holiday. It is advisable to hold a light - position short position on the L - PP spread as plastic has new production capacity put into operation recently, its operating rate is higher than that of PP, and the centralized demand for mulch film has not started yet [1] 3. Summary by Relevant Catalogs 3.1 Market Analysis - As of the week of February 6, the downstream operating rate of PP decreased by 2.24 percentage points to 49.84% week - on - week, at a neutral level in the same lunar period over the years. The operating rate of the plastic weaving industry, the main downstream of the drawstring, decreased by 5.30 percentage points to 36.74% week - on - week, and the plastic weaving orders continued to decline, slightly lower than the same period last year. On February 12, there were little changes in the maintenance devices, the operating rate of PP enterprises remained at around 82.5%, at a moderately low level, and the production ratio of the standard drawstring decreased to around 28%. Petrochemical destocking in February was okay, and the current petrochemical inventory is at a relatively low level in the same period in recent years. The cost of crude oil rebounded due to market concerns about a potential military conflict between the US and Iran. The number of maintenance devices decreased slightly recently. The price of BOPP film in some downstream areas was stable, the operating rate of the downstream plastic weaving industry decreased, new orders were limited, and more terminal enterprises stopped work for the Spring Festival holiday, with downstream stocking mostly completed [1] 3.2 Futures and Spot Market Conditions 3.2.1 Futures - The PP2605 contract opened higher, then decreased in positions and oscillated downward. The lowest price was 6648 yuan/ton, the highest was 6730 yuan/ton, and it finally closed at 6648 yuan/ton, below the 20 - day moving average, with a decline of 0.73%. The position volume decreased by 7495 lots to 479342 lots [2] 3.2.2 Spot - The spot prices of PP in most regions were stable. The drawstring was quoted at 6340 - 6880 yuan/ton [3] 3.3 Fundamental Tracking - Supply: On February 12, there were little changes in the maintenance devices, the operating rate of PP enterprises remained at around 82.5%, at a moderately low level, and the production ratio of the standard drawstring decreased to around 28% [4] - Demand: As of the week of February 6, the downstream operating rate of PP decreased by 2.24 percentage points to 49.84% week - on - week, at a neutral level in the same lunar period over the years. The operating rate of the plastic weaving industry, the main downstream of the drawstring, decreased by 5.30 percentage points to 36.74% week - on - week, and the plastic weaving orders continued to decline, slightly lower than the same period last year [4] - Inventory: On Thursday, the early petrochemical inventory decreased by 20,000 tons to 440,000 tons week - on - week, 25,000 tons lower than the same lunar period last year. Petrochemical destocking was okay, and the current petrochemical inventory is at a relatively low level in the same period in recent years [4] - Raw materials: The Brent crude oil contract 04 rose above $69 per barrel, and the CFR propylene price in China increased by $5 per ton to $830 per ton week - on - week [4]

1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - PP valuation repair is limited, and the L - PP spread is under pressure [1] 3. Summary of Each Section 3.1 Fundamental Tracking - **Futures Data**: PP2605 had a closing price of 6801 with a daily increase of 1.05%, trading volume of 458,481 and an increase in open interest of 11,151 [1] - **Basis and Spread Changes**: The 05 - contract basis was -151 (compared to -150 the previous day), and the 05 - 09 contract spread was -31 (compared to -27 the previous day) [1] - **Spot Prices**: The spot prices of North China, East China, and South China were 6,580 yuan/ton, 6,650 yuan/ton, and 6,770 yuan/ton respectively, showing an increase from the previous day [1] 3.2 Spot News - The futures market fluctuated strongly, upstream pre - sale pressure was not significant, the basis was weakly stable, and the trading atmosphere was average [1] - Downstream demand at the end of the year was unlikely to provide continuous elasticity, the sustainability of buying was questionable, and warehouse receipts remained at a high level [1] - The PP US - dollar market price was weakening, overseas suppliers' enthusiasm for offering prices to China was low, and export trading was difficult to improve due to the strengthening exchange rate and rising domestic market [1] 3.3 Market Condition Analysis - **Cost Side**: Crude oil and propane prices rebounded and stabilized, and there was a valuation differentiation within olefins, with the internal and upstream profit - end valuations of PE higher than those of PP [2] - **Supply Side**: There was no new production before the 2605 contract, and the game between existing supply and demand intensified [2] - **Demand Side**: Downstream new orders followed up with rigid demand, and the overall fundamental support at the end of the year was limited. PDH profit at the cost side remained at a low level, with multiple PDH units in South China having maintenance expectations and one PP unit in Northern Jiangsu planning to restart. Attention should be paid to the marginal changes of PDH units under deep PDH profit losses [2] 3.4 Trend Intensity - The PP trend intensity was 0 [3]

1. Report Industry Investment Rating - Not provided 2. Core View of the Report - On January 30, 2026, the restart of the maintenance devices such as Maoming Petrochemical's HDPE led to a rise in the plastics operating rate to around 90%, which is at a neutral level. The downstream operating rate of PE decreased by 1.77 percentage points to 37.76%. The petrochemical inventory is at a relatively low level in the same period in recent years. Driven by low valuation, cold weather and the geopolitical situation in Iran, the plastics market will fluctuate strongly in the short - term. However, the improvement of the supply - demand pattern is limited, so the sustainability of the rebound should be treated with caution. It is expected that the L - PP spread will decline [1]. 3. Summary by Relevant Catalogs 3.1 Market Analysis - The restart of Maoming Petrochemical's HDPE and other maintenance devices on January 30 increased the plastics operating rate to around 90%, at a neutral level. The downstream operating rate of PE decreased, and the petrochemical inventory is at a low level in the same period in recent years. The increase in crude oil prices is due to cold - driven diesel heating demand and the geopolitical situation in Iran. New production capacities of plastics were put into operation in January 2026. The downstream demand is expected to continue to decline, and the L - PP spread is expected to fall [1]. 3.2 Futures and Spot Market Conditions Futures - The plastics 2605 contract fluctuated with a decrease in positions. The lowest price was 6945 yuan/ton, the highest was 7139 yuan/ton, and it closed at 7014 yuan/ton, up 0.17%. The position volume decreased by 9081 lots to 503743 lots [2]. Spot - The PE spot market showed mixed trends, with price changes ranging from -50 to +100 yuan/ton. LLDPE was reported at 6820 - 7170 yuan/ton, LDPE at 8600 - 9280 yuan/ton, and HDPE at 6870 - 8190 yuan/ton [3]. 3.3 Fundamental Tracking - Supply: On January 30, the plastics operating rate rose to around 90% after the restart of Maoming Petrochemical's HDPE and other maintenance devices, at a neutral level [4]. - Demand: As of the week of January 30, the downstream operating rate of PE decreased by 1.77 percentage points to 37.76%. Orders and raw material inventory of agricultural films and packaging films decreased slightly, and the overall downstream operating rate of PE is at a relatively low level in the same lunar period in recent years [4]. - Inventory: The petrochemical early - morning inventory on Friday decreased by 30,000 tons to 445,000 tons, 115,000 tons lower than the same lunar period last year. The petrochemical inventory is at a relatively low level in the same period in recent years [4]. - Raw Materials: The Brent crude oil 03 contract rose above $69/barrel, and the prices of Northeast Asian and Southeast Asian ethylene remained flat at $700/ton and $685/ton respectively [4].

Report Industry Investment Rating - Not provided Core Viewpoints - On January 29, 2026, the number of overhauled plastic production units changed little, with the plastic operating rate remaining at around 89%, a neutral level. As of the week ending January 23, the downstream PE operating rate dropped 1.4 percentage points to 39.53% week-on-week. The overall downstream PE operating rate was still at a relatively low level compared to the same lunar period in previous years. Near the end of the month, petrochemical inventory was being depleted rapidly and was at a relatively low level compared to the same period in previous years. Cold weather increased the demand for diesel for heating, alleviating demand concerns, and the escalating geopolitical situation in Iran led to a rise in crude oil prices. New production capacities were put into operation in January 2026. Recently, the plastic operating rate has slightly declined. The concentrated demand for plastic mulch has not yet started, and with the temperature dropping, terminal construction has slowed down, leading to reduced demand in the north. Some industries have entered the off - season, and it is expected that the downstream operating rate will decline. With low valuations, cold weather, and the Iran geopolitical situation, the sentiment in the chemical sector has improved, and plastics are expected to fluctuate strongly in the short term. However, the improvement in the plastics supply - demand pattern is limited, and the sustainability of the plastics rebound should be treated with caution. It is expected that the L - PP spread will narrow [1]. Summary by Directory Market Analysis - On January 29, the plastic operating rate remained at around 89%, a neutral level. As of the week ending January 23, the downstream PE operating rate dropped 1.4 percentage points to 39.53% week - on - week. The overall downstream PE operating rate was at a relatively low level compared to the same lunar period in previous years. Near the end of the month, petrochemical inventory was being depleted rapidly and was at a relatively low level compared to the same period in previous years. Cold weather and the Iran geopolitical situation led to a rise in crude oil prices. New production capacities were put into operation in January 2026. Recently, the plastic operating rate has slightly declined. The concentrated demand for plastic mulch has not yet started, and with the temperature dropping, terminal construction has slowed down, leading to reduced demand in the north. Some industries have entered the off - season, and it is expected that the downstream operating rate will decline. With low valuations, cold weather, and the Iran geopolitical situation, the plastics market is expected to fluctuate strongly in the short term, but the sustainability of the rebound should be treated with caution. It is expected that the L - PP spread will narrow [1] Futures and Spot Market Conditions - Futures: The plastic 2605 contract fluctuated upwards with reduced positions. The lowest price was 6956 yuan/ton, the highest was 7084 yuan/ton, and it finally closed at 7049 yuan/ton, above the 60 - day moving average, with a gain of 1.42%. The open interest decreased by 18370 lots to 512824 lots [2] - Spot: Most prices in the PE spot market rose, with price changes ranging from - 50 to + 100 yuan/ton. LLDPE was priced at 6820 - 7170 yuan/ton, LDPE at 8600 - 9280 yuan/ton, and HDPE at 6870 - 8190 yuan/ton [3] Fundamental Tracking - Supply: On January 29, the number of overhauled units changed little, and the plastic operating rate remained at around 89%, a neutral level [1][4] - Demand: As of the week ending January 23, the downstream PE operating rate dropped 1.4 percentage points to 39.53% week - on - week. The overall downstream PE operating rate was at a relatively low level compared to the same lunar period in previous years [1][4] - Inventory: On Thursday, the petrochemical early - morning inventory increased by 2.5 tons week - on - week to 47.5 tons, 8.5 tons lower than the same lunar period last year. Near the end of the month, petrochemical inventory was being depleted rapidly and was at a relatively low level compared to the same period in previous years [1][4] - Raw Materials: The Brent crude oil 03 contract rose above $69/barrel. The Northeast Asian ethylene price remained flat at $700/ton week - on - week, and the Southeast Asian ethylene price remained flat at $685/ton week - on - week [4]

Report Industry Investment Rating - Not provided Core Viewpoints - Low valuation, cold weather, and the Iran geopolitical situation have improved the sentiment in the chemical sector. PP will follow the market sentiment and show a strong and volatile trend in the short term. However, the improvement in the PP supply - demand pattern is limited, the spot market follow - up is limited, and the basis has declined. Caution should be exercised regarding the sustainability of the PP rebound. It is expected that the L - PP spread will decline [1]. Summary by Relevant Catalogs Market Analysis - As of the week of January 23, the downstream PP operating rate rebounded 0.34 percentage points to 52.87%, at a neutral level in the same lunar period over the years. The operating rate of plastic weaving, the main downstream of drawstring, decreased 0.56 percentage points to 42.04%, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year. On January 28, new maintenance devices such as the first line of Dushanzi Petrochemical were added, and the PP enterprise operating rate dropped to around 79%, at a low level. The production ratio of standard drawstring remained at around 27%. Near the end of the month, petrochemical inventory was depleted quickly and is currently at a low level in the same period in recent years. Cold weather has boosted diesel heating demand, alleviating demand concerns, and combined with the escalating Iran geopolitical situation, crude oil prices have risen. There has been a slight increase in maintenance devices recently. The price of downstream BOPP film continued to rebound, but as the Spring Festival holiday approaches, the operating rate of downstream plastic weaving has continued to decline, and new orders are limited [1]. Futures and Spot Market - Futures: The PP2605 contract increased in positions and fluctuated upward. The lowest price was 6,697 yuan/ton, the highest was 6,808 yuan/ton, and it finally closed at 6,778 yuan/ton, above the 20 - day moving average, with a gain of 1.30%. The open interest increased by 17,453 lots to 543,384 lots [2]. - Spot: Most PP spot prices in various regions rose. Drawstring was reported at 6,400 - 6,830 yuan/ton [3]. Fundamental Tracking - Supply: On January 28, new maintenance devices such as the first line of Dushanzi Petrochemical were added, and the PP enterprise operating rate dropped to around 79%, at a low level. The production ratio of standard drawstring remained at around 27% [4]. - Demand: As of the week of January 23, the downstream PP operating rate rebounded 0.34 percentage points to 52.87%, at a neutral level in the same lunar period over the years. The operating rate of plastic weaving, the main downstream of drawstring, decreased 0.56 percentage points to 42.04%, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [4]. - Inventory: On Wednesday, the petrochemical morning inventory decreased by 40,000 tons to 450,000 tons, 110,000 tons lower than the same lunar period last year. Near the end of the month, petrochemical inventory was depleted quickly and is currently at a low level in the same period in recent years [4]. Raw Material End - Crude oil: The Brent crude oil 03 contract rose above $67 per barrel, and the CFR propylene price in China remained flat at $820 per ton [6].

Report Industry Investment Rating - Not provided Core Viewpoints - On January 28, the plastic operating rate remained at around 89%, at a neutral level. As of the week of January 23, the downstream operating rate of PE decreased by 1.4 percentage points to 39.53%, still at a relatively low level in the same lunar period in recent years. Near the end of the month, petrochemical inventory reduction was fast, and the current petrochemical inventory was at a relatively low level in the same period in recent years. Driven by low valuation, cold weather and the geopolitical situation in Iran, the sentiment of the chemical sector improved, and plastics followed the market sentiment to fluctuate strongly in the short term. However, the improvement of the plastics supply - demand pattern was limited, the spot follow - up was limited, the basis weakened, and the sustainability of the plastics rebound should be treated with caution. Due to the new production capacity of plastics put into operation recently, the operating rate was higher than that of PP, and the concentrated demand for mulch film had not started yet, so the L - PP spread was expected to decline [1]. Summary by Directory 1. Market Analysis - On January 28, the change in maintenance devices was small, and the plastic operating rate remained at around 89%, at a neutral level. The downstream operating rate of PE decreased, with the overall still at a relatively low level in the same lunar period in recent years. Petrochemical inventory reduction was fast, and the inventory was at a relatively low level in the same period in recent years. Cold weather increased diesel heating demand, and the geopolitical situation in Iran led to a rise in crude oil prices. New production capacities were put into operation in January 2026. The concentrated demand for mulch film had not started, and the downstream operating rate was expected to decline. Plastics followed the market sentiment to fluctuate strongly in the short term, but the sustainability of the rebound should be treated with caution, and the L - PP spread was expected to decline [1]. 2. Futures and Spot Market Conditions - **Futures**: The plastic 2605 contract increased in position and fluctuated upward, with a minimum price of 6885 yuan/ton, a maximum price of 6992 yuan/ton, and a final closing price of 6967 yuan/ton, above the 60 - day moving average, with a gain of 1.31%. The position increased by 10434 lots to 531194 lots [2]. - **Spot**: The PE spot market mostly rose, with price changes ranging from - 50 to + 100 yuan/ton. LLDPE was reported at 6820 - 7170 yuan/ton, LDPE at 8600 - 9280 yuan/ton, and HDPE at 6850 - 8190 yuan/ton [3]. 3. Fundamental Tracking - **Supply**: On January 28, the change in maintenance devices was small, and the plastic operating rate remained at around 89%, at a neutral level [1][4]. - **Demand**: As of the week of January 23, the downstream operating rate of PE decreased by 1.4 percentage points to 39.53%. The agricultural film orders were basically stable, at a neutral level in the same period in recent years, and the raw material inventory of agricultural film was basically stable. The packaging film orders increased slightly, and the overall downstream operating rate of PE was still at a relatively low level in the same lunar period in recent years [1][4]. - **Inventory**: On Wednesday, the petrochemical early - morning inventory decreased by 40,000 tons to 450,000 tons, 110,000 tons lower than the same lunar period last year. Near the end of the month, petrochemical inventory reduction was fast, and the current petrochemical inventory was at a relatively low level in the same period in recent years [4]. - **Raw Materials**: The Brent crude oil 03 contract rose above $67 per barrel. The price of Northeast Asian ethylene decreased by $5 per ton to $700 per ton, and the price of Southeast Asian ethylene remained flat at $685 per ton [4].

Report Industry Investment Rating - Not provided Core Viewpoints - PP downstream's overall starting rate rose slightly, but the plastic weaving industry's starting rate and orders declined. The PP enterprise's starting rate and standard-grade drawstring production ratio decreased. Petrochemical inventory is at a relatively low level in recent years. Driven by low valuation, cold weather, and the Iran geopolitical situation, the chemical sector's sentiment improved, and PP followed the market sentiment to fluctuate strongly in the short term. However, the improvement in the PP supply - demand pattern is limited, and the sustainability of the PP rebound should be treated with caution. It is expected that the L - PP spread will decline [1]. Summary by Relevant Catalogs Market Analysis - As of the week of January 23, the PP downstream starting rate increased by 0.34 percentage points to 52.87% week - on - week, at a neutral level in the same lunar period over the years. The starting rate of plastic weaving, the main downstream of drawstring, decreased by 0.56 percentage points to 42.04% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year. On January 27, new maintenance devices such as the first line of Zhongjing Petrochemical Phase II were added. The PP enterprise's starting rate dropped to about 79.5%, at a relatively low level, and the standard - grade drawstring production ratio dropped to about 27%. Near the end of the month, petrochemical inventory was depleted quickly and is currently at a relatively low level in recent years. Cold weather boosted diesel heating demand, alleviating demand concerns. Coupled with the escalating Iran geopolitical situation, crude oil prices rose. Recently, the number of maintenance devices increased slightly. The price of downstream BOPP film continued to rebound, but as the Spring Festival holiday approached, the starting rate of downstream plastic weaving continued to decline, and new orders were limited. Driven by low valuation, cold weather, and the Iran geopolitical situation, the chemical sector's sentiment improved. PP followed the market sentiment to fluctuate strongly in the short term, but the improvement in the PP supply - demand pattern was limited, spot follow - up was limited, the basis weakened, and the sustainability of the PP rebound should be treated with caution. Due to the new production capacity of plastics being put into operation recently, the starting rate of plastics is higher than that of PP, and the concentrated demand for plastic mulch film has not started yet, so the L - PP spread is expected to decline [1]. Futures and Spot Market Quotes - Futures: The PP2605 contract opened lower and then increased positions and fluctuated. The lowest price was 6,653 yuan/ton, the highest price was 6,728 yuan/ton, and it finally closed at 6,709 yuan/ton, above the 20 - day moving average, with a gain of 0.04%. The open interest increased by 4,800 lots to 525,931 lots [2]. - Spot: Most spot prices of PP in various regions declined. The drawstring was quoted at 6,350 - 6,830 yuan/ton [3]. Fundamental Tracking - Supply: On January 27, new maintenance devices such as the first line of Zhongjing Petrochemical Phase II were added. The PP enterprise's starting rate dropped to about 79.5%, at a relatively low level, and the standard - grade drawstring production ratio dropped to about 27% [4]. - Demand: As of the week of January 23, the PP downstream starting rate increased by 0.34 percentage points to 52.87% week - on - week, at a neutral level in the same lunar period over the years. The starting rate of plastic weaving, the main downstream of drawstring, decreased by 0.56 percentage points to 42.04% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [4]. - Inventory: On Tuesday, the petrochemical early - morning inventory decreased by 60,000 tons to 490,000 tons week - on - week, 20,000 tons higher than the same period last year. Near the end of the month, petrochemical inventory was depleted quickly and is currently at a relatively low level in recent years [4]. - Raw materials: The Brent crude oil 03 contract dropped to $65/barrel, and the CFR propylene price in China increased by $15/ton to $820/ton week - on - week [4].

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - On January 27, new maintenance devices such as Qilu Petrochemical's HDPE Line 2 were added, causing the plastic operating rate to drop to around 89%, currently at a neutral level. The downstream operating rate of PE decreased to 39.53%, still at a relatively low level in the lunar calendar of recent years. The petrochemical inventory is at a relatively low level in the same period of recent years. The cost - end factors like cold weather and the tense situation in Iran have pushed up the crude oil price. New production capacities were put into operation in January 2026. The plastic is expected to oscillate strongly in the short - term, but the sustainability of the rebound should be treated with caution. The L - PP spread is expected to decline. [1] 3. Summary According to Relevant Catalogs 3.1 Market Analysis - On January 27, new maintenance devices led to a decline in the plastic operating rate to around 89%, at a neutral level. As of the week of January 23, the PE downstream operating rate decreased by 1.4 percentage points to 39.53%. The petrochemical inventory is at a relatively low level in the same period of recent years. Cold weather and the tense situation in Iran pushed up the crude oil price. New production capacities were put into operation. The plastic is expected to oscillate strongly in the short - term, but the sustainability of the rebound should be treated with caution. The L - PP spread is expected to decline. [1] 3.2 Futures and Spot Market Conditions Futures - The plastic 2605 contract oscillated with increased positions, with a minimum price of 6,831 yuan/ton, a maximum of 6,920 yuan/ton, and a final closing price of 6,899 yuan/ton, above the 60 - day moving average, with a decline of 0.23%. The position increased by 5,747 lots to 520,760 lots. [2] Spot - Most of the PE spot market declined, with price changes ranging from - 60 to + 50 yuan/ton. LLDPE was reported at 6,720 - 7,070 yuan/ton, LDPE at 8,650 - 9,280 yuan/ton, and HDPE at 6,840 - 8,190 yuan/ton. [3] 3.3 Fundamental Tracking - Supply: On January 27, new maintenance devices led to a decline in the plastic operating rate to around 89%, at a neutral level. - Demand: As of the week of January 23, the PE downstream operating rate decreased by 1.4 percentage points to 39.53%. The agricultural film orders were basically stable, and the raw material inventory was also stable. The packaging film orders increased slightly, but the overall PE downstream operating rate was still at a relatively low level in the lunar calendar of recent years. - Inventory: The petrochemical early - morning inventory on Tuesday decreased by 60,000 tons to 490,000 tons, 20,000 tons higher than the same period last year. Currently, the petrochemical inventory is at a relatively low level in the same period of recent years. - Raw materials: The Brent crude oil 03 contract dropped to 65 US dollars/barrel. The ethylene price in Northeast Asia remained flat at 705 US dollars/ton week - on - week, and that in Southeast Asia remained flat at 685 US dollars/ton week - on - week. [4]