1. Report Industry Investment Rating No information provided in the document. 2. Core Viewpoints of the Report - The geopolitical conflict in the Middle East continues, and the crude oil sector is oscillating at a high level. Against the backdrop of low profits in various polyolefin production processes, the operating rate on the supply side has dropped significantly. In the short term, the geopolitical conflict dominates the market, but after the conflict cools down, attention can be paid to the opportunity of shorting the spread between LL2605 - 2609 at high levels [17]. - This week's forecast: The reference oscillation range for polyethylene (LL2605) is (8600 - 8900); for polypropylene (PP2605), it is (9000 - 9300). The recommended strategy is to wait for the geopolitical conflict to ease and short the spread between LL2605 - 2609 at high levels [17]. 3. Summaries According to Relevant Catalogs 3.1 Weekly Assessment and Strategy Recommendation - **Market Information**: The geopolitical conflict in the Middle East persists, and the crude oil sector oscillates at a high level. In terms of valuation, the weekly increase of polyethylene is (futures > spot > cost), and that of polypropylene is (futures > spot > cost). On the cost side, last week, WTI crude oil dropped by -6.23%, Brent crude oil by -4.81%, coal price rose by 4.56%, methanol dropped by -3.11%, ethylene rose by 12.74%, propylene rose by 5.40%, and propane dropped by -9.70%. The cost side rebounded [15]. - **Supply Side**: The PE capacity utilization rate is 74.57%, a week - on - week decrease of -7.22%, a year - on - year decrease of -9.48%, and a decrease of -17.73% compared to the same period in the past five years. The PP capacity utilization rate is 67.65%, a week - on - week decrease of -5.38%, a year - on - year decrease of -11.43%, and a decrease of -13.34% compared to the same period in the past five years [15]. - **Imports and Exports**: In February, the domestic PE import was 1.0284 million tons, a month - on - month decrease of -20.55% and a year - on - year decrease of -22.39%. The domestic PP import in February was 127,000 tons, a month - on - month decrease of -29.16% and a year - on - year decrease of -33.98%. The import profit decreased, the PE supply from North America decreased, and the pressure on the import side lessened. In February, the PE export was 81,100 tons, a month - on - month decrease of -13.98% and a year - on - year increase of 40.20%. The PP export in February was 213,600 tons, a month - on - month decrease of -15.16% and a year - on - year increase of 0.68%. The import profit declined significantly, and the import window was partially closed [15]. - **Demand Side**: The downstream operating rate of PE is 40.00%, a week - on - week increase of 6.41% and a year - on - year decrease of -2.32%. The downstream operating rate of PP is 46.36%, a week - on - week increase of 1.42% and a year - on - year decrease of -8.09%. The seasonal peak season has arrived, but the rebound of the downstream operating rate of polyolefins is less than that of the same period in previous years [16]. - **Inventory**: The inventory of PE production enterprises is 587,900 tons, a week - on - week inventory accumulation of 3.45% and a year - on - year inventory accumulation of 16.49%; the inventory of PE traders is 56,300 tons, a week - on - week inventory accumulation of 2.75%; the inventory of PP production enterprises is 499,700 tons, a week - on - week inventory reduction of -16.19% and a year - on - year inventory reduction of -22.13%; the inventory of PP traders is 177,800 tons, a week - on - week inventory reduction of -8.18%; the PP port inventory is 69,600 tons, a week - on - week inventory reduction of -3.13%. The inventory of traders oscillates at a high level [16]. 3.2 Spot and Futures Market - The report provides multiple charts related to the spot and futures market of polyethylene and polypropylene, including the term structure, prices, basis, spreads, trading volume, open interest, and registered warehouse receipts of LLDPE and PP [35][50]. 3.3 Cost Side - The oil - based cost has risen and then fallen. The report shows the price trends of various cost - related factors such as WTI crude oil, thermal coal, naphtha, propane, etc., as well as the supply - side composition, production, and import - related information of LPG [75][81]. 3.4 Polyethylene Supply Side - **Raw Material Proportion**: The raw materials for PE production mainly include oil - based (80.00%), light - hydrocarbon - based (12.00%), coal - based (5.00%), methanol - based (2.00%), and purchased ethylene (1.00%) [131]. - **Production Capacity and Output**: In 2026, there are many polyethylene production capacity expansion plans. The capacity utilization rate, production, and maintenance loss volume of PE are also presented in the report [136][139]. 3.5 Polyethylene Inventory and Imports/Exports - **Inventory**: The inventory of PE is oscillating at a high level. The report shows the inventory of production enterprises, two - oil enterprises, coal - based enterprises, and traders, as well as the overall inventory forecast [156][159]. - **Imports and Exports**: The import volume of PE has decreased, and the import profit has declined. The report also shows the import sources and import volume trends of LLDPE [168][170]. 3.6 Polyethylene Demand Side - **Downstream Demand Structure**: The downstream demand for LLDPE is mainly for packaging films (51.00%), followed by hollow products, pipes, injection - molded products, agricultural films, etc. The report also shows the production forecast of PE downstream terminal products [174]. - **Operating Rate and Inventory**: The downstream operating rate of PE has rebounded, but it is less than that of the same period in previous years. The report also shows the raw material inventory and finished - product inventory of PE downstream industries [179][183]. 3.7 Polypropylene Supply Side - **Raw Material Proportion**: The raw materials for PP production mainly include oil - based (53.00%), PDH - based (25.00%), coal - based (18.00%), methanol - based (2.00%), and purchased propylene (2.00%) [193]. - **Production Capacity and Output**: In 2026, there are many polypropylene production capacity expansion plans. The capacity utilization rate, production, and maintenance loss volume of PP are also presented in the report [198][199]. 3.8 Polypropylene Inventory and Imports/Exports - **Inventory**: The report shows the inventory of production enterprises, two - oil enterprises, coal - based enterprises, PDH - based enterprises, traders, and ports of PP, as well as the overall inventory forecast [210][213]. - **Imports and Exports**: The import volume of PP has decreased, and the import profit has declined. The report also shows the export volume, export profit, and export destination composition of PP [221][226]. 3.9 Polypropylene Demand Side - **Downstream Demand Structure**: The downstream demand for PP is mainly for drawing (34.00%), followed by high - and low - melt copolymer, injection - molded products, BOPP, high - melt fiber, transparent materials, pipes, etc. The report also shows the production forecast of PP downstream terminal products [230]. - **Operating Rate and Inventory**: The downstream operating rate of PP has rebounded, but it is less than that of the same period in previous years. The report also shows the raw material inventory and finished - product inventory of PP downstream industries [235][241].