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].

Report Industry Investment Rating No information provided Core Views - PP is expected to fluctuate within a range as its supply - demand pattern improves limitedly, downstream order cycles shorten, and downstream product profits shrink. The L - PP spread is expected to decline due to new plastic production capacity and falling agricultural film orders [1] Summary by Relevant Directory 行情分析 - As of the week of January 16, the PP downstream operating rate decreased 0.07 percentage points to 52.53% week - on - week, at a relatively low level in the same period over the years. The operating rate of the plastic weaving industry, the main downstream of PP, dropped 0.32 percentage points to 42.6% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [1] - On January 22, the PP enterprise operating rate remained at around 80%, at a moderately low level, and the production ratio of standard grade wire drawing rose to around 29% [1][7] - Petrochemicals had good inventory reduction in the first and middle ten - days of January, but the reduction has been average recently. Currently, petrochemical inventory is at a neutral level in the same period over the years [1][7] - Due to the temporary shutdown of an oil field in Kazakhstan, the postponed resumption of CPC3 SPM, and increased heating oil demand due to cold weather, crude oil prices have rebounded recently [1] - A new production capacity of 400,000 tons/year of CNPC Guangxi Petrochemical was put into operation in mid - October, and the number of maintenance devices has slightly decreased recently [1] - The price of downstream BOPP film continued to rebound, but new orders for downstream plastic weaving are limited as the Spring Festival holiday approaches [1] 期现行情 Futures - The PP2605 contract increased in position and fluctuated upward, with a minimum price of 6,491 yuan/ton, a maximum price of 6,624 yuan/ton, and finally closed at 6,624 yuan/ton, above the 20 - day moving average, up 2.43%. The open interest increased by 18,459 lots to 486,782 lots [2] Spot - Most PP spot prices in various regions rose. The wire drawing was reported at 6,200 - 6,630 yuan/ton [5] 基本面跟踪 - Supply: On January 22, the PP enterprise operating rate remained at around 80%, at a moderately low level, and the production ratio of standard grade wire drawing rose to around 29% [7] - Demand: As of the week of January 16, after the New Year's Day holiday, the PP downstream operating rate decreased 0.07 percentage points to 52.53% week - on - week, at a relatively low level in the same period over the years. The operating rate of the plastic weaving industry, the main downstream of PP, dropped 0.32 percentage points to 42.6% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [7] - Inventory: Petrochemical early - morning inventory on Thursday decreased by 10,000 tons to 540,000 tons week - on - week, 65,000 tons higher than the same period last year. Petrochemicals had good inventory reduction in the first and middle ten - days of January, but the reduction has been average recently. Currently, petrochemical inventory is at a neutral level in the same period over the years [7] 原料端原油 - The Brent crude oil 03 contract rose to $65/barrel, and the CFR propylene price in China remained flat at $785/ton week - on - week [8]

Report Summary 1. Investment Rating No investment rating is provided in the report. 2. Core View - The medium - term trend of PP still faces pressure, and the short - term is in a volatile state [1]. - The short - term demand shows a month - on - month improvement, but the cost side remains weak. In the long - term, the pressure is still large [3]. 3. Key Points by Section 3.1 Fundamental Tracking - **Futures Data**: The closing price of PP2601 yesterday was 6974, with a daily decline of 0.56%. The trading volume was 217,926, and the position change was 13,178 [2]. - **Spread Data**: The 01 - contract basis was - 144 yesterday, compared to - 170 the day before; the 01 - 05 contract spread was - 21 yesterday, compared to - 13 the day before [2]. - **Spot Price**: The spot price in North China was 6800 - 6980 yuan/ton yesterday (6860 - 7000 yuan/ton the day before), in East China was 6830 - 7000 yuan/ton yesterday (6850 - 7000 yuan/ton the day before), and in South China was 6800 - 7060 yuan/ton yesterday (6840 - 7040 yuan/ton the day before) [2]. 3.2 Spot News - The domestic PP market continued to decline slightly, with a range of 10 - 30 yuan/ton. The continuous decline of PP futures suppressed market confidence. The cost support weakened due to the price cut by upstream enterprises. The market had sufficient supply, and holders were eager to sell. However, downstream factories were cautious in stocking, mainly making low - price and rigid - demand purchases. The transaction center continued to decline, and although the low - price transactions improved slightly in the afternoon, the overall daily transaction was lower than the average level [2]. 3.3 Market Condition Analysis - The short - term demand has improved month - on - month, but the cost side is still weak. The supply pressure will further increase as the maintenance devices resume production and new production capacity expands in the future. There is still great uncertainty in the cost side, and it is necessary to be cautious when short - selling at low levels. In the long - term, the pressure remains large [3]. 3.4 Trend Intensity - The trend intensity of PP is 1, with the range of trend intensity being integers in the [- 2,2] interval. - 2 represents the most bearish, and 2 represents the most bullish [4].

Report Summary 1. Report Industry Investment Rating - No investment rating information is provided in the report. 2. Core View of the Report - The domestic PP market has slightly declined, with prices dropping by 10 - 50 yuan/ton. The continuous decline in crude oil prices during the holiday and the low - level oscillation of PP futures have dampened the trading sentiment in the spot market. Traders are still bearish on the future, actively selling goods, and some offer prices have slightly decreased to promote transactions. Downstream demand is weak, and the overall trading atmosphere is average, but low - price transactions in some regions are acceptable. The PP trend strength is 0, indicating a neutral trend [2]. 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Futures Data**: The closing price of PP2509 yesterday was 6995, with a daily decline of 0.95%. The trading volume was 273,032, and the open interest increased by 35,248. The 09 - contract basis was 105 (compared to 129 the previous day), and the 09 - 01 contract spread was 96 (compared to 58 the previous day) [1]. - **Spot Price**: In the North China region, the spot price yesterday was 7040 - 7290 yuan/ton (compared to 7080 - 7300 yuan/ton the previous day); in the East China region, it was 7100 - 7250 yuan/ton (compared to 7170 - 7300 yuan/ton the previous day); in the South China region, it was 7150 - 7360 yuan/ton (compared to 7180 - 7380 yuan/ton the previous day) [1]. 3.2 Spot News - The domestic PP market has slightly declined, with prices dropping by 10 - 50 yuan/ton. The continuous decline in crude oil prices during the holiday and the low - level oscillation of PP futures have dampened the trading sentiment in the spot market. Traders are still bearish on the future, actively selling goods, and some offer prices have slightly decreased to promote transactions. Downstream demand is weak, and the overall trading atmosphere is average, but low - price transactions in some regions are acceptable [2]. 3.3 Trend Intensity - The PP trend strength is 0, indicating a neutral trend. The trend strength ranges from - 2 to 2, with - 2 being the most bearish and 2 being the most bullish [2].