Report Industry Investment Rating - The investment rating for LLDPE is "Range-bound oscillation" [1] Core Viewpoints - In the short term, due to the influence of anti - involution in China, the overall commodity sentiment is strong, but there is a risk that the trade war may exceed expectations in August. Under the background of anti - inflation in the US and anti - deflation in China, plastics are in a range - bound market for now. The fundamentals of polyethylene have not improved significantly, with increasing supply pressure and weak demand support, so the later trend pressure is still large [2] Summary by Relevant Catalogs Fundamental Tracking - The closing price of L2509 futures yesterday was 7215, with a daily change of 0.00%. The trading volume was 181,546 and the open interest decreased by 2617. The 09 - contract basis was - 135 (compared to - 114 the previous day), and the 09 - 01 contract spread was - 20 (compared to - 11 the previous day). The important spot prices in North China, East China, and South China were 7080, 7160, and 7250 yuan/ton respectively, showing a decline from the previous day [1] Spot News - This week, the domestic PE market prices oscillated and declined. The crude oil market maintained an oscillating trend, and the linear futures were generally weak. The downstream factory orders were limited, the enthusiasm for starting work was low, and the intention to purchase raw materials was weak. The sales of petrochemical and trading companies were blocked, and the overall trading volume was limited despite the price decline [1] Market Condition Analysis - Macroscopically, the short - term domestic commodity sentiment is strong due to anti - involution, while there is a risk of an unexpected trade war in August. The polyethylene fundamentals have not improved. The supply pressure is increasing as the maintenance volume in July will be less than that in June and the new production capacity in the third quarter is expected to be 1.6 million tons. The demand support is weak, and although the inventory was previously low year - on - year, it is gradually accumulating. The capacity utilization rate of Chinese polyethylene production enterprises is 77.79%, a decrease of 1.67% from the previous period, mainly due to more maintenance of existing devices [2] Demand - side Situation - The downstream of polyethylene is still in the off - season, with weak terminal orders and cautious enterprise inventory preparation. The shed film industry is in the traditional off - season, with only a slight increase in the operating rate in some areas. The procurement enthusiasm of agricultural film dealers is not high, and the raw material inventory level is lower than last year. Some food and daily - chemical packaging films have short - term rigid demand support, but the continuous replenishment is insufficient. The operating rates of PE hollow and pipes are lower than the same period last year [3][4] Trend Intensity - The trend intensity of LLDPE is 0, indicating a neutral trend [5]

Report Summary Industry Investment Rating - Not provided Core Views - PE currently has a contradiction between weak reality and strong expectations, with the futures market showing a transition from a back structure to a contango structure. The current weak spot market is due to upstream price cuts, but the supply is expected to contract with limited new capacity and ongoing maintenance, and the demand growth rate remains above 10%. If the current demand growth rate is maintained, the PE supply - demand structure is expected to be in a tight - balance state. Attention should be paid to the spot market for the L09 contract pressure to be released [3] Key Points from Different Sections Price Forecast - The monthly price range forecast for polyethylene is 7100 - 7400, with a current 20 - day rolling volatility of 11.45% and a 3 - year historical percentile of 16.7% [2] Hedging Strategies - For inventory management to prevent inventory depreciation, short L2509 futures with a 25% ratio at 7250 - 7300, and sell L2509C7400 call options with a 50% ratio at 20 - 50 to collect premiums and reduce costs - For inventory management to prevent price increases in procurement, buy L2509 futures with a 50% ratio at 7100 - 7150, and sell L2509P7100 put options with a 75% ratio at 40 - 80 to collect premiums and reduce procurement costs [2] Core Contradictions - The polyolefin market has been in a weak oscillation recently. PE spot has been weak with upstream price cuts and a significant decline in basis. However, from a fundamental perspective, supply is expected to contract due to limited new capacity and maintenance, and demand growth is over 10%, which may lead to a tight - balance state [3] Bullish Factors - PE devices are in a seasonal maintenance period until July - Some full - density devices have switched production, reducing LLDPE supply pressure, and low HDPE inventory can absorb the additional supply - The Israel - Iran conflict may reduce PE imports from Iran [4] Bearish Factors - Multiple HDPE devices are planned to be put into production in the middle of the year - Upstream price cuts have weakened the spot price support [5] Market Data - Futures prices, spreads, spot prices, regional spreads, non - standard and standard product spreads, upstream prices, and processing profits are presented in the report, showing daily and weekly changes [6][8]

1. Report Industry Investment Rating - No information provided 2. Core View of the Report - Short - term LLDP E continues to face a situation of weak supply and demand, and L2509 is expected to fluctuate with oil prices. The daily K - line should focus on the support around 7160 and the resistance around 7260. [2] 3. Summary by Relevant Catalogs 3.1 Futures Market - The closing price of the main futures contract for polyethylene is 7215 yuan/ton, with a change of 1. The closing price of the January contract is 7235 yuan/ton, up 10; the closing price of the May contract is 7209 yuan/ton, up 9; the closing price of the September contract is 7215 yuan/ton, up 1. [2] - The trading volume is 181,546 hands, down 22,735; the open interest is 434,235 hands, down 2621. [2] - The spread between the January and May contracts is 26. [2] - The long position of the top 20 futures holders is 359,889 hands, up 1289; the short position is 401,569 hands, down 607; the net long position is - 41,680 hands, up 1896. [2] 3.2 Spot Market - The average price of LLDPE (7042) in North China is 7198.7 yuan/ton, down 7.39; in East China, it is 7301.22 yuan/ton, down 17.8. [2] 3.3 Basis - The basis is - 16.3, down 8.39. [2] 3.4 Upstream Situation - The FOB mid - price of naphtha in Singapore is 62.75 US dollars/barrel, down 0.13; the CFR mid - price of naphtha in Japan is 581.38 US dollars/ton, down 2.37. [2] - The CFR mid - price of ethylene in Southeast Asia is 831 US dollars/ton, unchanged; in Northeast Asia, it is 821 US dollars/ton, unchanged. [2] 3.5 Industry Situation - The national petrochemical PE operating rate is 77.79%, down 1.67. [2] 3.6 Downstream Situation - The operating rate of polyethylene (PE) packaging film is 48.07%, down 0.37; the operating rate of PE pipes is 28%, unchanged; the operating rate of PE agricultural film is 12.63%, up 0.54. [2] 3.7 Option Market - The 20 - day historical volatility of polyethylene is 11.41%, down 0.3; the 40 - day historical volatility is 12.54%, unchanged. [2] - The implied volatility of at - the - money put options is 12.05%, up 0.04; the implied volatility of at - the - money call options is 12.06%, up 0.04. [2] 3.8 Industry News - From July 11th to 17th, China's total polyethylene production was 609,100 tons, up 0.52% from last week. [2] - From July 4th to 10th, the average operating rate of China's polyethylene downstream products decreased by 0.18% compared with the previous period. [2] - As of July 16th, the inventory of Chinese polyethylene production enterprises was 529,300 tons, up 7.34% from the previous period; as of July 11th, the social inventory of polyethylene was 536,600 tons, up 3.68% from the previous period. [2] 3.9 Viewpoint Summary - In the short term, the supply - demand situation of LLDPE remains weak, and L2509 is expected to fluctuate with oil prices. [2] - In July, there are many PE maintenance devices. This week, the production and capacity utilization rate are expected to decline. [2] - ExxonMobil and Jilin Petrochemical's new devices have production expectations, which may increase the industry supply pressure in the medium - to - long term. [2] - The downstream off - season continues, and the downstream operating rate is expected to maintain a narrow downward trend. [2] - Recently, international oil prices have been weak, weakening cost support. [2]

Group 1 - The company, Jinfa Technology, is the largest and most comprehensive modified plastic producer globally, with products widely used in automotive, home appliances, electronics, consumer electronics, and new energy sectors [1] - The current revenue contribution from humanoid robots and solid-state batteries is relatively small as these businesses are still in the development stage [1] - In the fully biodegradable plastic sector, the company's PBAT production capacity ranks first in Asia, achieving a sales volume of 43,300 tons in Q1 2025, representing a year-on-year growth of 17.34% [1]

Report Industry Investment Ratings No relevant content provided. Core Views - Crude oil: Short - term prices are expected to fluctuate narrowly, with Brent in the range of 68 - 70 USD/barrel. Medium - term outlook is bearish due to expected oversupply after the 4th quarter [2]. - Asphalt: The unilateral price is expected to oscillate at a high level, and the cracking spread is expected to be strong. The BU main contract is expected to trade between 3500 - 3650 [5]. - LPG: The PG price is expected to be weak due to sufficient supply and low downstream purchasing enthusiasm [9]. - Natural gas: US natural gas prices are expected to rise, while European natural gas prices are expected to oscillate [9][10]. - Fuel oil: High - sulfur fuel oil has some demand support, but the supply of low - sulfur fuel oil is increasing. It is recommended to wait and see [11]. - PX: Expected to follow the cost side and oscillate in the short term [13]. - PTA: Expected to oscillate and consolidate, with attention to device changes [14]. - Ethylene glycol: Supply is gradually returning, putting pressure on prices, and expected to oscillate and consolidate [17]. - Short - fiber: Processing fees are expected to be strongly supported, and it is expected to oscillate and consolidate [19]. - PET bottle chips: Expected to follow the raw material side and oscillate and consolidate [23]. - Styrene: Expected to oscillate in the short term due to supply and demand changes [27]. - PVC: In the second half of the year, it is in a pattern of oversupply, and prices are expected to be bearish in the medium and short term [30]. - Caustic soda: Short - term prices are expected to oscillate weakly [30]. - Plastic and PP: Fundamental is weak, and prices are expected to be bearish in the medium and short term [32]. - Glass: Short - term focus on production and sales, medium - term focus on cost reduction and plant cold - repair [35]. - Soda ash: Prices are expected to be strong in the short term, with attention to policy trends [38]. - Methanol: Expected to oscillate weakly in the short term, with attention to the evolution of the Middle East situation [39]. - Urea: Expected to be weak in the short term, with attention to export policies [43]. - Corrugated paper: Overall in a weak pattern, with some price increases expected [44]. - Offset paper: In a situation of weak supply and demand, prices are expected to be stable [45]. - Logs: It is recommended to wait and see for the near - month contract, and pay attention to the 9 - 11 reverse spread [48]. - Natural rubber and 20 - number rubber: Wait and see for the RU and NR main contracts; hold the RU2509 - NR2509 spread [52]. - Butadiene rubber: Try shorting the BR main contract opportunistically [55]. - Pulp: Try shorting a small amount of the SP main contract [57]. Summaries by Related Catalogs Crude Oil - Market Review: WTI2508 closed at 66.38 USD/barrel, down 0.14 USD/barrel (- 0.21%); Brent2509 closed at 68.52 USD/barrel, down 0.19 USD/barrel (- 0.28%); SC main contract 2509 closed at 507 CNY/barrel [1]. - Related News: Trump's attitude towards Powell affected the market; the Fed's economic report indicated cost pressure; EIA data showed changes in US oil inventories and production [1]. - Trading Strategy: Unilateral - narrow - range oscillation; arbitrage - gasoline and diesel cracking spreads are stable; options - wait and see [2]. Asphalt - Market Review: BU2509 closed at 3612 points (- 0.14%) at night; BU2512 closed at 3433 points (- 0.17%) at night [3]. - Related News: Prices in different regions showed different trends, affected by factors such as demand and supply [3][4]. - Trading Strategy: Unilateral - high - level oscillation; arbitrage - asphalt - crude oil spread is strong; options - wait and see [6]. LPG - Market Review: PG2508 closed at 4072 (- 0.88%) at night; PG2509 closed at 3988 (- 0.77%) at night [6]. - Related News: Prices in different regions had different trends [6][7]. - Trading Strategy: Unilateral - weak operation [9]. Natural Gas - Market Review: TTF closed at 34.809 (+ 1.06%), HH closed at 3.551 (+ 0.79%), JKM closed at 12.475 (+ 1.42%) [9]. - Related News: US natural gas inventory increased, supply and demand changed [9]. - Trading Strategy: HH unilateral - buy on dips; TTF unilateral - oscillate [10]. Fuel Oil - Market Review: FU09 closed at 2855 (- 0.56%) at night; LU09 closed at 3568 (- 2.22%) at night [10]. - Related News: Changes in fuel oil inventories and trading volume [11]. - Trading Strategy: Unilateral - wait and see; arbitrage - wait and see [12]. PX - Market Review: PX2509 main contract closed at 6716 (+ 28/+ 0.42%), and 6684 (- 32/- 0.48%) at night [12]. - Related News: Decline in polyester sales [13]. - Trading Strategy: Unilateral - oscillate and consolidate; arbitrage - wait and see; options - wait and see [13]. PTA - Market Review: TA509 main contract closed at 4706 (+ 10/+ 0.21%), and 4696 (- 10/- 0.21%) at night [13]. - Related News: Decline in polyester sales [14]. - Trading Strategy: Unilateral - oscillate and consolidate; arbitrage - wait and see; options - wait and see [16]. Ethylene Glycol - Market Review: EG2509 main contract closed at 4351 (+ 29+0.67%), and 4349 (- 2/- 0.05%) at night [16]. - Related News: Decline in polyester sales, equipment shutdown [16]. - Trading Strategy: Unilateral - oscillate and consolidate; arbitrage - wait and see; options - wait and see [18]. Short - fiber - Market Review: PF2508 main contract closed at 6356 (- 12/- 0.19%) during the day, and 6338 (- 18/- 0.28%) at night [19]. - Related News: Decline in polyester sales [19]. - Trading Strategy: Unilateral - oscillate and consolidate; arbitrage - wait and see; options - wait and see [21]. PET Bottle Chips - Market Review: PR2509 main contract closed at 5886 (+ 16/+ 0.27%), and 5876 (- 10/- 0.17%) at night [20]. - Related News: Stable factory quotes, average market transactions [23]. - Trading Strategy: Unilateral - oscillate and consolidate; arbitrage - wait and see; options - wait and see [24]. Styrene - Market Review: BZ2503 main contract closed at 6166 (+ 22/+ 0.36%) during the day, and 6151 (- 15/- 0.24%) at night; EB2508 main contract closed at 7343 (+ 3/+ 0.04%) during the day, and 7304 (- 39/- 0.53%) at night [24]. - Related News: Changes in port inventories, equipment shutdown [24]. - Trading Strategy: Unilateral - oscillate and consolidate; arbitrage - wait and see; options - wait and see [27]. PVC and Caustic Soda - Market Review: PVC prices declined, and caustic soda prices were stable [27][30]. - Related News: Changes in PVC and caustic soda inventories, new device production expectations [30]. - Trading Strategy: PVC - bearish in the medium and short term; caustic soda - oscillate weakly in the short term; arbitrage - wait and see; options - wait and see [31]. Plastic and PP - Market Review: LLDPE prices declined in some regions, and PP prices had slight changes [32]. - Related News: Changes in maintenance ratios [32]. - Trading Strategy: Unilateral - bearish in the medium and short term; arbitrage - wait and see; options - wait and see [33]. Glass - Market Review: Glass futures 09 contract closed at 1070 CNY/ton (- 1/- 0.09%), and 1078 CNY/ton (+ 8/+ 0.75%) at night [34]. - Related News: Market conditions in different regions, changes in deep - processing orders [34]. - Trading Strategy: Unilateral - pay attention to logical conversion; arbitrage - wait and see; options - wait and see [36]. Soda Ash - Market Review: Soda ash futures 09 contract closed at 1208 CNY/ton (- 6/- 0.5%), and 1215 CNY/ton (+ 7/+ 0.6%) at night [37]. - Related News: Equipment operation, price trends [38]. - Trading Strategy: Unilateral - prices are expected to be strong, pay attention to policy trends; arbitrage - wait and see; options - wait and see [38]. Methanol - Market Review: Methanol futures closed at 2362 (- 14/- 0.59%) at night [39]. - Related News: Changes in production enterprise signing volume [39]. - Trading Strategy: Unilateral - oscillate weakly in the short term; arbitrage - wait and see; options - wait and see [40]. Urea - Market Review: Urea futures oscillated and closed at 1733 (+ 2/+ 0.12%) [40]. - Related News: Changes in production and inventory, new Indian tender prices [43]. - Trading Strategy: Unilateral - oscillate weakly in the short term; arbitrage - wait and see; options - sell call options on rebounds [44]. Corrugated Paper - Related News: Market prices were stable with some increases, cost and demand situations [44]. - Trading Strategy: No trading strategy provided. Offset Paper - Related News: Market prices were stable, supply and demand situations [45]. - Trading Strategy: No trading strategy provided. Logs - Related News: Price changes, project funds, and market conditions [47]. - Trading Strategy: Unilateral - wait and see for the near - month contract; arbitrage - pay attention to the 9 - 11 reverse spread; options - wait and see [49]. Natural Rubber and 20 - number Rubber - Market Review: RU main 09 contract closed at 14525 (+ 25/+ 0.17%); NR main 09 contract closed at 12485 (- 5/- 0.04%) [49]. - Related News: Changes in export and consumption data [51]. - Trading Strategy: Unilateral - wait and see for RU and NR main contracts; arbitrage - hold the RU2509 - NR2509 spread; options - wait and see [52]. Butadiene Rubber - Market Review: BR main 09 contract closed at 11405 (- 45/- 0.39%) [53]. - Related News: Changes in production and shipping index [55]. - Trading Strategy: Unilateral - try shorting the BR main contract opportunistically; arbitrage - wait and see; options - wait and see [55]. Pulp - Market Review: SP main 09 contract closed at 5242, unchanged from the previous day [55]. - Related News: New product launch by Starbucks [56]. - Trading Strategy: Unilateral - try shorting a small amount of the SP main contract; arbitrage - wait and see; options - wait and see [57].

Report Industry Investment Rating - Unilateral: Neutral; Inter - period: 09 - 01 reverse spread; Cross - variety: Short coal - based profit [3] Core View - International crude oil prices are continuously declining with further decline expected, weakening the cost support for polyolefins. Upstream petrochemical plants' devices are restarting, increasing supply, while downstream demand remains in the off - season, resulting in a loose supply - demand balance [2] Summary by Directory 1. Polyolefin Basis Structure - Analyzed the trends of plastic and polypropylene futures' main contracts and the basis between LL East China and the main contract, as well as PP East China and the main contract [1][8][11] 2. Production Profit and Operating Rate - PE operating rate is 77.8% (-1.7%), PP operating rate is 76.6% (-0.8%). PE oil - based production profit is 167.1 yuan/ton (-5.0), PP oil - based production profit is -222.9 yuan/ton (-5.0), and PDH - based PP production profit is 245.0 yuan/ton (+52.5) [1] 3. Polyolefin Non - Standard Price Difference - Compared the price differences between HD injection molding - LL East China, HD blow molding - LL East China, etc. [32][40][41] 4. Polyolefin Import and Export Profit - LL import profit is -177.5 yuan/ton (-44.5), PP import profit is -672.8 yuan/ton (-24.7), and PP export profit is 34.2 US dollars/ton (+3.0) [1] 5. Polyolefin Downstream Operating Rate and Downstream Profit - PE downstream agricultural film operating rate is 12.6% (+0.5%), PE downstream packaging film operating rate is 48.1% (-0.4%), PP downstream plastic weaving operating rate is 42.0% (-0.2%), and PP downstream BOPP film operating rate is 60.6% (+0.3%) [1] 6. Polyolefin Inventory - Analyzed the inventories of PE and PP in oil - based enterprises, coal - chemical enterprises, traders, and ports [73][78][88]

Report Industry Investment Ratings No specific industry investment ratings are provided in the report. Core Viewpoints The report provides trend forecasts for various commodities in the futures market, including precious metals, base metals, energy, agricultural products, etc., and analyzes their fundamentals and market news [2][5]. Summary by Commodity Precious Metals - **Gold**: Expected to oscillate upwards, with a trend strength of 1 [2][10]. - **Silver**: Expected to break through and rise, with a trend strength of 1 [2][10]. Base Metals - **Copper**: Market is cautious, and prices will oscillate, with a trend strength of 0 [2][11]. - **Zinc**: Under pressure, with a trend strength of -1 [2][15]. - **Lead**: Downside may be limited, with a trend strength of 0 [2][18]. - **Tin**: Prices are weakening, with a trend strength of -1 [2][23]. - **Aluminum**: Facing upward pressure, with a trend strength of 0; Alumina: Attention should be paid to the impact of the ore end, with a trend strength of -1; Cast aluminum alloy: Will oscillate within a range, with a trend strength of 0 [2][26]. - **Nickel**: News affects sentiment, and fundamentals are under pressure, with a trend strength of 0; Stainless steel: Reality and macro factors are in a game, and steel prices will oscillate, with a trend strength of 0 [2][31]. Energy - **Crude Oil - Related**: - **Fuel oil**: Weakly oscillating at night, may temporarily stabilize in the short - term [5]. - **Low - sulfur fuel oil**: Temporarily weak, with a slight decline in the high - low sulfur spread of the outer - market spot [5]. - **LPG**: Cost support is effective, may rebound in the short - term [5]. - **Coal - Related**: - **Coking coal**: Will oscillate widely, with a trend strength of 0 [2][52]. - **Coke**: Will oscillate widely, with a trend strength of 0 [2][52]. - **Steam coal**: Daily consumption is recovering, and prices will oscillate and stabilize, with a trend strength of 0 [54][57]. Chemicals - **Carbonate Lithium**: Warehouse receipts continue to decline, pay attention to substantial changes in supply, with a trend strength of 1 [32][35]. - **Industrial Silicon**: Market sentiment is fermenting, pay attention to upward space, with a trend strength of 1 [36][38]. - **Polysilicon**: Market news continues to ferment, with a trend strength of 1 [36][38]. - **PTA**: In the off - season of demand, with a weak unilateral trend [2]. - **MEG**: Low inventory, positive spread arbitrage on dips [2]. - **Styrene**: Spot liquidity is released, weakly oscillating [2]. - **Soda Ash**: Little change in the spot market [5]. - **PVC**: Weakly oscillating [5]. Agricultural Products - **Palm Oil**: Doubts about production recovery in the origin, waiting for the evolution of contradictions [5]. - **Soybean Oil**: Lack of driving force due to insufficient weather speculation on US soybeans [5]. - **Soybean Meal**: Export expectations improve, US soybeans rise, and domestic soybean meal rebounds [5]. - **Corn**: Pay attention to the spot [5]. - **Sugar**: Waiting for guidance from super - expected information [5]. - **Cotton**: Futures prices hit a new high this year [5]. - **Eggs**: The expectation of a rebound in the peak season is fulfilled, and the sentiment of culling declines [5]. - **Pigs**: Sentiment has changed [5]. - **Peanuts**: There is support below [5]. Others - **Shipping**: For the container shipping index (European line), hold 10 - 12 and 10 - 02 reverse spreads lightly [5]. - **Logs**: Oscillate repeatedly, with a trend strength of 0 [58][61].

Group 1: Market Overview - The Shanghai Composite Index closed at 3520 points, with a daily increase of 0.27% and a monthly increase of 1.34% [1] - The Shenzhen Composite Index closed at 2120 points, with a daily increase of 0.15% and a monthly increase of 2.2% [1] - The large-cap index showed a slight increase of 0.04% over the past month, while the small-cap index increased by 5.1% [1] Group 2: Industry Performance - The small home appliance sector saw a daily increase of 5.71% and a monthly increase of 7.42% [1] - Precious metals experienced a daily increase of 2.94% but a monthly decline of 4.4% [1] - The diversified financial sector faced a significant decline of 3.3% yesterday and a 11.78% drop over the past month [1] Group 3: Real Estate Sector Insights - The real estate sector remains sluggish, but strong product capability and inventory management are highlighted as advantages for quality real estate companies [3][12] - Recommended companies include: Jianfa International, Binjiang Group, China Resources Land, and Jianfa Co., with a focus on companies with strong product capabilities and inventory management [3][16] - The report anticipates a slow recovery in the real estate sector, with a projected performance decline in 2025H1 due to continuous sales decreases since 2021 [12][16] Group 4: Baofeng Energy Analysis - Baofeng Energy is expected to achieve a net profit of 54-59 billion yuan in 2025H1, representing a year-on-year growth of 63.39%-78.52% [17] - The Inner Mongolia project is projected to be a significant growth driver, with the company’s total olefin production capacity reaching 520,000 tons per year [17][18] - The company maintains a "buy" rating with projected net profits of 135 billion, 151 billion, and 160 billion yuan for 2025-2027, corresponding to PE ratios of 9, 8, and 7 times [21][24] Group 5: Jinfa Technology Performance - Jinfa Technology is expected to see a net profit increase of 45%-71% in 2025H1, driven by steady growth in modified and specialty plastics [20][22] - The company is focusing on optimizing product structure and expanding its global presence, particularly in emerging fields such as humanoid robots and low-altitude economy [22] - The report highlights the acceleration of growth in specialty engineering plastics due to rising domestic demand for self-sufficiency [22]

Core Viewpoint - The modified plastics industry is expected to thrive in 2023, particularly driven by the automotive sector, which has seen significant growth in production and sales in China [1]. Group 1: Industry Performance - In the first half of the year, major companies such as Prilit (+66.65%), Yinhui Technology (+83%), Xinhengcheng (+70%), and Daon Co. (+48%) reported substantial earnings growth, indicating a positive trend for other companies like Kingfa Technology, Nanjing Julong, and Huitong Co. [2]. - Kingfa Technology anticipates a net profit of 550 million to 650 million yuan for the first half of 2025, representing a year-on-year increase of 44.82% to 71.15% [3]. Group 2: Company Developments - Kingfa Technology reported a total revenue of 15.666 billion yuan in Q1 2025, a 49.06% increase year-on-year, with a net profit of 247 million yuan, up 138.20% [4]. - The company attributes its performance to three main factors: increased product development, optimization of product structure, and accelerated global expansion [4][5]. - Kingfa's production capacity for modified plastics is projected to reach 3.72 million tons per year, with significant contributions from automotive and electronic sectors [4]. Group 3: Strategic Goals - Kingfa Technology aims for a total output value of 1 trillion yuan, with specific targets of 800 billion yuan from modified plastics, 300 billion yuan from new materials, 400 billion yuan from green petrochemicals, and 100 billion yuan from healthcare [8].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In the medium term, the prices of polypropylene (PP) and polyethylene (PE) are bearish. In the short term, the commodity atmosphere is warm, and the prices of plastic PP are oscillating. After the macro - sentiment weakens, they are still regarded as bearish [3][4]. 3. Summary According to Relevant Catalogs 3.1 Comprehensive Analysis and Trading Strategies - **Comprehensive Analysis**: In the third quarter, PP and PE still face significant production capacity release pressure, which eases in the fourth quarter. The expected new production capacity of standard - grade PE in the second half of the year is only 500,000 tons, with a reduced pressure compared to the first half. However, supply is not tightening as the high - level maintenance in the first half may lead to a rebound in the operation rate of existing facilities in the second half. Terminal demand is weak year - on - year, and there are no strong factors to reverse the weak demand, so there is a lack of upward momentum [3]. - **Trading Strategies**: - **Unilateral Trading**: In the medium term, prices are bearish. In the short term, due to the warm commodity atmosphere, plastic PP prices are oscillating and will turn bearish after the macro - sentiment weakens. - **Arbitrage**: Temporarily on the sidelines. - **Options**: Temporarily on the sidelines [4]. 3.2 Core Logic Analysis - **Inventory**: This week, both PE and PP inventories increased. PE total inventory rose by 34,000 tons to 1.054 million tons, and PP total inventory increased by 18,000 tons to 533,000 tons [6][8]. - **Production Capacity Release**: In the second half of the year, the estimated new PP production capacity is 3.15 million tons, and the new PE production capacity is 2.05 million tons for the 2509 contract and 800,000 tons for the 2601 contract. The release of linear low - density polyethylene (LL) production capacity slows down significantly in the second half of the year [9]. - **Demand**: The demand for PE and PP is still weak year - on - year. The PE pipe industry's operating rate decreased by 3 percentage points to 29% this week, and the BOPP and injection - molding industries of PP saw their operating rates drop by 1 percentage point to 58% and 44% respectively [12][13][14]. 3.3 PE Weekly Data Tracking - **Prices and Spreads**: The prices of various PE products and related raw materials showed different changes. For example, the Brent spot price increased by 2.5% week - on - week, and the oil - based PE profit increased by 8.5 [24]. - **Sino - US PE Relationship**: China is a net importer of PE. In 2024, the apparent demand for PE was 41.61 million tons, with an import volume of 13.85 million tons and an import dependence of 33%. The import volume from the US was 2.39 million tons, accounting for 17.2% of total imports and 5.7% of apparent demand [27]. - **Profit**: The profits of different production methods of PE, such as oil - based and coal - based, showed different trends. The oil - based PE profit increased by 8.5 week - on - week [24]. - **Inventory**: PE inventory increased this week, with the total inventory rising by 34,000 tons to 1.054 million tons [8]. - **Production and Operation**: The current PE operating load is 74.68%, a decrease of 2.2 percentage points from the previous period [46]. - **Import and Export**: This week, the PE import market continued the situation of weak supply and demand. The supply of import offers and quotas remained low, and the demand was weak, resulting in a light trading atmosphere [55]. 3.4 PP Weekly Data Tracking - **Prices and Spreads**: The prices of various PP products and related raw materials also changed. For example, the Brent spot price increased by 2.48% week - on - week, and the PP CFR China price remained unchanged [66]. - **Sino - US PP Relationship**: China is a net importer of PP. In 2024, the apparent demand for PP was 39.37 million tons, with an import volume of 367,000 tons and an import proportion of 9%. The import volume from the US was 39,400 tons, accounting for 1.07% of total imports and 0.1% of apparent demand. The cost - end propane of PP has a high dependence on the US [69]. - **Profit**: The profits of different production methods of PP, such as oil - based, CTP, and PDH, showed different trends. The oil - based PP profit increased by 58 [66]. - **Inventory**: PP inventory increased this week, with the total inventory rising by 18,000 tons to 533,000 tons [8]. - **Production and Operation**: This week, the operating load rate of domestic PP plants was 77.42%, an increase of 0.01 percentage points from the previous week and 3.76 percentage points from the same period last year [87]. - **Import and Export**: In terms of imports, overseas suppliers were cautious, and the offers were few and higher than the domestic market level, resulting in few transactions. In terms of exports, due to sufficient supply from the Middle East and emerging regions, China's PP exports had difficulty in getting large - volume orders [94][96].