Core Viewpoint - The launch of monthly average price futures for LLDPE, PVC, and PP at Dalian Commodity Exchange aims to enhance liquidity and provide a pricing tool that aligns with the purchasing and sales practices of enterprises in the chemical industry [1][2][3]. Group 1: Launch Details - The first three chemical monthly average price futures will be listed on October 28, with contracts for the months of February, March, and April 2026 [1][3]. - The trading unit for these contracts is set at 5 tons per lot, with a minimum price fluctuation of 1 RMB per ton [2][3]. - The contracts will be included in the range of tradable products for qualified foreign institutional investors starting from the night session on October 28 [1]. Group 2: Pricing Mechanism - The pricing mechanism for the monthly average price futures will utilize a "phased calculation" model to ensure price fairness and mitigate market manipulation risks [3]. - During the month prior to the contract month, the daily settlement price will be directly linked to the corresponding physical delivery futures contract's settlement price [3]. - Once in the contract month, the settlement price will be calculated as an arithmetic average of the actual settlement prices and estimated values, reflecting the "monthly average" pricing logic more accurately [3]. Group 3: Industry Impact - The introduction of monthly average price futures is expected to enrich enterprises' pricing strategies in spot trading, providing a fair average price signal and enabling more diverse risk management strategies [5]. - The launch is seen as a significant step for the plastic industry, enhancing China's pricing influence in the international market and supporting high-quality industrial development [5]. - The Dalian Commodity Exchange aims to create a complementary relationship between the new monthly average price futures and existing physical delivery futures, enhancing the overall ecosystem of chemical derivatives [5].

Core Insights - The production of primary plastic shapes in Heilongjiang Province for the first half of 2025 reached 1.207 million tons, representing a 1.7% decrease compared to the same period in 2024, with a growth rate 18.7 percentage points lower than in 2024 and 12.0 percentage points lower than the national average [1] - In June 2025, the production of primary plastic shapes in Heilongjiang Province was 209,000 tons, showing a 4.2% increase year-on-year, but the growth rate was 76.0 percentage points lower than in June 2024 and 7.9 percentage points lower than the national average [2] Summary by Category Production Data - In the first half of 2025, Heilongjiang's primary plastic production accounted for 1.7% of the national total of 70.123 million tons [1] - The June 2025 production figure of 209,000 tons also represented 1.7% of the national total of 12.032 million tons for that month [2] Year-on-Year Comparison - The first half of 2025 saw a decline in production compared to 2024, with a notable decrease in growth rates [1] - The June 2025 production showed an increase compared to June 2024, but the growth rate was significantly lower than the previous year [2]

Core Insights - The introduction of monthly average futures for LLDPE, PVC, and PP on October 28 aims to enhance risk management tools in the chemical industry, stabilize supply chains, and improve China's influence on plastic pricing [1] Group 1: Monthly Average Futures Overview - The monthly average futures contracts for LLDPE, PVC, and PP are based on the monthly settlement prices of corresponding physical delivery futures, with cash settlement upon expiration [1] - These contracts provide a risk management tool tailored for "average price trading" on a monthly basis, leveraging the fair prices of existing physical delivery futures [1] Group 2: Supply and Demand Situation - China is the largest producer and consumer of plastics globally, with projected capacities for 2024 being 35.71 million tons for polyethylene, 27.54 million tons for PVC, and 46.76 million tons for polypropylene [2] - The production volumes for 2024 are expected to be 27.91 million tons for polyethylene, 23.44 million tons for PVC, and 34.76 million tons for polypropylene, while consumption is projected at 40.94 million tons, 20.89 million tons, and 35.73 million tons respectively [2] - China's plastic exports have been increasing, with PVC exports rising from 63000 tons in 2020 to 262000 tons in 2024, and polypropylene exports increasing from 43000 tons to 235000 tons in the same period [2] Group 3: Rationale for Launching Monthly Average Futures - The launch of these futures is a response to the oversupply in the plastic industry and increasing exports, catering to the refined and diversified risk management needs of industry enterprises [2] - These futures will provide smoother price references and enrich the futures market toolset, enhancing China's pricing influence in the plastic sector [2] Group 4: International Precedents - The introduction of monthly average futures is not unprecedented, as CME launched WTI crude oil monthly average futures in 2006, followed by several international exchanges adopting similar products [3] - Monthly average futures have become essential tools in major international futures exchanges over the years [3]

Core Viewpoint - Ultra High Molecular Weight Polyethylene (UHMWPE) is a critical material in various high-performance applications, particularly in the fields of lithium battery separators and high-strength fibers, driven by the rapid growth of the global electric vehicle industry and geopolitical changes [3][10]. Group 1: Overview of UHMWPE - UHMWPE is a linear thermoplastic engineering plastic with a molecular weight exceeding 1.5 million, known for its exceptional mechanical properties and chemical stability [6][9]. - The material exhibits superior impact resistance, wear resistance, and self-lubrication, making it essential in strategic industries and national defense [3][6]. Group 2: Global Supply and Demand Analysis - In 2023, global UHMWPE production capacity reached approximately 490,000 tons per year, with Asia accounting for 55.1% of this capacity [11]. - The global demand for UHMWPE has been growing at an annual rate of over 10%, with consumption expected to reach around 486,000 tons in 2023, translating to a market size of approximately $7.3 billion [13][21]. - The lithium battery separator market has become the largest application for UHMWPE, with consumption projected to grow at an annual rate of 18% over the next three years [15][23]. Group 3: Domestic Supply and Demand Analysis - As of 2023, China's UHMWPE production capacity stands at 211,000 tons per year, with significant advancements in technology and production capabilities [17][18]. - The apparent consumption of UHMWPE in China is estimated at 432,000 tons in 2023, with nearly half used for lithium battery separators, reflecting the rapid growth of the domestic electric vehicle market [21][23]. - The domestic market for UHMWPE fibers is expected to grow at an annual rate of approximately 12% over the next three years, driven by increasing demand in military and safety applications [23][58]. Group 4: Technological Advances in UHMWPE - The production of UHMWPE primarily utilizes liquid phase slurry polymerization technology, with the Hostalen process being the most widely adopted globally [31][35]. - Recent breakthroughs in production technology include the development of continuous ring pipe slurry processes, enhancing production efficiency and product quality [37][38]. Group 5: Applications of UHMWPE - UHMWPE is increasingly used in lithium battery separators due to its high thermal stability and safety features, making it a preferred choice for electric vehicle batteries [41][42]. - The fiber produced from UHMWPE is recognized for its high strength and modulus, finding applications in military, marine, and safety equipment [43][44]. - In the medical field, UHMWPE is utilized in artificial joints and other medical devices due to its excellent wear resistance and biocompatibility [46]. Group 6: Investment Logic Analysis - The UHMWPE industry presents high growth potential, with significant opportunities in high-end applications such as lithium battery separators and medical-grade materials [60][61]. - Investment opportunities are concentrated in areas addressing core industry challenges, particularly in high-performance catalysts and specialized resin production [62][63]. - The demand for UHMWPE is expected to be driven by the growth of the electric vehicle market and military applications, making it a promising sector for investment [63][64].

Report Summary 1. Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - Short - term L2601 is expected to show a volatile trend. Technically, attention should be paid to the previous low support around 6855 and the 10 - day moving average pressure around 6994 [2]. - The overall inventory pressure is not significant, with obvious accumulation in production enterprise inventory and a narrow decline in social inventory [2]. - Oil - made LLDPE cost decreases with the decline of international oil prices, and oil - made profits are restored; coal - made cost decreases slightly, and losses deepen [2]. - PE production and capacity utilization are expected to rise slightly this week. In October, the supply pressure in the industry is relatively high due to fewer new shutdown devices and the upcoming new production capacity [2]. - The downstream shed film is in the peak season, with orders and operating rates gradually rising to the annual high; the new orders for packaging film are limited, and the devices are expected to operate stably [2]. 3. Summary by Relevant Catalogs Futures Market - The closing prices of polyethylene futures main contracts and different - month contracts increased. The 1 - 5 spread decreased. The trading volume increased, while the open interest decreased. The long and short positions of the top 20 futures decreased, and the net long position decreased [2]. - For example, the closing price of the main polyethylene futures contract was 6879 yuan/ton, up 5 yuan/ton; the 1 - 5 spread was - 42, down 9 [2]. Spot Market - The average price of LLDPE (7042) in North China increased slightly, while that in East China decreased slightly. The basis increased [2]. - The average price of LLDPE (7042) in North China was 6996.09 yuan/ton, up 0.43 yuan/ton; in East China, it was 7145.95 yuan/ton, down 4.52 yuan/ton [2]. Upstream Situation - The prices of naphtha and ethylene in the upstream decreased [2]. - The FOB middle - price of naphtha in Singapore was 58.33 US dollars/barrel, down 0.99 US dollars; the CFR middle - price of naphtha in Japan was 537 US dollars/ton, down 8.5 US dollars [2]. Industry Situation - The national PE petrochemical operating rate decreased [2]. - The national PE petrochemical operating rate was 81.76%, down 2.19% [2]. Downstream Situation - The operating rates of different polyethylene downstream products varied. The operating rate of packaging film decreased slightly, that of pipes increased slightly, and that of agricultural film increased significantly [2]. - The operating rate of polyethylene packaging film was 52.19%, down 0.7%; that of pipes was 32%, up 0.33%; that of agricultural film was 42.89%, up 7.28% [2]. Option Market - The historical and implied volatilities of polyethylene options decreased [2]. - The 20 - day historical volatility of polyethylene was 8.45%, down 0.02%; the implied volatility of at - the - money put and call options decreased [2]. Industry News - From October 10th to 16th, PE production decreased by 2.05% to 65.06 tons, and the capacity utilization rate decreased by 2.19% to 81.76%. The average operating rate of Chinese polyethylene downstream products increased by 0.55%, and the overall operating rate of agricultural film increased by 7.3% [2]. - As of October 15th, the inventory of Chinese polyethylene production enterprises was 52.95 tons, up 8.37%; as of October 17th, the social inventory of polyethylene was 54.54 tons, down 0.05% [2]. - From October 11th to 17th, the cost of oil - made LLDPE decreased by 3.34% to 7166 yuan/ton, and the oil - made profit increased by 140.29 yuan/ton to - 80.71 yuan/ton; the cost of coal - made LLDPE decreased by 0.86% to 6507 yuan/ton, and the coal - made profit decreased by 76.15 yuan/ton to 494.14 yuan/ton [2].

Market Performance - The plastic sector increased by 1.56% on October 20, with Qide New Materials leading the gains [1] - The Shanghai Composite Index closed at 3863.89, up 0.63%, while the Shenzhen Component Index closed at 12813.21, up 0.98% [1] Top Gainers in Plastic Sector - Qide New Materials (300995) closed at 46.84, up 6.19% with a trading volume of 29,100 lots and a turnover of 136 million [1] - Gengxin Guonian (688087) closed at 28.33, up 5.55% with a trading volume of 54,300 lots and a turnover of 153 million [1] - Tongyi Co., Ltd. (300538) closed at 15.67, up 4.33% with a trading volume of 55,800 lots and a turnover of 87.29 million [1] - Cangzhou Mingzhu (002108) closed at 4.44, up 4.23% with a trading volume of 3,237,100 lots and a turnover of 1.397 billion [1] Market Trends - The plastic sector experienced a net outflow of 355 million from institutional investors, while retail investors saw a net inflow of 278 million [2][3] - The overall trading activity indicates a mixed sentiment, with institutional investors pulling back while retail investors are actively participating [2][3] Individual Stock Performance - Jinfat Technology (600143) had a net inflow of 62.73 million from institutional investors, but saw outflows from both retail and speculative investors [3] - Cangzhou Mingzhu (002108) attracted significant net inflows from both institutional and speculative investors, despite a notable outflow from retail investors [3]

Report Summary 1. Report Industry Investment Rating No information provided on the report industry investment rating. 2. Core View of the Report The overall plastic production has increased, mainly in linear materials. The downstream agricultural film enterprises' operations are slowly recovering, but the overall demand is still weaker than in previous years. The other packaging films are mainly procured as needed [6]. 3. Summary by Directory Supply - PE production enterprises' operating rate is 81.76%, a 2.26% week - on - week increase; PE weekly output is 65.06 tons, a 3.04% week - on - week increase [8]. Demand - The weighted operating rate of PE downstream industries has seasonally increased, reaching 44.92%, a 0.52% week - on - week increase [8]. Inventory - This week, PE enterprises' inventory is 52.95 tons, a 27.67% week - on - week increase; social inventory is 54.56 tons, a 2.16% week - on - week decrease [8]. Upstream and Cost No specific summary information provided in the given text. Price and Profit - This week, the PE spot price decreased by 0.12% week - on - week to 7145 yuan/ton, and the PE futures price decreased by 0.96% week - on - week to 6874 yuan/ton [8]. Basis and Spread - The basis is 272; the (1 - 5) spread is - 33 [8].

1. Report Industry Investment Rating - The report does not explicitly mention an overall industry investment rating. However, for both LLDPE and PP, the short - term investment view is "oscillating" [2][3] 2. Core Viewpoints of the Report - The short - term market for LLDPE and PP lacks obvious driving forces, and it is expected that the prices will mainly oscillate. The market has returned to fundamentals due to the fading of macro - sentiment [2][3] 3. Summary by Relevant Catalogs LLDPE Analysis - **Supply**: This week, China's LLDPE production was 30.86 tons, a 3.23% decrease from last week. The capacity utilization rate of Chinese polyethylene producers was 81.76%, a 2.19 - percentage - point decrease from the previous period, mainly due to new maintenance at several plants [2] - **Demand**: The average downstream product start - up rate of LLDPE/LDPE increased by 1.64% compared to the previous period. The cumulative import volume in 2025 was 898.16 million tons, a 0.84% year - on - year decrease. In August, China's polyethylene import volume was 95.02 million tons, a 22.14% year - on - year and 14.17% month - on - month decrease [2] - **Inventory**: The sample inventory of Chinese polyethylene producers was 52.95 million tons, an 8.37% month - on - month increase. The social sample warehouse inventory was 54.56 million tons, a 4.03% month - on - month increase and a 10.85% year - on - year decrease. The inventory of imported polyethylene warehouses increased by 3.32% month - on - month and decreased by 21.57% year - on - year [2] - **Basis**: The current basis of the main contract is around 323, with the futures price at a discount [2] - **Profit**: Coal - based and ethane - based production costs increased by 3 and 39 yuan/ton respectively, while oil - based, ethylene - based, and methanol - based production costs decreased by 249, 200, and 66 yuan/ton respectively. International oil prices fell this week [2] - **Valuation**: The spot price and the absolute futures price are neutral, and the near - month contract is at a deep discount [2] - **Macro Policy**: The macro - sentiment has faded, and trading has returned to fundamentals, with the futures price oscillating weakly [2] PP Analysis - **Supply**: The average capacity utilization rate of polypropylene was 78.22%, a 0.47% month - on - month increase; the capacity utilization rate of Sinopec was 81.01%, a 1.32% month - on - month increase [3] - **Demand**: The average start - up rate increased by 0.09 percentage points to 51.85%. The demand for medical products such as masks and diapers increased with the cooling weather, while the PP pipe industry was affected by rainy weather. The demand in multiple fields such as food and daily necessities was good before the e - commerce festivals [3] - **Inventory**: The inventory of Chinese polypropylene producers was 67.87 million tons, a 0.40% month - on - month decrease. The port sample inventory decreased by 0.08 million tons, a 1.16% month - on - month decrease. The inventory of trading companies decreased by 2.25 million tons, an 8.60% month - on - month decrease [3] - **Basis**: The current basis of the main contract is around 29, with the futures price close to parity [3] - **Profit**: This week, the profits of oil - based and externally - purchased propylene - based PP production improved, while the profits of coal - based, methanol - based, and PDH - based PP production declined. International oil prices fell [3] - **Valuation**: The spot price and the absolute futures price are neutral, and the near - month contract is at a discount [3] - **Macro Policy**: The macro - sentiment has faded, and trading has returned to fundamentals, with the futures price oscillating weakly [3] Main Weekly Data Changes - **Prices**: PP futures price decreased by 2.54% to 6551 yuan/ton; PE futures price decreased by 2.32% to 6874 yuan/ton; PP spot price decreased by 3.24% to 6580 yuan/ton; LLDPE spot price decreased by 2.62% to 7050 yuan/ton [5] - **Production**: PP production increased by 13.61%; PE production decreased by 2.05%; HDPE production decreased by 1.39% [5] - **Start - up Rates**: PP start - up rate decreased by 2.60% to 38.6%; PE start - up rate decreased by 2.61% to 81.76% [5] - **Inventory**: PP factory inventory increased by 1.58% to 42970 tons; PE social inventory increased by 3.02% to 66.47 million tons; HDPE social inventory data was unavailable; PP warehouse receipts increased by 2.02% to 14313 hands; PE warehouse receipts decreased by 0.35% to 12685 hands [5] - **Downstream Start - up Rates**: The agricultural film start - up rate increased by 20.44% to 42.89%; the packaging film start - up rate decreased by 1.32% to 52.19%; the PP pipe start - up rate decreased by 0.89% to 36.6%; the injection - molding start - up rate decreased by 7.57% to 53.48% [5] - **Cost and Profit**: PP weighted profit increased by 5.66% to - 509.7718 yuan/ton; PE weighted profit decreased by 237.96% to 46.287134 yuan/ton [5]

Report Industry Investment Rating - Not mentioned in the report Core Viewpoints - This week, the supply pressure of PVC decreased, but next week, the number of overhauls is expected to decrease, and production scheduling is expected to increase. The overall inventory is at a high level, and the current demand is close to the historical average. PVC2601 is expected to fluctuate in the range of 4659 - 4717. The fundamentals are neutral, and factors such as macro - policies and export dynamics should be continuously monitored [6]. - The positive factors include supply resumption, cost support from calcium carbide and ethylene, and export advantages. The negative factors are the rebound of overall supply pressure, high - level inventory with slow consumption, and weak domestic and foreign demand. The main logic is the strong overall supply pressure and the poor recovery of domestic demand [6][9][10]. Summary by Directory 1. Daily Viewpoints - **Supply Side**: In September 2025, PVC production was 2.030766 million tons, a month - on - month decrease of 2.05%. This week, the capacity utilization rate of sample enterprises was 76.69%, a month - on - month decrease of 0.07 percentage points. The production of calcium carbide enterprises was 317,720 tons, a month - on - month decrease of 9.92%, and that of ethylene enterprises was 149,660 tons, a month - on - month decrease of 0.78%. Next week, the number of overhauls is expected to decrease, and production scheduling is expected to increase slightly [6]. - **Demand Side**: The overall downstream开工率 was 48.59%, a month - on - month increase of 0.38 percentage points, lower than the historical average. The downstream profile开工率 was 33.26%, a month - on - month increase of 7.39 percentage points, lower than the historical average. The downstream pipe开工率 was 40%, a month - on - month increase of 0.17 percentage points, lower than the historical average. The downstream film开工率 was 72.5%, a month - on - month increase of 0.569 percentage points, higher than the historical average. The downstream paste resin开工率 was 46.29%, a month - on - month decrease of 30.4 percentage points, lower than the historical average. Shipping costs are expected to rise, and the domestic PVC export price is competitive. The current demand is close to the historical average [6]. - **Cost Side**: The profit of calcium carbide method was - 713.18 yuan/ton, with the loss increasing by 14.60% month - on - month, lower than the historical average. The profit of ethylene method was - 552.76 yuan/ton, with the loss increasing by 2.60% month - on - month, lower than the historical average. The double - ton price difference was 2,363.45 yuan/ton, with the profit increasing by 0.80% month - on - month, lower than the historical average. Production scheduling may be under pressure [6]. - **Basis**: On October 17, the price of East China SG - 5 was 4,660 yuan/ton, and the basis of the 01 contract was - 28 yuan/ton, with the spot at a discount to the futures. It is neutral [6]. - **Inventory**: The in - factory inventory was 360,300 tons, a month - on - month decrease of 6.06%. The calcium carbide factory inventory was 277,100 tons, a month - on - month decrease of 7.71%. The ethylene factory inventory was 83,200 tons, a month - on - month decrease of 0.12%. The social inventory was 556,200 tons, a month - on - month decrease of 0.14%. The inventory days of production enterprises were 6 days, a month - on - month decrease of 4.76%. It is bearish [6]. - **Market**: MA20 is downward, and the futures price of the 01 contract closed below MA20. It is bearish [6]. - **Main Position**: The main position is net short, and the short position is decreasing. It is bearish [6]. 2. PVC Market Overview - Various indicators such as prices, spreads,开工率, profits, and inventories of different types of PVC enterprises and contracts are presented, including changes compared with the previous values and their respective growth or decline rates [13]. 3. PVC Futures Market - **Basis Trend**: The historical basis trend of PVC, along with the East China market price and the main contract closing price, is shown from 2022 to 2025 [16]. - **Price and Volume Trend**: The price, trading volume, and position changes of the PVC futures main contract from September to October 2025 are presented [19]. - **Spread Analysis**: The historical spread trends of different contract months (such as 1 - 9, 5 - 9) of PVC futures from 2024 to 2025 are shown [22]. 4. PVC Fundamental Analysis - **Calcium Carbide Method - Related**: The price, cost - profit,开工率, inventory, and other data of raw materials such as semi - coke, calcium carbide, liquid chlorine, raw salt, and caustic soda in the calcium carbide method are presented, along with their historical trends from multiple years [25][28][30][32]. - **PVC Supply Trend**: The capacity utilization rates of calcium carbide method and ethylene method, production profits, daily and weekly production, and overhaul volumes of PVC are presented, along with their historical trends from multiple years [37][39]. - **Demand Trend**: The daily sales volume of PVC traders, weekly pre - sales volume, production - sales ratio, apparent consumption, downstream开工率 of different products (profiles, pipes, films, paste resin), and related data of the real estate market and social financing scale are presented, along with their historical trends from multiple years [41][44][46][51][54]. - **Inventory**: The exchange warehouse receipts, calcium carbide factory inventory, ethylene factory inventory, social inventory, and production enterprise inventory days of PVC are presented, along with their historical trends from multiple years [56]. - **Ethylene Method**: The import volumes of vinyl chloride and dichloroethane, PVC export volume, FOB spread of ethylene method, and import spread of vinyl chloride are presented, along with their historical trends from multiple years [58]. - **Supply - Demand Balance Sheet**: The monthly supply - demand trends of PVC from August 2024 to September 2025, including import, production, factory inventory, social inventory, demand, and export, are presented [61].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - In the short - term, polyolefins continued their downward trend this week, mainly driven by macro - sentiment and upstream cost fluctuations, with limited fundamental drivers. The market should focus on whether Sino - US trade frictions will escalate and if new stimulus policies will be introduced during the 20th Fourth Plenary Session. It is recommended to wait and see for unilateral trading [7]. - In the long - term, due to the large number of new PE installations planned to be put into production in the fourth quarter, the supply is expected to increase further. Without new demand - boosting policies, the supply - demand pressure of PE is difficult to resolve, and the weak pattern is expected to continue [8]. 3. Summary by Relevant Catalogs 3.1 Core Contradictions and Strategy Recommendations 3.1.1 Core Contradictions - Supply - demand aspect: The PE supply - demand pattern has not changed much. In October, the device maintenance volume decreased compared to September, and supply returned to a high level. Overseas PE supply - demand is weak, and import is expected to increase from October to November, intensifying supply pressure. Although it is the traditional peak season, demand recovery is slow, downstream orders are insufficient, and enterprises' willingness to replenish inventory is low. PE inventory, especially LLDPE inventory, is at a high level, and the upstream and mid - stream face great shipment pressure [2]. - Macro aspect: The continuous shutdown of the US government and market concerns about credit risks have increased risk - aversion sentiment in the financial market, putting downward pressure on crude oil. Sino - US trade policies are still uncertain, and if trade frictions escalate, it may lead to further price drops in crude oil and chemical products. The 20th Fourth Plenary Session next week is worth attention, and new stimulus policies may boost market sentiment [2]. 3.1.2 Trading Strategy Recommendations - Near - term trading logic: The market should focus on Sino - US trade frictions and new stimulus policies during the 20th Fourth Plenary Session. It is recommended to wait and see for unilateral trading [7]. - Long - term trading expectation: The supply - demand pressure of PE is difficult to resolve, and the weak pattern is expected to continue [8]. 3.1.3 Industrial Customer Operation Recommendations - Price range forecast for polyethylene: 6800 - 7200, with a current volatility of 8.43% and a historical percentile of 5.8% (3 - year) [13]. - Hedging strategy for inventory management: For enterprises with high finished - product inventory, they can short plastic futures to lock in profits and sell call options to reduce costs [13]. - Hedging strategy for procurement management: For enterprises with low procurement inventory, they can buy plastic futures to lock in procurement costs and sell put options to reduce costs [13]. 3.2 This Week's Important Information and Next Week's Attention Events 3.2.1 This Week's Important Information - Bullish information: The market's concern about the US imposing a 100% tariff on China was alleviated by Trump's signal. A 500,000 - ton LLDPE full - density device of Yulong stopped for 5 days due to a fault [15]. - Bearish information: The risk - aversion sentiment in the financial market led to a continuous decline in crude oil prices [16]. 3.2.2 Next Week's Important Events to Follow - The decline of the plastic market slowed down on Wednesday and Thursday, and the downstream's willingness to buy at the bottom increased, leading to a rapid increase in trading volume [17]. 3.3 Disk Interpretation 3.3.1 Price, Volume, and Fund Interpretation - Unilateral trend and fund movement: In the context of the continuous decline of crude oil, PE prices followed the downward trend. This week, the position increased slightly, and the market's bearish sentiment was strong [22]. - Basis structure: During the decline this week, the spot price weakened following the disk, and the basis strengthened passively [24]. - Spread structure: The spread structure has not changed much recently, and the L1 - 5 spread shows a contango structure [26]. 3.4 Valuation and Profit Analysis - As PE prices continued to be weak, the production profits of all production lines were compressed. The coal - based production line with the best profit is on the verge of losses. PE devices are not sensitive to profit, so short - term losses do not usually cause unexpected shutdowns, resulting in a lack of strong cost support during the price decline [28]. 3.5 Supply - Demand and Inventory Deduction 3.5.1 Supply - Demand Balance Sheet Deduction - With the restart of devices and the commissioning of new production capacity, supply pressure will gradually emerge. After October, imports are expected to increase, further increasing the total PE supply. Although it is the traditional peak season for PE downstream, demand growth is expected to be lower than supply. In October, inventory is expected to change from destocking to stocking rapidly, and the supply - strong and demand - weak pattern will suppress PE prices [34]. 3.5.2 Supply - Side and Deduction - The current PE operating rate is 81.76% (- 2.19%). This week, the device maintenance volume increased slightly. ExxonMobil's 500,000 - ton LDPE device is in the trial - run stage. Overall, the return of maintenance devices and the commissioning of new production capacity in the fourth quarter will lead to continuous high supply pressure [38]. 3.5.3 Import - Export and Deduction - Import: The overseas PE supply - demand pattern is loose, and the price difference between the US and China has dropped to a historical low. It is expected that PE imports will increase from late October to November [41]. - Export: Enterprises' enthusiasm for expanding export channels is high this year, and PE exports have increased even in the off - season, but the overall volume is still small and has little impact on the PE supply - demand pattern [41]. 3.5.4 Demand - Side and Deduction - The average operating rate of PE downstream industries is 42.17% (+ 0.56%). The agricultural film operating rate increased significantly, but the growth is slower than in previous years. Other downstream demand is flat, so the demand - side support for PE is limited [44].