1. Report Industry Investment Rating - The investment rating for the plastics industry is "Oscillating Upward" [1] 2. Core View of the Report - The plastics market is expected to experience a strong oscillation in the near future. It is recommended to switch to buying on dips or engage in a 09 - 01 reverse spread strategy. This is due to factors such as the restart of previously shut - down production facilities, the impact of coal price increases on costs, the current situation of downstream demand, and positive market sentiment driven by government policies [1] 3. Summary by Relevant Catalogs Strategy Analysis - On July 22, the restart of maintenance devices in Zhejiang Petrochemical Phase II LDPE and Shanghai SECCO HDPE led to the plastics operating rate rising to around 87%, currently at a neutral level. The downstream PE operating rate increased by 0.64 percentage points to 38.51% week - on - week. Although the agricultural film is in the off - season with a slight decrease in orders, packaging film orders increased slightly. The overall downstream PE operating rate is still at a relatively low level in recent years. The de - stocking speed of petrochemicals was slow last week, and petrochemical inventory is at a relatively high level in recent years. Due to coal production inspections, coal prices have risen significantly. With new production capacity coming on - stream and the restart of maintenance devices, and considering government policies, it is recommended to buy on dips or engage in a 09 - 01 reverse spread [1] Futures and Spot Market Conditions - **Futures**: The plastics 2509 contract reduced positions and oscillated upward, with a low of 7264 yuan/ton, a high of 7373 yuan/ton, and a final closing price of 7368 yuan/ton, above the 60 - day moving average, up 1.26%. The open interest decreased by 13,406 lots to 394,148 lots [2] - **Spot**: Most of the PE spot market prices rose, with price changes ranging from - 50 to + 50 yuan/ton. LLDPE was reported at 7130 - 7440 yuan/ton, LDPE at 9240 - 9630 yuan/ton, and HDPE at 7660 - 8220 yuan/ton [3] Fundamental Tracking - **Supply**: On July 18, there were few changes in maintenance devices, and the plastics operating rate remained at around 84%, currently at a neutral level [4] - **Demand**: As of the week of July 18, the downstream PE operating rate increased by 0.64 percentage points to 38.51% week - on - week. The agricultural film is in the off - season, with a slight decrease in orders, while packaging film orders increased slightly. The overall downstream PE operating rate is still at a relatively low level in recent years [4] - **Inventory**: Petrochemical early - morning inventory on Tuesday decreased by 30,000 tons to 790,000 tons compared to the previous day, 25,000 tons higher than the same period last year. The de - stocking speed of petrochemicals was slow last week, and petrochemical inventory is at a relatively high level in recent years [4] - **Raw Materials**: The Brent crude oil 09 contract fell to $68/barrel. The price of Northeast Asian ethylene remained flat at $830/ton week - on - week, and the price of Southeast Asian ethylene also remained flat at $820/ton [4]

Group 1 - The U.S. has postponed the deadline for "reciprocal tariffs" to August 1, causing concerns in Taiwan regarding the tax rates to be imposed [1][2] - A report from a survey of 238 companies indicates that over 50% have already felt the direct impact of the proposed tariffs, with more than half predicting a revenue decrease of 10% to 30% if tariffs rise to 20% [1][2] - Small and medium-sized enterprises (SMEs), particularly those with fewer than 50 employees, are expected to be hit hardest, with 35.8% forecasting revenue drops exceeding 30% [1][2] Group 2 - Traditional industries, such as rubber manufacturing, are projected to suffer the most, with over 60% of firms expecting revenue declines of more than 30% if tariffs are implemented [2] - The report aligns with recent statistics from Taiwan's Ministry of Economic Affairs, showing a significant drop in export orders to the U.S. for traditional industries [2] - Although high-tech sectors like electronics have seen an increase in orders, this is attributed to U.S. firms stockpiling, and over 40% of high-tech companies anticipate future revenue declines due to potential tariff expansions [2][4] Group 3 - The report identifies five structural challenges faced by SMEs in Taiwan, including currency volatility and rising industrial electricity prices [3] - Policy recommendations include stabilizing the exchange rate and reviewing energy policies to support affected industries [3] - The potential economic impact of U.S. and Chinese economic downturns on Taiwan's economy is highlighted, with estimates suggesting a 0.29% decline for every 1% drop in the U.S. economy [3] Group 4 - The appreciation of the New Taiwan Dollar has led to significant foreign exchange losses for companies, with one major postal service reporting a loss of 140.3 billion NTD due to currency fluctuations [4][5] - The hospitality sector is also feeling the effects, with hotels reporting decreased revenue due to reduced international tourist arrivals linked to both tariffs and currency appreciation [4][5] - Concerns are raised about the lack of transparency in tariff negotiations, with political implications affecting economic stability and business confidence [5][6]

Core Insights - The third China International Supply Chain Promotion Expo highlighted China's commitment to deepening cooperation in global supply chains amidst the restructuring of global industrial chains [1] - The "Global Supply Chain Promotion Report" presented at the expo emphasized that enhancing global supply chain resilience relies on the synergy of development environment, connectivity, and innovation capabilities [1] - The report introduced a new paradigm for supply chain management, suggesting that resilience is achieved through dynamic balance across the entire supply chain rather than strengthening individual segments [1] Group 1: Supply Chain Resilience - Supply chain vulnerabilities often stem from price fluctuations and supply disruptions, with the futures market emerging as a key tool for risk management [1] - Futures markets provide hedging and basis trading models that help companies build risk management systems to cope with price volatility, thereby enhancing supply chain resilience and promoting international cooperation [2] Group 2: Futures Market Impact - The introduction of lumber futures in November 2024 is expected to provide a fair and authoritative price benchmark for trade and processing enterprises, improving pricing transparency and standardization across the industry [2] - The plastic industry has seen significant changes, with domestic companies increasingly participating in international supply chains, and plastic futures becoming an important pricing benchmark for domestic spot trading [3] - The comprehensive layout of futures for crude oil, fuel oil, and other energy products provides a buffer against price fluctuations, while the launch of carbon lithium futures supports the development of the new energy industry [4] Group 3: Future Outlook - As the international influence of China's futures market grows, domestic companies can leverage price signals from the futures market to secure better conditions in international trade, enhancing competitiveness and promoting deeper integration of global supply chains [5]

Core Viewpoint - The PVC futures market is experiencing a slight decline in prices, with a weekly drop of 1.52%, while the overall supply-demand dynamics remain weak, indicating a potential bottoming phase in the market [1][3][4] Market Performance - As of July 18, 2025, the main PVC futures contract closed at 4937 yuan/ton, with a weekly trading range between 4980 yuan/ton and 5027 yuan/ton, and a lowest point of 4922 yuan/ton [1] - The trading volume increased by 17,071 contracts compared to the previous week [1] Supply and Demand Analysis - The downstream operating rate for PVC decreased by 1.77% to 41.11%, with pipe manufacturing down by 1.83% to 37.67% and profile manufacturing down by 0.2% to 34.55% [2] - PVC social inventory rose by 2.89% to 591,800 tons compared to the previous week, but showed a year-on-year decrease of 7.66% [2] - The production of PVC last week was 466,000 tons, a decrease of 0.37 tons or 0.80% from the previous period, with a capacity utilization rate of 78.62% [3] Institutional Perspectives - Southwest Futures indicates that the PVC market is likely to enter a phase of consolidation due to an oversupply situation, with limited downward potential [3] - Hualian Futures notes that the supply side is facing challenges due to maintenance of production facilities, while demand remains weak, particularly in the real estate sector [4] - The cost side is influenced by the prices of raw materials, with current prices for calcium carbide and ethylene at 4850-4950 yuan/ton and 4900-5100 yuan/ton respectively [3]

Core Insights - The production of primary plastic shapes in Gansu Province reached 584,000 tons in the first four months of 2025, showing a growth of 0.12% compared to the same period in 2024, but the growth rate has slowed down significantly by 10.3 percentage points compared to 2024 [1] - The production accounted for 1.3% of the national output of 46.012 million tons during the same period [1] Monthly Analysis - In April 2025, the production of primary plastic shapes in Gansu Province was 141,000 tons, which represents a decline of 4.61% compared to April 2024, with a decrease in growth rate of 9.1 percentage points compared to the previous year [2] - The April production accounted for 1.2% of the national output of 11.686 million tons for that month [2]

Core Insights - The plastic production in Jiangsu Province for May 2025 was 1.093 million tons, showing a year-on-year decrease of 2.3% and a significant slowdown of 19.2 percentage points compared to the same month last year [1] - For the period from January to May 2025, the total plastic production reached 5.283 million tons, with a slight year-on-year increase of 0.3%, but a decrease of 12.2 percentage points in growth rate compared to the previous year [3] Monthly Production Analysis - In May 2025, Jiangsu's plastic production accounted for 9.2% of the national total of 11.90 million tons, indicating a decline in both production and growth rate compared to national figures [1] - The cumulative production from January to May 2025 represented 9.1% of the national total of 58.098 million tons, reflecting a similar trend of reduced growth compared to national averages [3] Historical Context - The term "primary plastic" was previously referred to as "plastic resin and copolymers" before 2004, indicating a long-standing classification in the industry [4] - Since 2011, the threshold for large-scale industrial enterprises in China has been raised from an annual main business income of 5 million yuan to 20 million yuan, impacting industry statistics and classifications [4]

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]