1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints of the Report - The overall supply - demand pattern of PP remains unchanged, with downstream order cycles shortening and PP's rebound being blocked. It is expected that PP will show a weak and volatile trend. Due to the possibility of new PP production capacity coming on - stream this year and the gradual end of the agricultural film peak season, the L - PP spread is expected to decline [1] 3. Summary by Relevant Catalogs 3.1 Market Analysis - As of the week of December 19, the downstream PP operating rate decreased by 0.19 percentage points to 53.80% week - on - week, at a relatively low level in the same period over the years. Among them, the operating rate of plastic weaving, the main downstream of drawstring, decreased by 0.06 percentage points to 44.00% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [1] - On December 19, there were little changes in maintenance devices. The PP enterprise operating rate remained at around 83%, at a moderately low level, and the production ratio of standard drawstring dropped to around 27% [1][4] - Recently, the destocking of petrochemicals has been slow, and the current petrochemical inventory is at a relatively high level in the same period in recent years [1][4] - On the cost side, some previously faulty oil fields in Iraq have resumed production. The US is still striving to promote peace talks between Russia and Ukraine, and Ukraine has made certain compromises on security guarantees. The cracking spread of refined oil products in Europe and the US has been continuously falling, and the crude oil price has declined [1] - In terms of supply, the new 400,000 - ton/year capacity of PetroChina Guangxi Petrochemical was put into operation in mid - October. Recently, the number of maintenance devices has increased slightly. The downstream is at the end of the peak season, orders for plastic weaving continue to decline, the price of BOPP film has stabilized after a decline, the market lacks large - scale centralized procurement, which has limited support for the market, and traders generally offer discounts to stimulate transactions [1] 3.2 Futures and Spot Market Conditions Futures - The PP2605 contract increased positions and oscillated downward, with a minimum price of 6,200 yuan/ton, a maximum price of 6,273 yuan/ton, and finally closed at 6,213 yuan/ton, below the 20 - day moving average, with a decline of 1.24%. The position increased by 10,464 lots to 533,959 lots [2] Spot - The spot prices of PP in various regions mostly declined. The drawstring was reported at 5,960 - 6,280 yuan/ton [3] 3.3 Fundamental Tracking - On the supply side, on December 19, there were little changes in maintenance devices. The PP enterprise operating rate remained at around 83%, at a moderately low level, and the production ratio of standard drawstring dropped to around 27% [4] - On the demand side, as of the week of December 19, the downstream PP operating rate decreased by 0.19 percentage points to 53.80% week - on - week, at a relatively low level in the same period over the years. Among them, the operating rate of plastic weaving, the main downstream of drawstring, decreased by 0.06 percentage points to 44.00% week - on - week, and plastic weaving orders continued to decline slightly, slightly lower than the same period last year [4] - The early petrochemical inventory on Friday decreased by 10,000 tons to 660,000 tons week - on - week, 75,000 tons higher than the same period last year. Recently, the destocking of petrochemicals has been slow, and the current petrochemical inventory is at a relatively high level in the same period in recent years [4] - For the raw material crude oil, the Brent crude oil 03 contract fell below $60/barrel, and the CFR propylene price in China decreased by $5/ton to $740/ton week - on - week [4]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - PE faces continuous supply pressure with high - level supply, limited planned maintenance, and new device production expectations. Demand is weakening, inventory is accumulating, and cost support from oil is decreasing, making it difficult to have substantial improvement in the short - term [2] - PP's supply pressure is expected to be less than PE's. Although supply may increase slightly, there could be supply reduction due to high costs. Demand is generally weak, with only BOPP providing some support. Inventory remains high, and cost support has weakened, with limited short - term rebound drivers [3] Summary by Directory 1. Market News and Important Data - **Price and Basis**: The closing price of the L main contract is 6,476 yuan/ton (-3), and the PP main contract is 6,279 yuan/ton (+25). LL North China spot is 6,420 yuan/ton (-30), LL East China spot is 6,410 yuan/ton (-170), and PP East China spot is 6,210 yuan/ton (+10). LL North China basis is -56 yuan/ton (-27), LL East China basis is -66 yuan/ton (-167), and PP East China basis is -69 yuan/ton (-15) [1] - **Upstream Supply**: PE's开工率 is 83.9% (-0.2%), and PP's开工率 is 79.4% (+1.1%) [1] - **Production Profit**: PE's oil - based production profit is 300.0 yuan/ton (-58.7), PP's oil - based production profit is -320.0 yuan/ton (-58.7), and PDH - made PP production profit is -715.6 yuan/ton (-1.5) [1] - **Imports and Exports**: LL's import profit is 46.6 yuan/ton (+146.6), PP's import profit is -269.8 yuan/ton (-1.7), and PP's export profit is -11.9 dollars/ton (+0.2) [1] - **Downstream Demand**: PE's downstream agricultural film开工率 is 45.2% (-1.2%), PE's downstream packaging film开工率 is 49.0% (-0.6%), PP's downstream plastic weaving开工率 is 44.0% (-0.1%), and PP's downstream BOPP film开工率 is 63.2% (+0.3%) [1] 2. Market Analysis - **PE**: Supply is high, demand is weakening, inventory pressure is large, and cost support is decreasing, with no short - term substantial improvement expected [2] - **PP**: Supply pressure is less than PE, but demand is weak, inventory is high, cost support has weakened, and short - term rebound drivers are limited [3] 3. Strategy - **Single - side**: Cautiously short - sell LLDPE on rallies for hedging; wait and see on PP, which is expected to fluctuate weakly at the bottom in the short term [4] - **Inter - period**: Not provided [4] - **Inter - variety**: Short the spread of L05 - PP05 on rallies [4]

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - Polyolefin production is expected to be low in the first half and high in the second half of 2026, with the overall supply growth rate slowing down, but the high - growth demand is also difficult to maintain. PE and PP may continue to "squeeze imports, increase exports" and compress the profits of each process to maintain the low operation of existing plants, achieving a balance between supply and demand in the fundamentals, and the price trend is expected to be weakly volatile [2]. - The supply pattern is still in an over - supply situation. Although the new production capacity in 2026 is less than that in 2025, the effective production capacity center continues to rise, and the inventory production capacity load needs to be carefully released. The demand growth rate is expected to return to the historical average range, and the overall pattern of PE and PP remains over - supplied [57][59]. 3. Summary According to the Directory 2025 Polyolefin Trend Review - In 2025, the prices of plastics and polypropylene showed a continuous downward trend. The main reasons were the accelerated expansion of PE and PP production capacity, which led to an excessive supply growth rate that the demand side could not match, and the decline in the prices of raw materials such as crude oil, coal, and light hydrocarbons [6]. - The large - scale production cycle of polyolefins started in 2019 - 2020. The rapid promotion of the propane dehydrogenation (PDH) process promoted the accelerated release of PP production capacity. In 2025, the production capacity of PE increased by 463 tons, and that of PP increased by 441 tons [8][9]. - The cost side was also a factor affecting the price. The global crude oil market shifted from tight balance to surplus, and the coal price fluctuated. The impact of trade frictions on the cost was limited, and the market was more inclined to trade the logic of weakening demand for plastic product exports [12]. 2026 Polyolefin Supply - Demand Outlook Supply Side - **New Production Capacity**: The release of new ethylene cracking production capacity may continue until the end of 2026. In 2026, the new production capacity of PE and PP is expected to be released in a pattern of low in the first half and high in the second half. The new production capacity of PE is about 550 tons, and the effective production capacity growth rate is 11%. The new production capacity of PP is about 435 tons, and the effective production capacity growth rate is 6.7% [20][21][22]. - **Existing Plant Operation**: The profit and operation center of polyolefins have shown a downward trend in the past four years. In 2026, the overall supply elasticity of PE is limited, while the supply elasticity of PP is more obvious, especially the PDH process, and the load of PDH plants needs to be continuously tracked [23][28][32]. Import and Export - **PE**: In 2025, domestic production squeezed imports. In 2026, the actual number of overseas projects that can be put into production may be small, and the import pressure is expected to still come from the Middle East and the United States. The overall import is expected to maintain a squeezed pattern, and the net import may continue to decline by about 1 million tons [33][37][57]. - **PP**: In 2025, the export center of PP increased significantly, and it achieved a phased net - export pattern. In 2026, the overseas production is expected to be concentrated in South Asia, and the export may continue to increase, with the possibility of turning into a net - export pattern throughout the year [39]. Demand Side - **Product Exports**: In 2025, from January to October, the export amount of plastic products in China decreased slightly year - on - year. The exports to the United States decreased significantly, while the exports to non - US markets mostly increased positively. In 2026, the traditional demand momentum is insufficient, but the emerging economies will support the export of plastic products to maintain resilience [43][45][46]. - **Domestic Demand**: In 2025, the apparent demand growth rate of polyolefins was high, but there were many influencing factors. In 2026, the terminal demand of polyolefins may continue to differentiate, and the high - growth rate of demand is difficult to maintain, with the demand growth rate expected to drop to the range of 3 - 5.5% [47][54][57]. Summary and Investment Outlook - In 2026, the production capacity release of PE and PP is in a pattern of low in the first half and high in the second half. The domestic production growth rate is still high, and the overall supply growth rate of PE is about 5.4%. The demand growth rate is expected to drop to 3 - 5.5%, and the overall pattern is still over - supplied. The supply growth rate of PP is about 3.8%, and the demand side may match the supply growth [57][58][59]. - PE and PP may continue to "squeeze imports, increase exports" and compress process profits to maintain low operation of existing plants to achieve supply - demand balance. The price is expected to be weakly volatile. Pay attention to the logistics changes of imports and exports and the supply elasticity of marginal plants such as PDH [59][60].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The plastic supply-demand pattern remains unchanged, the trading atmosphere is weak, and the plastic is expected to fluctuate weakly in the near term. Due to the possible new plastic production capacity coming on stream this year and the phasing out of the peak season for agricultural films, the L-PP spread is expected to decline [1]. Summary by Relevant Catalogs Market Analysis - On December 18, new maintenance devices such as Qilu Petrochemical's LDPE line were added, and the plastic operating rate dropped to around 85%, currently at a neutral level. As of the week ending December 12, the downstream operating rate of PE decreased by 0.76 percentage points to 43.00% week-on-week. Agricultural film is gradually exiting the peak season, with orders continuing to decline and raw material inventory dropping again. Packaging film orders also decreased slightly. The overall downstream operating rate of PE is still at a relatively low level in the same period in recent years. Recently, the destocking of petrochemicals has been slow, and the current petrochemical inventory is at a relatively high level in the same period in recent years. The cost of crude oil has decreased. There are new plastic production capacities coming on stream. The demand in the north has decreased, and downstream enterprises have insufficient purchasing willingness. The plastic market is expected to fluctuate weakly, and the L-PP spread is expected to decline [1]. Futures and Spot Market Conditions - Futures: The plastic 2605 contract increased in position and fluctuated. The lowest price was 6,475 yuan/ton, the highest was 6,545 yuan/ton, and it finally closed at 6,476 yuan/ton, below the 60-day moving average, with a decline of 0.54%. The position increased by 21,649 lots to 561,776 lots [2]. - Spot: Most of the PE spot market declined, with price changes ranging from -100 to +0 yuan/ton. LLDPE was reported at 6,350 - 6,570 yuan/ton, LDPE at 8,000 - 8,680 yuan/ton, and HDPE at 6,770 - 7,940 yuan/ton [3]. Fundamental Tracking - Supply: On December 18, new maintenance devices such as Qilu Petrochemical's LDPE line were added, and the plastic operating rate dropped to around 85%, currently at a neutral level [4]. - Demand: As of the week ending December 12, the downstream operating rate of PE decreased by 0.76 percentage points to 43.00% week-on-week. Agricultural film is gradually exiting the peak season, with orders continuing to decline and raw material inventory dropping again. Packaging film orders also decreased slightly. The overall downstream operating rate of PE is still at a relatively low level in the same period in recent years [4]. - Inventory: On Thursday, the early petrochemical inventory decreased by 30,000 tons to 670,000 tons week-on-week, 60,000 tons higher than the same period last year. Recently, the destocking of petrochemicals has been slow, and the current petrochemical inventory is at a relatively high level in the same period in recent years [4]. - Raw Materials: The Brent crude oil 03 contract fell below $60/barrel. The price of ethylene in Northeast Asia remained flat at $725/ton week-on-week, and the price of ethylene in Southeast Asia remained flat at $745/ton week-on-week [4].

Group 1 - The core viewpoint of the article is that Hitec (301022.SZ) has stated that its modified plastic products currently do not have applications in the aviation sector [1] Group 2 - The company communicated this information through an investor interaction platform [1]

1. Report Industry Investment Rating - Not provided 2. Core Viewpoints of the Report - The overall supply - demand pattern of PP remains unchanged, with a light spot trading atmosphere. It is expected that the upward space of PP will be limited in the near future. Due to the possibility of new PP production capacity coming on - stream this year and the gradual exit of the agricultural film peak season, the L - PP spread is expected to narrow [1] 3. Summary by Relevant Catalogs 3.1 Market Analysis - As of the week ending December 12, the downstream operating rate of PP increased by 0.06 percentage points to 53.99% week - on - week, at a relatively low level in the same period over the years. However, the operating rate of plastic weaving, the main downstream of drawstring, decreased by 0.04 percentage points to 44.06% week - on - week, and plastic weaving orders continued to decline slightly week - on - week, slightly lower than the same period last year [1] - On December 17, there were few changes in maintenance units, the operating rate of PP enterprises remained at around 84%, at a neutral level, and the production ratio of standard drawstring remained at around 24% [1] - Recently, the de - stocking of petrochemicals has been slow, and the current petrochemical inventory is at a relatively high level in the same period in recent years [1] - On the cost side, some previously faulty oil fields in Iraq have resumed production. The US is still actively promoting peace talks between Russia and Ukraine, and Ukraine has made certain compromises on security guarantees. The crack spread of refined oil products in Europe and the US has continued to decline, and the crude oil price has dropped [1] - In terms of supply, the new 400,000 - ton/year production capacity of PetroChina Guangxi Petrochemical was put into operation in mid - October. Recently, the number of maintenance units has slightly decreased. The downstream is at the end of the peak season, orders for plastic weaving continue to decline, the price of BOPP film has dropped again, the market lacks large - scale centralized procurement, which has limited boost to the market, and traders generally offer discounts to stimulate transactions [1] 3.2 Futures and Spot Market Quotes Futures - The PP2605 contract increased in positions and fluctuated. The lowest price was 6,226 yuan/ton, the highest price was 6,275 yuan/ton, and it finally closed at 6,254 yuan/ton, below the 20 - day moving average, with a gain of 0.05%. The position increased by 21,552 lots to 519,494 lots [2] Spot - The spot prices of PP in most regions declined. The drawstring was quoted at 5,980 - 6,280 yuan/ton [3] 3.3 Fundamental Tracking Supply - On December 17, there were few changes in maintenance units, and the operating rate of PP enterprises remained at around 84%, at a neutral level [4] Demand - As of the week ending December 12, the downstream operating rate of PP increased by 0.06 percentage points to 53.99% week - on - week, at a relatively low level in the same period over the years. However, the operating rate of plastic weaving, the main downstream of drawstring, decreased by 0.04 percentage points to 44.06% week - on - week, and plastic weaving orders continued to decline slightly week - on - week, slightly lower than the same period last year [4] Inventory - On Wednesday, the early petrochemical inventory decreased by 20,000 tons to 700,000 tons week - on - week, 80,000 tons higher than the same period last year. Recently, the de - stocking of petrochemicals has been slow, and the current petrochemical inventory is at a relatively high level in the same period in recent years [4] 3.4 Raw Material End - Crude Oil - The Brent crude oil 03 contract fell below $60/barrel, and the CFR propylene price in China remained flat at $745/ton week - on - week [6]

Core Viewpoint - The company indicates that the impact of oil price fluctuations on different raw materials is structural, with varying degrees of correlation to oil prices depending on the type of plastic used in production [1] Group 1: Raw Material Price Impact - The prices of petroleum-based general plastics (such as PP and PS) are highly correlated with oil prices, while the prices of engineering plastics, specialty engineering plastics, and various additives are primarily determined by technical barriers and market supply and demand, showing weaker linkage to oil prices [1] - The company has established a mature pricing mechanism to respond to raw material price fluctuations, allowing for timely adjustments in product pricing based on changes in raw material costs [1] Group 2: Product Customization and Profitability - As modified plastics are customized products, the company can negotiate price adjustments with customers in response to raw material cost changes, effectively transmitting cost pressures and ensuring stable profitability [1] - The company possesses stronger bargaining and cost transfer capabilities, particularly in the high-tech, high-value-added fields of modified engineering plastics and modified specialty engineering plastics [1] Group 3: Product Structure Optimization - The company has been continuously optimizing its product structure, with a steady increase in the sales proportion of engineering plastics, which further enhances the stability and resilience of the company's overall profitability [1] - This optimization allows the company to effectively manage the impact of raw material fluctuations on gross margins [1]

Report Industry Investment Rating No relevant information provided Report's Core View The overall supply - demand pattern of plastics remains unchanged with a weak trading atmosphere. The upward space of plastics in the near future is expected to be limited. Due to the possible new plastic production capacity coming on - stream this year and the gradual end of the peak season for agricultural films, the L - PP spread is expected to decline [1] Summary by Related Catalogs Market Analysis - On December 16, new maintenance devices such as the second phase of HDPE of Zhonghan Petrochemical were added, and the plastic operating rate dropped to around 87%, at a neutral level. As of the week ending December 12, the downstream operating rate of PE decreased by 0.76 percentage points to 43.00% week - on - week. Agricultural film orders continued to decline, and the overall downstream operating rate of PE remained at a relatively low level in the same period in recent years. Petrochemical inventory is at a relatively high level in the same period in recent years. The cost of crude oil has decreased. There is new plastic production capacity put into operation, and it is expected that the downstream operating rate will decline. Downstream enterprises have insufficient purchasing willingness, and traders are cautious about the future market, so plastics' upward space is limited [1] Futures and Spot Market Conditions - Futures: The plastic 2605 contract increased positions and fluctuated, closing at 6543 yuan/ton, down 0.50%. The position increased by 21355 lots to 510143 lots [2] - Spot: Most of the PE spot market declined, with a price change range of - 200 to + 100 yuan/ton. LLDPE was reported at 6400 - 6620 yuan/ton, LDPE at 8050 - 8780 yuan/ton, and HDPE at 6770 - 7940 yuan/ton [3] Fundamental Tracking - Supply: On December 16, the change in maintenance devices was small, and the PP enterprise operating rate remained at around 84%, at a neutral level [4] - Demand: As of the week ending December 12, the downstream operating rate of PE decreased by 0.76 percentage points to 43.00% week - on - week. Agricultural film orders continued to decline, and the overall downstream operating rate of PE remained at a relatively low level in the same period in recent years [4] - Inventory: On Tuesday, the petrochemical early - morning inventory decreased by 30,000 tons to 720,000 tons week - on - week, 65,000 tons higher than the same period last year. Petrochemical inventory is at a relatively high level in the same period in recent years [4] - Raw materials: The Brent crude oil 02 contract fell to $60/barrel. The price of Northeast Asian ethylene remained flat at $725/ton week - on - week, and the price of Southeast Asian ethylene remained flat at $745/ton week - on - week [4]

Group 1 - The company's photovoltaic POE film masterbatch revenue is expected to increase by 446% year-on-year in Q3 2025, with a gross margin of 42% [2] - The new Chuzhou project, with a capacity of 50,000 tons, is anticipated to commence production in Q1 2026, which will enhance the proportion of the photovoltaic business in total revenue [2] - The company's main products include color masterbatches, white masterbatches, black masterbatches, and functional masterbatches, which are widely used in various plastic products across multiple industries [2] Group 2 - The company is currently in the construction phase of the Chuzhou subsidiary investment project, which will adopt a customized order production model upon completion [2] - The company acknowledges potential risks such as intensified industry competition, fluctuations in raw material prices, and lower-than-expected market demand [2]

Report Overview - The report is a weekly report on polyolefins by Guotai Junan Futures, covering the plastic and polypropylene sectors, including price, supply, demand, and inventory analysis [1][3] 1. Report Industry Investment Rating - Not provided in the report 2. Report Core Viewpoints Plastic - The price of plastic is under pressure due to the expected increase in supply and decrease in demand at the end of the year, with a recommended strategy of shorting on rebounds [5] Polypropylene - The price of polypropylene is also under pressure in the off - season, with a recommended strategy of shorting on rebounds [94][96] 3. Summary by Directory Plastic Part Price & Spread - Domestic and foreign prices of PE have generally declined, with the Chinese CIF price down by $5 - 10. The import window has compressed, and the LD import profit is at a relatively high level this year [9][19] - The production profit of PE has been compressed, with the profit of ethylene procurement significantly reduced recently, while the profits of MTO, coal - based, and naphtha - based production have slightly improved [40] Supply - The total effective capacity growth rate is 16%, and the domestic production growth rate is 18%. Although the import has declined year - on - year, the supply is still loose. The subsequent maintenance scale is expected to decline, and the supply is expected to increase in December [5] Demand & Inventory - The demand for PE is weak. The agricultural film start - up rate has continued to decline, and the demand from other downstream industries is also expected to decrease slightly. The inventory removal is not smooth, with the upstream inventory accumulating slightly and the social inventory decreasing slightly [5] Polypropylene Part Price & Spread - The domestic and foreign prices of PP have declined. The CIF price in China has rebounded and then declined. The import window is approaching closure [100][110] - The overall profit of PP production has been compressed, with the PDH and propylene - based production valuations being the most significantly compressed, while the coal - based process profit has slightly improved [130] Supply - The total effective capacity growth rate is 12.7%, and the estimated annual production growth rate is 16.7%. The end - of - year planned maintenance volume is declining, and the supply center is high. The subsequent maintenance scale is expected to decline, and the supply is expected to increase [94] Demand & Inventory - The downstream start - up of PP is temporarily stable, but the orders of some industries are seasonally weakening. The inventory removal is not smooth, and the inventory is higher than the same period last year [95][96]