Report Industry Investment Rating - Not provided in the given content Core Viewpoints - South Korea's petrochemical industry has an expectation of capacity reduction in naphtha cracking, and the propylene futures price rebounded under the boost of macro - sentiment. South Korea's propylene capacity accounts for 6% of the global total, and from January to July this year, China imported 863,000 tons of propylene from South Korea, accounting for 67.6% of total imports, so South Korea's capacity reduction may support overseas propylene prices [2]. - From the supply - demand fundamentals, the maintenance of major PDH units and PO units has an impact on the supply. After the positive effect of maintenance weakens, the price drops from a high level, and the downstream restocking enthusiasm increases. With the restart of some PDH units and the release of new capacity, the supply is still relatively loose. The downstream start - up rates show a mixed trend, and the short - term demand support is limited. The cost support has recovered with the rebound of crude oil prices [2]. Summary by Related Catalogs 1. Propylene Basis Structure - The propylene basis structure involves figures such as the closing price of the propylene main contract, the East China basis, the North China basis, the 01 - 05 contract, the East China market price, and the Shandong market price [7][10][12] 2. Propylene Production Profit and Capacity Utilization Rate - It includes figures like the difference between China CFR propylene and Japan CFR naphtha, propylene capacity utilization rate, PDH production gross profit, PDH capacity utilization rate, MTO production gross profit, methanol - to - olefins capacity utilization rate, propylene naphtha cracking production gross profit, and crude oil refinery capacity utilization rate [18][25][30] 3. Propylene Import and Export Profit - It is related to figures such as the difference between South Korea FOB and China CFR, Japan CFR and China CFR, Southeast Asia CFR and China CFR, and propylene import profit [34][38] 4. Propylene Downstream Profit and Capacity Utilization Rate - It covers figures of production profit and capacity utilization rate of PP powder, propylene oxide, n - butanol, octanol, acrylic acid, acrylonitrile, and phenol - acetone [41][43][46] 5. Propylene Inventory - It includes figures of propylene in - plant inventory and PP powder in - plant inventory [68] Strategies - Unilateral: Wait and see; Cross - period: None; Cross - variety: None [3]

Group 1 - The chemical sector is experiencing a rise in opening prices, with institutions indicating that the "anti-involution" trend may lead to a recovery in chemical industry prosperity, benefiting leading companies [1] - Key factors for potential investment opportunities in the chemical industry include stricter new project approvals, the positive impact of old facility renovations, attempts at industry self-discipline, and rising energy consumption standards [1] - As of August 21, 2025, the CSI Sub-Industry Chemical Theme Index (000813) increased by 1.25%, with notable stock performances including: Nucor Titanium (002145) up 8.76%, Rongsheng Petrochemical (002493) up 5.24%, and Dongfang Shenghong (000301) up 3.24% [1] Group 2 - The Chemical ETF (159870) closely tracks the CSI Sub-Industry Chemical Theme Index, which consists of seven sub-indices reflecting the overall performance of listed companies in related sub-industries [2] - As of July 31, 2025, the top ten weighted stocks in the CSI Sub-Industry Chemical Theme Index (000813) accounted for 43.54% of the index, including companies like Wanhua Chemical (600309) and Yilong Co. (000792) [2]

Report Summary 1. Report Industry Investment Rating - The trend strength of p-xylene, PTA, and MEG is rated as "1", indicating a "slightly strong" outlook [6]. 2. Core Views of the Report - PX: With a significant reduction in overnight crude oil inventories and a strong rebound in oil prices, the short - term downside space for PX's unilateral price may be limited. Supported by cost and with improved demand expectations, and a tight supply - demand pattern, the unilateral price of PX is expected to rebound. For the spread, focus on the 11 - 01 positive spread. The PX - naphtha valuation is at a moderately high level, with a tight supply - demand pattern in September and downward pressure on PXN after the 01 contract [6]. - PTA: Cost support is strong, and the 9 - 1 reverse spread should be held. With an improvement in terminal textile and clothing demand and a bottom - up rebound in polyester operating rates, the unilateral price of PTA is strong. The price and basis strengthened yesterday, and the downstream's willingness to hold goods increased [7]. - MEG: With a decrease in imports and arrivals and marginal destocking, the unilateral price of MEG is strong. The reduction of naphtha cracking capacity by the South Korean petrochemical group has disrupted the market sentiment of olefin - related products. Domestically, plants are operating at full capacity, imports are low, inventories are decreasing, and polyester operating rates are rising. In the short - term, a bullish view is maintained. In the long - term, the supply pressure of new plants in the 01 contract will limit the upside [7]. 3. Summary by Related Catalogs Market Dynamics - PX: The naphtha price rose at the end of the session. On the 20th, PX prices increased, with two October Asian spot transactions at $839 and $838, and one November Asian spot at $836. The PX valuation on the 20th was $837/ton, up $2 from the 19th. There were concerns about weak PX spot prices due to over - capacity in China, but hopes are placed on winter demand for polyester clothing [2][3]. - PTA: On the 20th, the PTA spot price remained at 4,690 yuan/ton, with a mainstream basis of 09 - 2 [5]. - MEG: South Korean petrochemical companies will cut capacity and restructure. A 750,000 - ton/year MEG plant in Malaysia has restarted, and there were tender transactions on the 20th [5]. - Polyester: The sales of polyester yarn in Jiangsu and Zhejiang on the 20th declined overall, with individual differences. The average sales volume was estimated to be slightly below 70%. The sales of direct - spun polyester staple fiber were generally average, with an average sales volume of 57% as of 3:00 pm [5][6]. Futures and Spot Data | Product | Futures Yesterday's Closing Price | Futures Change | Futures Change Rate | Spot Yesterday's Price | Spot Change | Spot Processing Fee Yesterday | Spot Processing Fee Change | | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | | PX | 6,844 | 6774 | 1.03% | $838/ton | $2.83 | 255.5 | 2.5 | | PTA | 4,778 | 44 | 0.93% | 4,686 yuan/ton | - 4 | 197.31 | - 10.67 | | MEG | 4,477 | 53 | 1.20% | 4,502 yuan/ton | 47 | - | - | | PF | 6,504 | 72 | 1.12% | - | - | - | - | | SC | 482.8 | - 1.4 | - 0.29% | - | - | - | - |

Group 1 - The Taiwanese government faces a significant increase in tariffs, with a new 20% tariff on top of existing rates, leading to a potentially disastrous "20%+N" tax burden on local industries [1][2] - Key sectors such as textiles, petrochemicals, steel, and machine tools are expected to be severely impacted, with the machine tool industry facing a combined tax rate of 24.7%, exacerbating competitive disadvantages against South Korean and Japanese products [2][3] - The Taiwanese government's response includes a commitment to increase investment in the U.S. by $400 billion, which is equivalent to half of Taiwan's annual GDP, indicating a willingness to spend taxpayer money to appease U.S. demands [2][3] Group 2 - The Taiwanese administration's approach of yielding to U.S. demands has not resulted in favorable outcomes, instead leading to increased pressure and unfavorable treatment compared to other trade partners [1][3] - The lack of transparency in negotiations, with claims of confidentiality, raises concerns about the effectiveness of the talks and the potential negative implications for Taiwan's economy [2] - The ongoing reliance on U.S. support while neglecting to strengthen cross-strait relations may lead to further economic challenges for Taiwan, as the government continues to pursue a confrontational stance against mainland China [3]

Summary of Key Points from the Conference Call Industry Overview - The petrochemical industry is facing challenges such as declining product prices, intense competition, and anti-dumping lawsuits, prompting the government to implement measures for capacity assessment, elimination of redundant facilities, and technological upgrades to promote energy conservation and carbon reduction [1][2][3] Core Insights and Arguments - The petrochemical industry's profits have been declining, with total revenue projected at 14.6 trillion yuan in 2024, but profits falling below 1 trillion yuan, continuing a downward trend of 8.8% in 2025 [2][25] - A capacity warning report identified 14 high-risk products, including refining, propylene, and PVC, and 10 products with relatively high risk, such as soda ash and ethylene glycol, indicating structural overcapacity issues [3][4] - Private enterprises are better positioned for transformation in the petrochemical sector due to advanced technology and willingness to invest in energy-saving modifications, while state-owned enterprises face greater pressure to upgrade outdated facilities [5][10] - New capacity additions before the carbon peak include an increase of 40 million tons in primary refining capacity, which is aligned with advanced technology and will not lead to overcapacity [6][10] - The development of the petrochemical industry chain relies heavily on policy guidance and downstream market demand, with emerging markets like pharmaceuticals and renewable energy driving growth in biodegradable materials and photovoltaic materials [10][12] Additional Important Content - The petrochemical industry is experiencing structural overcapacity, particularly in low-end bulk products, while mid-to-high-end products remain scarce and reliant on imports [7][8] - The need for upgrading old facilities is critical, especially in traditional refining and caustic soda plants, many of which are over 20 years old [9] - The government is encouraging the elimination of outdated capacity and extending the industrial chain into new materials, with a focus on market-driven development rather than strict regulatory measures [17][27] - The petrochemical sector's future planning must balance specific development directions with market demand to avoid misleading the market and causing overcapacity [18] - The overall profitability of the petrochemical industry is under pressure, with a reported profit decline of 2.3% in the first half of the year and an 8.8% decline the previous year [25] Conclusion - The petrochemical industry is at a critical juncture, facing both challenges and opportunities for transformation. The emphasis on technological upgrades, market responsiveness, and policy support will be essential for navigating the current landscape and achieving sustainable growth.

Report Summary 1. Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Viewpoints - 8 - 9月受韩国纯苯装置检修影响，我国进口端纯苯供应预计下降，国内供需双增，8 - 9月纯苯供需格局有所好转，但隐性库存高企且终端需求不佳，短期基本面改善有限，需观察后续传统需求旺季是否带来需求增量 [3] - 苯乙烯近端价格低，下游工厂抄底意愿增强，原料补库基本结束，后续出口端有需求增量，8 - 9月苯乙烯供应过剩程度减轻 [3] - 当前苯乙烯绝对价格处于近几年历史低位且旺季预期无法证伪，短期单边谨慎做空，品种间可关注苯乙烯大装置落地时间，考虑逢高做缩纯苯苯乙烯价差 [3] - 今日受原料端供应缩量消息影响，午后化工板块整体偏强运行 [3] 3. Content Summaries by Directory 3.1 Price Forecast and Hedging Strategies - **Price Forecast**: The predicted monthly price range for pure benzene is 5800 - 6400 yuan/ton, and for styrene is 7000 - 7600 yuan/ton. The current 20 - day rolling volatility of styrene is 29.40%, and its historical percentile over 3 years is 85.8% [3] - **Hedging Strategies for Styrene** - **Inventory Management**: When finished - product inventory is high and worried about price decline, short 25% of styrene futures (EB2510) at 7350 - 7400 yuan/ton and sell 50% of call options (EB2510C7500) at 75 - 90 to lock in profits and reduce costs [3] - **Procurement Management**: When procurement inventory is low, buy 50% of styrene futures (EB2510) at 7150 - 7200 yuan/ton and sell 75% of put options (EB2510P7100) at 90 - 110 to lock in procurement costs [3] 3.2 Core Contradictions - For pure benzene, supply from imports is expected to decline due to South Korean plant maintenance, but high hidden inventory and poor terminal demand limit short - term improvement in fundamentals [3] - For styrene, downstream restocking is mostly completed, and there is expected demand growth in exports, reducing the supply surplus in August - September [3] 3.3利多解读 - Recent downstream projects of pure benzene have been put into production, improving the supply - demand pattern [6] - As of August 18, the port inventory of pure benzene in Jiangsu decreased by 1.37% compared to the previous period, with visible inventory gradually decreasing [6] - There are many rumors of styrene exports, with expected demand growth in the export market [6] - The return of multiple maintenance devices in the EPS and PS industries, especially EPS, has led to a significant increase in the operating rate and demand for styrene [6] - South Korean petrochemical companies will cut naphtha cracking capacity by up to 3.7 million tons annually [6] 3.4利空解读 - New styrene production capacity is starting to show, with two large - scale styrene plants in Jilin Petrochemical and Guangxi Petrochemical to be put into operation in September and October, ensuring sufficient supply [7] - As of August 18, 2025, the port inventory of styrene in Jiangsu increased by 1.27 million tons (8.53%) compared to the previous period [7] - The production schedule of three major white - goods in late July shows poor production plans, leading to a pessimistic outlook for styrene terminal consumption in the third quarter [7] 3.5 Basis and Spread Data - **Basis Changes**: The basis of pure benzene and styrene shows different degrees of daily changes, with styrene basis generally decreasing [8] - **Spread Changes**: The spreads within the pure benzene - styrene industrial chain, including spot - paper goods spreads and styrene - pure benzene spreads, also show certain daily changes [9] 3.6 Industrial Chain Price Data - The prices of various products in the pure benzene - styrene industrial chain, such as crude oil, naphtha, ethylene, pure benzene, and styrene, show different daily and weekly changes [9][10] - The profits of different products in the industrial chain, including pure benzene production profit, styrene integration profit, and downstream product profits, also vary [9][10]

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints - Supply side: PE production last week increased 0.14% to 661,100 tons, and capacity utilization rose 1.1% to 86.82%. With the impact of shutdown devices expanding, this week's PE production and capacity utilization are expected to decline [2]. - Demand side: PE downstream product average开工率 increased 0.4% last week, with the agricultural film开工率 up 0.8%. The agricultural film is transitioning to the peak season, with greenhouse film orders gradually accumulating, and food and daily - chemical packaging film having sporadic orders, mainly for rigid demand. Overall, PE demand is seasonally increasing [2]. - Inventory: Production enterprise inventory decreased 13.76% to 444,500 tons, and social inventory decreased 1.22% to 568,700 tons, with low overall inventory pressure [2]. - Cost: The situation of strong supply and weak demand for crude oil continues, and positive signals from Russia - Ukraine peace talks are continuously released. International oil prices are expected to fluctuate weakly [2]. - Technical analysis: For the L2601 daily K - line, pay attention to the support around 7,230 yuan/ton and the pressure around 7,400 yuan/ton [2]. 3. Summary by Relevant Catalogs 3.1 Futures Market - Futures prices: The closing price of the main polyethylene futures contract is 7,347 yuan/ton, up 40 yuan/ton. The 9 - 1 spread is - 39, unchanged [2]. - Trading volume and open interest: The trading volume is 400,529 lots, and the open interest is 381,563 lots, an increase of 21,423 lots [2]. - Top 20 positions: The buy order volume is 316,320 lots, an increase of 12,132 lots; the sell order volume is 342,353 lots, an increase of 9,715 lots; the net buy order volume is - 26,033 lots, an increase of 2,417 lots [2]. 3.2 Spot Market - LLDPE prices: The average price of LLDPE (7042) in North China is 7,291.3 yuan/ton, down 12.61 yuan/ton; in East China, it is 7,380 yuan/ton, down 8.57 yuan/ton [2]. - Basis: The basis is - 15.7, up 14.39 [2]. 3.3 Upstream Situation - Naphtha prices: The FOB middle - price of naphtha in Singapore is 61.75 US dollars/barrel, up 0.14 US dollars; the CFR middle - price of naphtha in Japan is 574.5 US dollars/ton, up 3.75 US dollars [2]. - Ethylene prices: The CFR middle - price of ethylene in Southeast Asia is 821 US dollars/ton, unchanged; in Northeast Asia, it is 826 US dollars/ton, unchanged [2]. 3.4 Industry Situation The national PE petrochemical开工率 is 84.2%, up 0.12 percentage points [2]. 3.5 Downstream Situation - Packaging film开工率: The开工率 of polyethylene (PE) packaging film is 49.07%, down 0.23 percentage points [2]. - Pipe开工率: The开工率 of polyethylene (PE) pipes is 30%, up 1 percentage point [2]. - Agricultural film开工率: The开工率 of polyethylene (PE) agricultural film is 13.82%, up 0.75 percentage points [2]. 3.6 Option Market - Historical volatility: The 20 - day historical volatility of polyethylene is 9.79%, down 0.63 percentage points; the 40 - day historical volatility is 8.96%, down 1.71 percentage points [2]. - Implied volatility: The implied volatility of at - the - money put options for polyethylene is 9.34%, down 1.85 percentage points; the implied volatility of at - the - money call options is 9.31%, down 1.89 percentage points [2]. 3.7 Industry News - China will conduct a comprehensive rectification of the petrochemical and refining industries, gradually eliminate small facilities, upgrade backward production capacity, and direct investment to advanced materials [2]. - From August 8th to 14th, China's polyethylene production was 661,100 tons, a 0.14% increase from the previous period, and the capacity utilization rate was 86.82%, a 1.1 - percentage - point increase [2]. - From August 8th to 14th, the average开工率 of China's polyethylene downstream products increased 0.4% from the previous period [2]. - As of August 13th, the inventory of Chinese polyethylene production enterprises was 444,500 tons, a 13.76% decrease from the previous period; as of August 15th, the polyethylene social inventory was 556,500 tons, a 2.14% decrease from the previous period [2].

Group 1 - The core viewpoint of the articles highlights the significant increase in loans issued by the National Development Bank (NDB) for advanced manufacturing and strategic emerging industries, amounting to 385 billion yuan from January to July, representing a year-on-year growth of 51.3% [1] - The NDB has intensified its efforts in corporate engagement, customizing financial service plans for individual enterprises, particularly focusing on key industrial chains such as integrated circuits, domestic large aircraft, high-end equipment manufacturing, and new materials [1] - In Shanghai, the NDB's branch has increased R&D loan disbursements to support 15 enterprises in high-end equipment manufacturing and new energy vehicles, addressing the significant funding needs for R&D [1] Group 2 - In Liaoning, the NDB's branch is focusing resources on four trillion-yuan industrial bases and 22 key industrial clusters, providing long-term financing support to companies like Shenyang Siasun Robot and Ansteel Group, thereby aiding the province's equipment manufacturing sector [2] - The NDB plans to align its efforts with the recent guidelines issued by the People's Bank of China and other departments to provide long-term financing support for key industrial chains, enhancing financial services for characteristic industrial clusters and key enterprises [2]

Group 1 - The largest ten petrochemical companies in South Korea have agreed to restructure their operations, including a reduction of up to 25% in naphtha cracking capacity [1] - The government is urging the industry to accelerate large-scale restructuring to save the struggling sector and avoid a complete collapse [1][2] - The companies have committed to reducing naphtha cracking capacity by 2.7 to 3.7 million tons annually, which represents a closure of up to 25% of the national capacity of 14.7 million tons [1] Group 2 - The government will provide regulatory relief and financial support to companies that genuinely attempt to "save themselves," but will not tolerate "free riders" who expect assistance without restructuring efforts [2] - South Korea is one of the largest importers of naphtha, which is crucial for producing plastic raw materials for various industries, but local companies face increasing financial pressure due to large-scale expansions in other Asian countries [2] Group 3 - The South Korean government has set three main goals for the petrochemical industry restructuring: reducing excess capacity and facilities, shifting towards high-value specialty products, and improving financial conditions while minimizing impacts on local economies and employment [3] - The government plans to promote the restructuring of major petrochemical industrial parks and provide comprehensive support, considering designating key areas as industrial crisis zones to offer subsidies or loans [3] Group 4 - Analysts suggest that the anticipated restructuring may lead to large-scale cooperation or merger discussions across the country [4] - Companies like Lotte Chemical and Hyundai Oilbank are exploring merging their naphtha cracking operations, while SK Innovation and Korea Petrochemical Industries are also discussing capacity reductions and facility mergers [4] Group 5 - The pressure for industry restructuring has intensified following the suspension of operations at YNCC's third plant due to liquidity issues, with potential permanent closure to reduce capacity [5] - Industry insiders indicate that further integration among major companies in Yeosu is necessary to achieve the overall capacity reduction goals [5]

Report Summary 1. Investment Rating The report does not provide an investment rating for the industry. 2. Core Views - **Pure Benzene**: The supply side of pure benzene has been relatively strong recently. The supply of petroleum benzene has been stable, and the overall operating rate of hydrobenzene has increased significantly. The demand side shows structural differences, with an increase in the consumption of pure benzene in some products. However, the profit margins of downstream products are compressed, and the release of substantial incremental demand from new production capacity is slow. The inventory in East China ports has decreased slightly, and the supply and demand in the domestic market are both increasing in August - September. Although the supply - demand balance has improved marginally, high - level hidden inventory and weak terminal consumption are still concerns [3]. - **Styrene**: The styrene market remains oversupplied. New production capacity is being continuously released, and there are still large - scale plant commissioning plans in September - October. The demand improvement is limited due to insufficient terminal consumption. Although there are signs of marginal improvement in the supply - demand surplus in August - September, whether the market can maintain inventory reduction remains to be observed [4]. 3. Summary by Section 3.1. Daily Market Summary - **Fundamentals** - **Prices**: On August 19, the main contract of styrene closed down 0.06% at 7,226 yuan/ton, with a basis of 54 (+14 yuan/ton); the main contract of pure benzene closed down 0.06% at 6,182 yuan/ton. The price of Brent crude oil closed at 63.4 (+0.6 dollars/barrel), and WTI crude oil closed at 66.6 (+0.8 dollars/barrel). The spot price of pure benzene in East China was 6,095 yuan/ton (+0 yuan/ton) [2]. - **Inventory**: Styrene's sample factory inventory was 20.9 million tons (-0.3 million tons), a 1.3% decrease; the inventory in Jiangsu ports was 14.9 million tons (-1.0 million tons), a 6.42% decrease. The port inventory of pure benzene was 14.6 million tons (-1.7 million tons), a 10.43% decrease [2]. - **Supply**: A new styrene plant in Shandong was put into operation, and the overall supply remained stable. The weekly production of styrene was 36.9 million tons (+1.0 million tons), and the factory capacity utilization rate was 78.2% (+0.5%) [2]. - **Demand**: The operating rates of EPS, ABS, and PS among downstream 3S products changed differently. The capacity utilization rate of EPS was 58.1% (+14.4%), ABS was 71.1% (+0%), and PS was 56.7% (+1.7%) [2]. 3.2. Industry News - China's shale cracking raw material supply is affected by trade and production capacity, pushing up the cost of naphtha. China is expected to increase naphtha imports to a record 1,600 - 1,700 million tons in 2025 [9]. - The global diesel shortage supports refinery profits, having a structural impact on the crude oil and chemical chains [9]. - India is accelerating petrochemical expansion to counter China's dominant position. Reliance Industries in India emphasizes the need to develop petrochemical production capacity [9]. 3.3. Industrial Chain Data Monitoring - **Prices**: The prices of styrene and pure benzene futures and spot, as well as the basis, are presented in the report. The prices of upstream products such as Brent crude oil, WTI crude oil, and naphtha are also included [6]. - **Production and Inventory**: The production and inventory data of styrene and pure benzene from August 8 to August 15, 2025, are provided, showing changes in production volume and inventory levels [7]. - **Operating Rates**: The operating rates of pure benzene and styrene downstream products from August 8 to August 15, 2025, are given, including styrene, caprolactam, phenol, aniline, EPS, ABS, and PS [8].