Report Overview - **Report Title**: C3 Industry Chain Weekly Report - **Report Date**: February 8, 2026 - **Author**: Chen Xinchao, Zhao Shucen Industry Investment Rating No information provided in the report. Core Views LPG - Short - term geopolitical disturbances are strong, but the fundamental drivers are downward. The market will maintain a wide - range oscillation pattern in the short term, and the medium - to long - term drivers are downward [3]. Propylene - The fundamentals remain tight, but the upward driving force is weakening. The spot price of propylene is expected to fluctuate within a range before the holiday [4]. Summary by Section LPG Part Price & Spread - LPG domestic spot and basis/USD cost trends are firm, domestic civil prices are slightly adjusted, and ether - after prices have weakened significantly. International propane prices have fluctuated, and freight rates remain high [7]. Supply - Total domestic LPG commodity volume is 549,000 tons (+0.9%), civil gas is 225,000 tons (-2.8%), and ether - after is 180,000 tons (+6.1%). US, Canadian, and Middle Eastern LPG shipments have different trends, and China's propane supply has increased [33][67][78]. Demand & Inventory - PDH operating rate has slightly increased, and MTBE operating rate has remained flat. LPG refinery inventory is at a neutral level, civil gas is de - stocking, ether - after is accumulating inventory, and terminal inventory is mainly accumulating [79]. Balance Sheet - In the first quarter, propane is expected to remain seasonally strong; in the second quarter, supply will return to normal, and the tight supply - demand pattern is expected to ease [114]. Propylene Part Price & Spread - Propane buying support is strong, PDH costs have further increased, and propylene prices have adjusted narrowly. The upstream and downstream prices of the propylene industry chain have changed, and the import window remains closed [115][117]. Balance Sheet - Supply has increased and demand has decreased this week. In January and February, the supply - demand was in a tight balance, and it is expected to be looser in March [135][157]. Supply - Weekly propylene output is 1.17 million tons (+19,000), and the operating rate is 72% (+1.2%). Refinery, cracking, PDH, and MTO operating rates have different changes [161][163]. Demand - The operating rates of propylene downstream products such as PP, PP powder, PO, acrylonitrile, etc. have changed, and the profits of some products have been compressed [201]. Downstream Inventory - PP and related powder inventories, as well as other downstream inventories such as acrylonitrile and phenol, have different changes [284].

国泰君安期货·能源化工 C3产业链周度报告 国泰君安期货研究所 日期：2026年2月1日 陈鑫超 投资咨询从业资格号：Z0020238 赵书岑（联系人） 期货从业资格号：F03147780 Guotai Junan Futures all rights reserved, please do not reprint CONTENT 总结 01 LPG部分 02 丙烯部分 03 价格&价差 供应 需求&库存 价格&价差 平衡表 供应 需求 下游库存 Special report on Guotai Junan Futures 2 本周LPG观点：短期地缘扰动偏强，基本面驱动向下 供应 国产方面，液化气总商品量54.3万吨，较上周环比增加1.9%；其中，民用气商品量23.2万吨（+1.6%），醚后商品量16.9万吨（+2.9%）；伴随 炼厂负荷抬升，当前国内民用气商品量逐渐修复至历史同期中性偏低位，而醚后碳四商品量维持在24、25年水平。成本方面，美伊局势紧张， 原油周内宽幅震荡，对LPG价格扰动偏强；而寒潮扰动有限，美湾丙烷价格回落；中东2月CP出台，略高于市场预期，成本支撑持稳，现货贴水 则受3月供应回归预期 ...

Report Overview - Report Title: C3 Industry Chain Weekly Report - Report Date: January 18, 2026 - Report Author: Chen Xinchao, Zhao Shucen Industry Investment Rating - Not provided in the report Core Views LPG Part - Short - term supply is tight, and attention should be paid to the realization of downward drivers. Although the supply in the Middle East remains tight, there is still supply pressure after the impact of fog at US terminals weakens. With low chemical profits and many PDH maintenance plans in Q1, the downward drive is significant. [3][4] - The lowest deliverable product may switch as the spread between Shandong civil and ether - post C4 widens. Near the cancellation month, attention should be paid to the change in the number of warehouse receipts. [4] Propylene Part - After the rapid rise of spot prices, the upward drive weakens. The tight - balance pattern of propylene is difficult to change next week. Although the downstream's enthusiasm for chasing high - priced propylene may weaken, the rigid demand for production provides strong support, so propylene is expected to remain in an upward - biased pattern. [6][7] Summary by Directory LPG Part Price & Spread - Domestic LPG spot prices maintain a moderately strong and fluctuating trend. The lowest deliverable product is still Shandong civil gas, and the spread between civil and ether - post C4 has widened to 100 yuan/ton. [10][13] - Propane prices maintain a moderately strong trend, with the FEI index and related import costs showing an upward trend. The spot premium further increases, and the freight rate remains stable, while the arbitrage window from the US Gulf to the Far East expands. [10][21][27] Supply - US LPG shipments to Asia are flat month - on - month, while Middle East shipments are tight. The total LPG commodity volume is 51.9 tons (+0.1%), with 21.7 tons of civil gas (-0.1%) and 16.7 tons of ether - post C4 (-0.1%). Propane imports decrease by 0.2 tons month - on - month. [39][43][49][63] Demand & Inventory - PDH operating rates decline, while MTBE operating rates remain flat. LPG refinery inventories are at a neutral level compared to the same period in 2025, with a slight de - stocking of civil gas refinery inventories. Port inventories in East China, Shandong, and South China decline month - on - month, while Fujian accumulates inventory due to concentrated arrivals. [80][82][100] Propylene Part Price & Spread - The cost - end propane is firm, propylene prices rise strongly, and PDH profits fluctuate and recover. Downstream prices continue to rise, but the spread between propylene and powder returns to the loss range. International and domestic propylene prices rise month - on - month, and the import window is partially opened. [115][117][118] Balance Sheet - PDH and MTO operating rates decline month - on - month, and the powder profit is compressed, leading to a decline in its operating rate. The supply is expected to tighten gradually as the Jinneng PDH and Lianyungang Shenghong MTO are expected to undergo maintenance. The demand is supported by the rigid procurement of PP powder, and the situation is expected to improve in January. [139][159] Supply - The overall upstream operating rate of propylene is 75.2% (-0.7%). Refinery operating rates remain stable, while cracking and PDH operating rates decline. MTO operating rates also decline, but profits are recovering. [170][190][195] - The import volume of propylene increases by 0.96 tons (7.21%) month - on - month, and the import profit shows an upward trend. [204] Demand - The operating rates of PP, PP powder, PO, and acrylonitrile decline, while the operating rates of n - butanol, octanol, phenol - acetone, and ECH increase. The profit performance of PP shows process differentiation, and the profit of PP powder returns to the loss range. PO prices rise strongly, and the company's profitability improves significantly. [211][231][243][273] Downstream Inventory - PP production enterprise inventory, trader inventory, and powder inventory all decline. The inventory of acrylonitrile plants and ports shows different changes, and the inventory of phenol and acetone in Jiangyin Port declines. [298][299][300]

Report Summary 1. Investment Rating The document does not mention the industry investment rating. 2. Core Views - **LPG**: Short - term supply is tight, and attention should be paid to the realization of downward drivers. The domestic PG fluctuates widely in the short term, affected by geopolitical factors. Supply pressure may emerge later, and downward drivers are gradually appearing, but geopolitical situations and PDH device feedback need to be closely monitored [3][4]. - **Propylene**: Spot supply and demand are tightening, and the trend is strong. Next week, with the reduction in supply and the increase in demand, there is still upward potential for propylene [5]. 3. Summary by Directory LPG Part - **Price & Spread** - Domestic LPG spot prices maintain high - level fluctuations, with significant increases in civil and imported gas prices and a further decline in ether - post prices. Propane prices are oscillating strongly, Asian spot premiums are rising further, CP FOB premiums are falling, and freight rates are increasing [8][12][21][23]. - **Supply** - Domestic LPG production shows a decrease, with a total commodity volume of 518,000 tons (-1.1%). US LPG shipments to Asia are increasing month - on - month, and Middle Eastern LPG shipments are recovering [3][33][35]. - **Demand & Inventory** - Chemical demand shows a slight increase in PDH operating rates and a slight decline in MTBE operating rates. Domestic LPG refinery inventories are at a neutral level compared to the same period in 2025, civil gas refinery inventories have small month - on - month changes, and terminal import inventories show destocking in East China and Shandong and inventory accumulation in South China [63][65][86]. Propylene Part - **Price & Spread** - The cost - side propane is firm, propylene prices stabilize and then rebound, and PDH profits are oscillating and recovering. Downstream trends are improving further, and profits are being repaired. International/US - dollar prices are rising slightly month - on - month, the import window remains closed but the inversion is narrowing, and domestic prices are weakly operating [98][100][102][112]. - **Balance Sheet** - PDH operating rates are increasing month - on - month, powder production operating rates are further declining, and butanol and octanol operating rates are increasing significantly. Supply is expected to decrease due to planned maintenance of some devices, while demand is expected to increase, with some downstream devices having restart and load - increasing plans [123][148]. - **Supply** - The overall upstream operating rate of propylene is 76.0% (+1.1%). Refinery/main - plant operating rates are slightly increasing to 77%, cracking/ethylene cracking operating rates are 83.5% (-0.1%), PDH capacity utilization is 75.6% (+0.5%), and MTO capacity utilization is 88.1% (+0.6%) [152][161][167][172]. - **Demand** - PP capacity utilization is 75.5% (-1.3%), PP powder capacity utilization is 37.4% (-1.2%), PO capacity utilization is 73.7% (+0.1%), acrylonitrile capacity utilization is 78.8% (+0.5%), acrylic acid capacity utilization is 86.7% (+3.6%), n - butanol capacity utilization is 83.1% (+2.1%), octanol capacity utilization is 89.0% (+7.0%), phenol - ketone capacity utilization is 85.5% (+4.5%), and ECH capacity utilization is 49.27% (-0.67%) [189][212][224][236][240][250][255][260][268]. - **Downstream Inventory** - PP production enterprise inventories and powder inventories show different trends, with production enterprise inventories decreasing and powder inventories increasing. Inventories of other downstream products such as phenol, acetone, and acrylonitrile also have corresponding changes [273][277][278].

Report Industry Investment Rating No relevant content provided. Core View of the Report - The market sentiment cooled slightly yesterday, with the commodity market weakening significantly and the stock index showing a volatile trend. The trading volume also contracted. After a rapid rise, the stock index has entered a stage of shock consolidation. There are no obvious macro-level negatives at present, and the short-term outlook for the stock index remains bullish. The bond futures are favored by the asset shortage and weak economy, but the central bank has recently warned of interest rate risks. Attention should be paid to the Bank of Japan's interest rate decision. [1] - The prices of various commodities are affected by different factors, such as supply and demand, policy changes, and macro sentiment. The report provides trend judgments and trading suggestions for each commodity, including metals, energy, chemicals, and agricultural products. [1] Summary by Related Catalogs Macro Finance - Stock Index: After a rapid rise, the stock index has entered a stage of shock consolidation. There are no obvious macro-level negatives at present, and the short-term outlook for the stock index remains bullish. Attention should be paid to capital flows and market sentiment changes. [1] - Treasury Bonds: The bond futures are favored by the asset shortage and weak economy, but the central bank has recently warned of interest rate risks. Attention should be paid to the Bank of Japan's interest rate decision. [1] Non-Ferrous Metals - Copper: The copper price has fallen from its recent high, but there are still disruptions in the mining end. The downside space for the copper price is expected to be limited. [1] - Aluminum: There has been an accumulation of domestic electrolytic aluminum stocks recently, and the industrial driving force is limited. The macro anti-involution sentiment has ebbed, and the aluminum price has fallen from its high. [1] - Alumina: The supply side of alumina still has a large release space, and the industrial side exerts downward pressure on the price. However, the current price is basically near the cost line, and the price is expected to fluctuate. [1] - Zinc: The fundamentals of zinc have improved, and the cost center has shifted upward. The recent macro sentiment has been good, and the zinc price has risen. However, considering the still existing pressure on the fundamentals, caution is advised regarding the upside space. [1] - Nickel: The market's concerns about nickel supply have significantly cooled, and the LME nickel inventory has increased significantly recently. The nickel price has corrected from its high. Since Indonesia has not disclosed the specific amount and said that it is still in the process of accounting, there is still uncertainty about the implementation of the subsequent policy. The short-term volatility risk of the nickel price has increased. Attention should be paid to the implementation of Indonesia's policy, changes in macro sentiment, and changes in futures positions, and risk control should be done well. [1] Precious Metals and New Energy - Gold and Silver: The annual weight adjustment of the BCOM index has officially started, and the exchange has introduced multiple risk control measures for silver to suppress speculative enthusiasm. The prices of precious metals have fallen across the board, with a significant decline in silver. In the short term, gold and silver are expected to continue to be weak and volatile. In the medium and long term, attention can be paid to the opportunity to buy on dips after this round of risk release. [1] - Platinum and Palladium: Platinum and palladium have followed the weakening of precious metals. In the short term, they are expected to be in a wide-range volatile pattern. In the medium and long term, with the still existing supply-demand gap for platinum and the tendency of palladium to have a loose supply, platinum can still be bought on dips or a [long platinum, short palladium] arbitrage strategy can be adopted. [1] Industrial Products - Industrial Silicon: There is an increase in production in the northwest and a decrease in production in the southwest. The production schedules for polysilicon and organic silicon in December have decreased. [1] - Polysilicon: It is the traditional peak season for new energy vehicles. The demand for energy storage is strong. The supply side has increased production resumption. There is a short-term rapid increase. [1] - Rebar and Hot Rolled Coil: In the short term, sentiment and capital have a greater influence than industrial contradictions. One can try to follow long positions with a stop-loss; for futures-spot trading, participate in positive spread positions. [1] - Iron Ore: There is sector rotation, but the upside pressure on iron ore is obvious. It is not recommended to chase long positions at this level. [1] - Non-Ferrous Metals: There is a combination of weak reality and strong expectations. The current supply and demand situation remains weak, but in terms of expectations, energy consumption double control and anti-involution may have an impact on supply. [1] - Soda Ash: Soda ash follows the trend of glass. In the medium term, the supply and demand situation will be more relaxed, and the price will be under pressure. [1] - Coking Coal and Coke: If the "capacity reduction" expectation continues to ferment and there is pre-holiday restocking of spot goods, coking coal may still have room to rise. However, since the current market's "capacity reduction" expectation mainly comes from online rumors, it is difficult to judge the actual upside space. After a significant increase, the volatility will intensify, and caution should be exercised. The logic for coke is the same as that for coking coal. [1] Agricultural Products - Palm Oil: The MPOB December data is expected to be bearish for palm oil, but palm oil will reverse under the themes of seasonal production reduction, the B50 policy, and US biodiesel in the future. Short-term rebounds due to macro sentiment should be watched out for. [1] - Soybean Oil: The fundamentals of soybean oil are relatively strong. It is recommended to allocate more in the oil sector and consider a long Y, short P spread. Wait for the January USDA report. [1] - Rapeseed Oil: The trade relationship between China and Canada may improve, and Australian rapeseed will be imported smoothly. After the rapeseed trade flow is opened up, the trading logic of rapeseed oil will gradually shift from the domestic tight supply situation to the global rapeseed production increase expectation. There is still room for the price to fall. Short-term rebounds due to macro sentiment should be watched out for. [1] - Cotton: There is a strong expectation of a good harvest for domestic new crops, and the purchase price of seed cotton supports the cost of lint cotton. The downstream operating rate remains low, but the inventory of yarn mills is not high, and there is a rigid demand for restocking. Considering the growth of spinning capacity, the demand for cotton in the new crop market year is relatively resilient. Currently, the cotton market is in a situation of "having support but no driving force." Future attention should be paid to the tone of the No. 1 Central Document in the first quarter of next year regarding the direct subsidy price and cotton planting area, the intention of cotton planting area next year, the weather during the planting period, and the demand during the "Golden Three and Silver Four" peak season. [1] - Sugar: Currently, there is a global surplus of sugar, and the supply of domestic new crops has increased. The short-selling consensus is relatively strong. If the futures price continues to fall, there will be strong cost support below. However, there is a lack of continuous driving force in the short-term fundamentals. Attention should be paid to changes in the capital side. [1] - Corn: The fundamentals of corn have not changed significantly. The spot price remains firm, and the progress of grain sales at the grassroots level is relatively fast. Most traders have not yet strategically built inventories, and feed enterprises maintain a safe inventory. There is a certain restocking demand before the holiday. The short-term outlook for CO3 is expected to be oscillating and slightly bullish. Attention should be paid to the dynamics of policy grain auctions. [1] - Soybean Meal: The domestic market may restart the auction of imported soybeans; the relationship between China and Canada is expected to ease, and China is expected to suspend the tax on Canadian rapeseed meal; the macro sentiment has cooled, and the domestic market has returned to the fundamentals and shown a significant decline. Recently, it has been greatly affected by policy news. The soybean meal futures price is expected to be mainly oscillating in the short term. Attention should be paid to the adjustment of the January USDA supply and demand report and the trend of the Brazilian premium. [1] - Pulp: Pulp has fallen today due to the decline in the commodity macro market. The overall price has not broken through the oscillating range. The short-term commodity sentiment fluctuates greatly, and it is recommended to observe cautiously. [1] - Logs: The spot price of logs has shown a certain sign of bottoming out and rebounding recently. The further downside space for the futures price is expected to be limited. However, the January overseas quotation has still slightly declined, and the log futures and spot markets lack upward driving factors. It is expected to oscillate in the range of 760 - 790 yuan/m³. [1] - Hogs: Recently, the spot price has gradually stabilized. Supported by demand and with the出栏体重 not yet fully cleared, the production capacity still needs to be further released. [1] Energy and Chemicals - Crude Oil: OPEC+ has suspended production increases until the end of 2026. There is uncertainty about the Russia-Ukraine peace agreement. The United States has imposed sanctions on Venezuela's crude oil exports. [1] - Fuel Oil: In the short term, the supply-demand contradiction is not prominent, and it follows the trend of crude oil. The probability of the 14th Five-Year Plan's rush demand being falsified is high, and the supply of Ma Rui crude oil is not short. The profit of asphalt is relatively high. [1] - BR Rubber: The futures position has declined, and the number of new warehouse receipts has increased. The increase in BR has slowed down temporarily. The spot price has led the rise to repair the basis, and BR continues to focus on the upward momentum above the 12,000 yuan line. The listed prices of BD/BR have been continuously raised, and the processing profit of butadiene rubber has narrowed. The overseas cracking device capacity has been cleared, which is beneficial to the long-term export expectation of domestic butadiene. The tax on naphtha also has a positive impact on the butadiene price. Fundamentally, butadiene rubber maintains high production and high inventory operation, and the trading center is generally average. Styrene-butadiene rubber is relatively better than butadiene rubber. [1] - PX and PTA: The PX market has experienced a rapid rise, but this round of rise is not due to a fundamental change. The fundamentals of PX do have support, and the market is expected to continue to tighten in 2026, driven by the new PTA production capacity in India and the organic growth of demand. Domestic PTA maintains high production. The gasoline spread is still at a high level, which supports aromatics. [1] - Ethylene Glycol: There is news that two sets of MEG plants in Taiwan, China, with a total annual capacity of 720,000 tons, plan to stop production next month due to efficiency reasons. Ethylene glycol has rebounded rapidly during the continuous decline, stimulated by supply-side news. The current operating rate of the polyester downstream remains above 90%, and the demand performance is slightly better than expected. [1] - Short Fiber: The PX market has experienced a rapid rise, but this round of rise is not due to a fundamental change. Domestic PTA maintains high production, and the domestic polyester load has declined. The short fiber price continues to closely follow the cost fluctuations. [1] - Styrene: The Asian styrene market is generally stable. Suppliers are reluctant to lower prices due to continuous losses, while buyers insist on pressing prices due to weak downstream polymer demand and compressed profits. Although the downstream demand is weak, the domestic market has a strong bullish sentiment due to export support. The market is in a weak balance state, and the short-term upward momentum needs to be driven by the overseas market. [1] - Urea: The export sentiment has slightly eased, and there is limited upside space due to insufficient domestic demand. There is support from anti-involution and the cost side below. [1] - PF: Geopolitical conflicts have intensified, and there is a risk of an increase in crude oil prices. There are fewer maintenance activities, the operating load is at a high level, and there are overseas arrivals, so the supply has increased. The downstream demand operating rate has weakened. In 2026, there will be more new production capacity, and the supply-demand surplus will further intensify, and the market expectation is weak. [1] - Propylene: There are fewer maintenance activities, the operating load is relatively high, and the supply pressure is relatively large. The improvement in the downstream is less than expected. The propylene monomer price is at a high level, the crude oil price has risen, and the cost support is strong. Geopolitical conflicts have intensified, and there is a risk of an increase in crude oil prices. [1] - PVC: In 2026, there will be less global new production capacity, and the future expectation is relatively optimistic. Currently, there are fewer maintenance activities, new production capacity is being released, and the supply pressure is increasing. The demand has weakened, and the orders are not good. The differential electricity price in the northwest region is expected to be implemented, which will force the clearance of PVC production capacity. [1] - LPG: The January CP has risen more than expected, and the cost support for imported gas is relatively strong. The geopolitical conflicts between the United States, Venezuela, and the Middle East have escalated, and the short-term risk premium has increased. The trend of inventory accumulation in the EIA weekly C3 inventory has slowed down, and it is expected to gradually turn to inventory reduction. The domestic port inventory has also decreased. Domestic PDH maintains high production and deep losses. There is a rigid demand for global civil combustion, and the demand for MTBE from overseas olefin blending for gasoline has declined temporarily. Since January 1, 2026, naphtha has been re-taxed, and the long-term demand expectation for light cracking raw materials such as LPG has increased, and the performance of downstream olefin products is relatively strong. [1] Shipping - Container Shipping - European Line: It is expected to peak in mid-January. Airlines are still relatively cautious in their trial reflights. The pre-holiday restocking demand still exists. [1]

Report Information - Report Name: C3 Industry Chain Weekly Report [1] - Report Date: January 4, 2026 [1] - Analyst: Chen Xinchao [1] - Contact Person: Zhao Shucen [1] Investment Rating - Not provided in the content Core Views LPG - Geopolitical factors disrupt costs, and attention is paid to the realization of downward drivers. The market is relatively stable during holidays, with the internal PG fluctuating and consolidating. After the holiday, the high opening of the January CP official price boosts market sentiment, but the coexistence of supply return and weakening chemical demand expectations remains, and the loose pattern remains unchanged. The market price rises and then falls. In the future, the geopolitical conflict between the US and Venezuela during the holiday is expected to disrupt the cost-side crude oil in the short term, and the increase in the January CP will support the propane trend. However, high prices suppress buying interest, the actual import cost support is limited, and the supply pressure remains. Meanwhile, the current chemical profit is at a low level, there are many PDH maintenance plans in the first quarter, the economic efficiency of cracking propane feedstock is insufficient, and the procurement increment is limited, so the downward driver is gradually emerging. [4][5] Propylene - There is limited upward and downward driving force, and the spot price trend stabilizes. Next week, there will be a mix of start-ups and shutdowns in terms of supply, and the demand side is expected to increase. Overall, propylene lacks obvious trend guidance and is expected to remain volatile and stable in the short term. However, the high opening of CP further compresses the profit of PDH devices, and attention should be paid to the realization of the expected increase in unexpectedly shut-down devices in the first quarter. [8] Summary by Directory LPG Part Price & Spread - Domestic LPG spot prices and basis show regional differentiation in civil use trends, and import costs are relatively firm. The prices of propane in the international market show a certain degree of fluctuation, and the spot premium has significantly declined. [11] - The domestic LPG market price shows a pattern of strong performance in South China and stable performance in East China and Shandong. [15] - The regional quotes, premiums, and freight rates show that the CP official price opens high, but the premium falls. [23] - The propane price has declined month-on-month. [32] Supply - The US LPG shipment volume to Asia has increased month-on-month, while the Canadian LPG shipment volume remains relatively stable. The Middle East LPG shipment volume is tight in the spot market, and the shipments are delayed. The total LPG commodity volume in China has increased slightly, and the propane commodity volume has decreased in terms of import arrivals. [42][48][49][64][76] Demand & Inventory - In terms of chemical demand, the PDH operating rate has increased, while the MTBE operating rate has decreased. The domestic LPG refinery inventory is at a relatively low level compared to the same period last year, with limited month-on-month changes. The civil LPG refinery inventory has changed little month-on-month. The LPG terminal import inventory has significantly decreased month-on-month due to lower-than-expected arrivals. [80][82][90][99] Propylene Part Price & Spread - In the propylene industry chain, the cost-side propane first declines and then rises, while the propylene price remains stable. The prices of some downstream products of propylene have improved, and the profit of powder materials has improved. The international/US dollar price of propylene remains flat month-on-month, and the domestic price trend remains stable. [111][113][115][123] Balance Sheet - In the propylene industry chain, the PDH operating rate has increased month-on-month; the powder material operating rate has further declined, while the butanol and octanol operating rates have significantly increased. The supply and demand of propylene in the national and Shandong regions show certain changes, and the inventory has also changed accordingly. [135][138][144][150][155][157][162] Supply - The overall upstream operating rate of propylene is 75.0% (+0.9%). The refinery/main operating rate remains at 75%, and the local refinery operating rate is 56%. The ethylene cracking operating rate is 82.8% (-0.4%), and the cracking profit center has slightly improved month-on-month. The PDH capacity utilization rate is 76.4% (+1.4%), and the MTO capacity utilization rate is 87.8% (-1.7%). [167][169][179][184][189] Demand - The downstream PP capacity utilization rate is 76.9% (-2.5%), and the profit has stopped falling and slightly recovered month-on-month. The PP powder capacity utilization rate is 37.6% (+0.7%), and the spread between powder materials and propylene has continued to recover, with some devices returning. The PO capacity utilization rate is 74.1% (-2.0%), and the operating rate is expected to decline slightly further. The acrylonitrile capacity utilization rate is 80.3% (-0.3%), and the profit has increased month-on-month. The acrylic acid capacity utilization rate is 79.9% (+0.4%), and the profit has increased month-on-month. The n-butanol capacity utilization rate is 79.9% (+2.1%), and the profit has increased significantly month-on-month. The octanol capacity utilization rate is 85.0% (+3.0%), and the profit has increased month-on-month. The phenol-ketone capacity utilization rate is 78.5% (+2.5%), and the profit has increased slightly month-on-month. The ECH capacity utilization rate is 50.82% (+2.39%), and the price and profit have both increased month-on-month. [203][208][221][230][235][243][251][254][264][266][273] Downstream Inventory - The inventory of PP production enterprises, traders, and ports has changed slightly. The inventory of PP powder materials has also changed slightly. The inventory of acrylonitrile factories and ports remains stable, while the inventory of phenol and acetone in Jiangyin Port has decreased. [277][288][290]

Core Viewpoint - The propane dehydrogenation (PDH) industry is facing significant losses, with profits dropping to around -1400 yuan/ton, marking the lowest level in nearly six years. There are expectations of widespread shutdowns in the PDH industry this month, raising concerns about the impact on downstream products like propylene, polypropylene (PP), and liquefied petroleum gas (LPG) [1][2]. Industry Profit Trends - The PDH industry's profit trajectory showed a clear "rise and fall" pattern last year, peaking in July and August due to low raw material prices and a rebound in downstream PP prices. However, since mid-October, profits have been in decline, leading to significant losses [1]. - The main reason for the continued losses is the weakening price of PP, with supply outpacing demand as PP production capacity is expected to grow by 12% in 2025 and around 10% in 2026, while actual demand growth is only projected at 4%-5% [1][2]. Raw Material Pressure - The pressure on raw materials is increasing, with seasonal purchasing expectations in India and Japan driving up import propane prices. Domestic deep processing enterprises report high spot prices for propane, further squeezing PDH industry profit margins. Additionally, the current demand for PP is weak, limiting price recovery potential [2]. Impact on Related Products LPG - LPG demand is relatively stable, but its price is influenced by the PDH industry's demand. Since November, LPG's fundamentals have shown a "strong reality, weak expectation" pattern. If PDH operations reduce or shut down, LPG's price stability may be compromised [4]. - Long-term projections indicate that LPG production capacity in the U.S. and the Middle East will continue to increase, leading to potential downward pressure on LPG prices if PDH operations decline [4]. PP - As the core downstream product of PDH, PP prices have been declining for three consecutive months since September. While expectations of reduced PDH operations may provide short-term support for PP prices, high inventory levels and upcoming new production capacity in 2026 will likely maintain long-term supply pressure [5]. Propylene - Propylene, being a direct downstream product of PDH, will see a significant supply reduction if PDH operations shut down, potentially providing price support. However, the ongoing pressure on PP margins and reduced operating rates may limit propylene's price increase potential [6]. Trading Opportunities - Market participants should focus on the actual shutdown situation of PDH units in January. If the number of shutdowns increases, it could significantly support PP and propylene prices. Conversely, if shutdowns are fewer than expected, related products may face downward pressure [8]. - Long-term variables to monitor include domestic macro policy releases and the impact of new production capacity planned for 2026, which could affect the supply-demand balance for PP and propylene [8].

Report Overview - Report Title: C3 Industry Chain Weekly Report - Report Date: December 28, 2025 - Report Author: Chen Xinchao - Report Contact: Zhao Shucen Industry Investment Rating - Not provided in the report Core Views - **LPG**: In the short term, the supply is tight. The 1 - month CP is expected to rise, which will support propane prices. However, as maintenance in the Middle East ends and US exports increase, supply pressure remains. With low chemical profits and many PDH maintenance plans in Q1, downward - driving factors are emerging [3][4]. - **Propylene**: The spot supply - demand situation has tightened, and there is an expectation of a stop - falling and rebound. As some PP devices restart, the supply of propylene is expected to decrease, while the demand from downstream devices is expected to increase [6]. Summary by Section LPG Part Price & Spread - **Domestic Spot and Basis**: The domestic civil LPG price trend is weak, while the import cost is firm. The regional price difference between Shandong and East China has widened by 96 yuan/ton, and the regional price difference between South China and East China has increased by 24 yuan/ton [9]. - **Domestic Market Price**: The prices in South China are firm, while those in East China and Shandong have declined, with a significant decline in Shandong [14]. - **Regional Quotation, Premium, and Freight**: The Asian spot premium has slightly increased, and the CP FOB premium remains at a high level [20]. - **Propane Price**: Propane prices have maintained a firm trend [29]. Supply - **US LPG Shipment**: The shipment volume to Asia has increased month - on - month. The 4 - week moving average (MA4) of the US - Asia LPG shipment volume has increased by 30,000 tons [38][40]. - **Canadian LPG Shipment**: The overall shipment volume has decreased. The MA4 of the Canadian LPG shipment volume has decreased by 10,000 tons [44]. - **Middle East LPG Shipment**: Spot supply is tight, and shipments are delayed. The MA4 of the Middle East LPG shipment volume has decreased by 50,000 tons [45][49]. - **LPG Commodity Volume**: The total LPG commodity volume is 524,000 tons (+1.2%), and the civil LPG commodity volume is 219,000 tons (+0.4%) [59]. - **Propane Commodity Volume**: The import arrival volume has decreased by 286,000 tons month - on - month. The domestic refinery supply has slightly increased [70][72]. Demand & Inventory - **Chemical Demand**: The PDH operating rate has increased, while the MTBE operating rate has decreased. The PDH operating rate has increased by 1.4% to 76.4% [75]. - **Domestic Refinery Inventory**: The inventory is the same as in 2024, at a relatively low level in the same period, with limited month - on - month changes [77]. - **Civil LPG Refinery Inventory**: The month - on - month change is small [85]. - **Ether - after C4 Refinery Inventory**: The inventory has slightly increased [90][93]. - **LPG Terminal Import Inventory**: The arrival volume has fallen short of expectations, and the terminal inventory has decreased significantly month - on - month [95]. Propylene Part Price & Spread - **Propylene Industry Chain Price**: The cost - side propane is firm, while propylene is weak, and the PDH profit has declined month - on - month. The downstream trend has improved, with the powder profit remaining at the marginal level, and the PO and butanol - octanol profits have recovered [106][108]. - **Propylene Price**: The international/US - dollar price has remained flat month - on - month, while the domestic price has been weak [110][118]. Balance Sheet - **Propylene Industry Chain Operating Rate**: The PDH operating rate has increased month - on - month; the powder operating rate has further declined, while the butanol - octanol operating rate has increased significantly [128]. - **National Propylene Balance Sheet - Supply**: The overall supply situation and the operating rate changes of various production methods are analyzed. The PDH operating rate is expected to decline in Q1 [130]. - **National Propylene Balance Sheet - Demand**: The demand situation of various downstream products and their operating rate changes are presented [136]. - **Shandong Propylene Balance Sheet - Supply**: The supply situation and operating rate changes in Shandong are provided. The supply is expected to change with the restart of some devices [143]. - **Shandong Propylene Balance Sheet - Demand**: The demand situation and operating rate changes of downstream products in Shandong are shown [146]. - **Shandong Region (Including Lianyungang, Jiangsu, and Haiwei) Propylene Balance Sheet - Supply**: The supply situation and operating rate changes in this region are given [148]. - **Shandong Region (Including Lianyungang, Jiangsu, and Haiwei) Propylene Balance Sheet - Demand**: The demand situation and operating rate changes of downstream products in this region are presented [153]. Supply - **Overall Upstream Operating Rate**: The overall upstream operating rate of propylene is 75.0% (+0.9%) [157]. - **Refinery/Principal Operating Rate**: The principal refinery operating rate remains at 75%, and the independent refinery operating rate in Shandong is 56%, with profits similar to those in 2024 [159]. - **Cracking/Ethylene Cracking Operating Rate**: The ethylene cracking operating rate is 82.8% (- 0.4%), and the cracking profit center has slightly recovered month - on - month [167]. - **PDH Operating Rate**: The PDH capacity utilization rate is 76.4% (+1.4%). Due to many maintenance plans in January and February, the PDH operating rate in Q1 is expected to decline to around 70% [172][176]. - **MTO Operating Rate**: The MTO capacity utilization rate is 87.8% (- 1.7%) [177]. - **Propylene Import and Export**: The monthly import volume of propylene has increased, and the import profit has decreased [182][185]. Demand - **PP Operating Rate**: The PP capacity utilization rate is 76.9% (- 2.5%). Some devices in Shandong and Northeast China have had operating rate changes [192][196]. - **PP Profit**: The PP price has stopped falling, and the external procurement profit has slightly recovered month - on - month [197]. - **PP Powder Operating Rate**: The PP powder capacity utilization rate is 37.6% (+0.7%); the powder - propylene price difference has continued to recover, and some devices have resumed operation [213]. - **PO Operating Rate**: The PO capacity utilization rate is 74.1% (- 2.0%). Some devices have stopped or reduced production, and the operating rate is expected to decline slightly next week [223][227]. - **PO Profit**: The PO price has increased, and the profit has improved [229][234]. - **Acrylonitrile Operating Rate**: The acrylonitrile capacity utilization rate is 80.3% (- 0.3%). One device in Shandong has stopped for maintenance [236][238]. - **Acrylonitrile Profit**: The acrylonitrile profit has increased [237][240]. - **Acrylic Acid Operating Rate**: The acrylic acid capacity utilization rate is 79.9% (+0.4%). One device in Shandong has stopped for maintenance [241][247]. - **Acrylic Acid Profit**: The acrylic acid profit has increased [243][244]. - **n - Butanol Operating Rate**: The n - butanol capacity utilization rate is 79.9% (+2.1%). Some devices have had short - term stops and restarts [249][253]. - **n - Butanol Profit**: The n - butanol profit has increased significantly [252][253]. - **Octanol Operating Rate**: The octanol capacity utilization rate is 85.0% (+3.0%). Some devices have started up or had unstable operations [255][258]. - **Octanol Profit**: The octanol profit has increased significantly [257]. - **Phenol - Ketone Operating Rate**: The phenol - ketone capacity utilization rate is 78.5% (+2.5%). Some devices have restarted or had short - term fluctuations [260][266]. - **Phenol - Ketone Profit**: The phenol - ketone profit has increased [264][265]. - **ECH Operating Rate**: The ECH operating rate is 50.8% (+2.4%) [271]. Downstream Inventory - **PP and PP Powder Inventory**: The inventory of PP production enterprises, traders, and ports has changed slightly. The PP powder inventory has also changed slightly [275][284]. - **Other Downstream Inventory**: The inventories of phenol, acetone, acrylonitrile, etc. in ports and factories have changed to varying degrees [286][287].

Report Overview - The report is a weekly C3 industry chain report from Guotai Junan Futures, dated December 21, 2025 [1] Investment Rating - Not provided in the report Core Views LPG - Short - term trend is weak. Supply increases slightly while demand remains mixed. Long - term, the propane market is expected to be looser in 2026, with downward pressure on prices [3][4] Propylene - There are expectations of reduced supply and increased demand in the short - term, providing support for the price. The market is expected to stabilize and rebound [6] Summary by Section LPG Part Price & Spread - Domestic LPG spot prices show regional differentiation, with import costs weakening. Propane prices are weak this week. The propane internal - external price spread has been quickly restored and is currently at a relatively high level year - on - year [9][35] Supply - US LPG shipments are relatively stable, while Middle East LPG shipments are tight with delays. The total domestic LPG commodity volume is 51.8 tons (+0.8%), with civil gas at 21.8 tons (-0.3%). The propane supply in China is 53.55 tons, a 18.08% week - on - week decrease [45][52][67] Demand & Inventory - Chemical demand: PDH and MTBE operating rates have both increased. LPG inventory is generally lower year - on - year, and there has been destocking this week at refineries and ports [82][84][100] Propylene Part Price & Spread - The upstream cost of propane has weakened, and propylene prices have declined from stable. PDH profits have improved significantly week - on - week. Downstream prices are generally weak, with PP profits showing some repair and PO and butanol - octanol profits declining [111][113] Balance Sheet - Supply: PDH is deeply in the red, but the willingness to shut down is currently limited. The operating rate is expected to remain at a medium - high level in December and decline in the first quarter. Demand: The powder - propylene price spread has improved, but PP powder external procurement plants remain shut down due to losses. Overall, the propylene supply - demand pressure in Shandong is still high in December and is expected to improve in January [134][157] Supply - The overall upstream operating rate of propylene is 74.1% (-0.1%). Refinery operations are relatively stable, ethylene cracking operating rates have decreased slightly, PDH operating rates have increased by 2.1% to 75.0%, and MTO operating rates have decreased slightly to 89.5% [164][181][187] Demand - PP operating rate is 79.4% (+1.1%), but profits continue to decline. PP powder operating rate is 36.9% (-2.6%), and the powder - propylene price spread has improved, yet plants remain shut down. PO operating rate is 76.1% (+0.3%), acrylonitrile operating rate remains flat at 80.6%, acrylic acid operating rate is 79.4% (-0.3%), n - butanol operating rate is 67.8% (+9.3%), octanol operating rate is 82.0% (+5.0%), phenol - ketone operating rate is 76.0% (-3.5%), and ECH operating rate is 48.4% (+0.9%) [202][218][227] Downstream Inventory - PP and powder inventories show little change. Inventories of other downstream products such as phenol, acetone, and acrylonitrile also have minor fluctuations [280][290][291]

Report Information - Report Title: "Profit Rebalancing under Rhythm Game - Outlook for LPG & Propylene Futures Market in 2026" [1] - Report Date: December 18, 2025 - Analysts: Chen Xinchao (Investment Consulting Qualification No.: Z0020238), Zhao Shucen (Contact Person, Futures Practitioner Qualification No.: F03147780) 1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints of the Report - The operating logic of the C3 industrial chain is expected to shift from unilateral compression in 2025 to profit repair under range - bound fluctuations in 2026. The propane price center is likely to remain relatively low, providing weak cost - side support for the C3 industrial chain. Meanwhile, with the slowdown of propylene capacity expansion and the continued drive from downstream sectors, the supply - demand outlook for propylene is expected to improve marginally, but attention should be paid to the actual implementation of new plant construction under the low - profit background. The opportunities in the industrial chain mainly lie in periodic repairs rather than a trend reversal [2]. 3. Summary by Directory 3.1. 2025 LPG, Propylene Trend Review 3.1.1 2025 LPG Market Review - The LPG market in 2025 can be divided into four stages: In the first quarter, the domestic civil gas market was in a seasonal peak. The spot price of the lowest deliverable product in the domestic market was around 4,800 - 4,900 CNY/ton, and the market fluctuated widely with costs. From April to May, affected by tariff policies, the external market price of crude oil and FEI market prices plummeted, and then rebounded. The domestic market was weak due to high inventory and low demand. From June to September, with the shift of the import trade center to the Middle East, the supply was stable, but the demand was weak, and the market was under pressure. In the fourth quarter, the CP price dropped, PDH profit was briefly repaired, and the chemical demand increased. The supply - demand situation improved, but the long - term supply was still loose [8][9]. 3.1.2 2025 Propylene Market Review - The propylene market in 2025 also had three stages: In the first quarter, new capacity led to an oversupply situation, and the price declined. From June to August, due to the shutdown of main production plants and maintenance of multiple devices, the supply tightened, and the price rebounded, but the sustainability was limited due to weak downstream demand. In the fourth quarter, the downstream profit was compressed, demand weakened, and the price dropped to a five - year low [11][13][14]. 3.2. 2026 LPG Operating Logic 3.2.1 Supply Side - In 2025, China's LPG imports remained stable, but the import structure changed significantly. After the adjustment of Sino - US tariff policies in April, the import from the Middle East increased, while that from the US decreased. In 2026, the Middle East's LPG supply has an expected increase, with the main increment concentrated in the second half of the year. The US production growth is expected to slow down, but the export capacity will improve [15][18][34]. 3.2.2 Demand Side - The growth of PDH capacity will further slow down in 2026, and the profit is expected to be repaired. The average operating rate of PDH is expected to increase, driving an additional propane demand of about 2 million tons. The demand for imported propane from domestic cracking plants is expected to remain weak. The propane demand in Japan and South Korea is expected to remain stable, and the growth rate of India's propane demand is expected to slow down, while Southeast Asia's demand may continue to be supported by the operation of existing cracking plants [41][44][52]. 3.2.3 LPG Summary - The supply - demand pattern of propane in 2026 shows a characteristic of "tight at the beginning and loose later, gradually becoming looser". In the first quarter, the supply is relatively tight, but better than in the fourth quarter of 2025. In the second quarter, the market is in a transition period. In the second half of the year, with the release of new capacity in the Middle East, the supply - demand pattern will become looser [57]. 3.3. 2026 Propylene Operating Logic 3.3.1 Supply Side - In 2025, the propylene supply expanded rapidly, and the over - supply situation intensified. In 2026, the growth rate of propylene capacity is expected to slow down to about 9%. The new capacity is mainly concentrated in the second half of the year, and most of the new capacity comes from integrated plants. The supply is still expected to be loose, and the focus will shift to the risks of structural and rhythm mismatches [59][67]. 3.3.2 Demand Side - In 2025, the demand for propylene from major downstream sectors increased by 15%. In 2026, the nominal demand growth rate is about 11%, mainly from polypropylene, propylene oxide, and butanol - octanol. However, due to the over - capacity in the downstream and compressed profits, the actual demand may be less than the nominal demand [69][75]. 3.3.3 Propylene Summary - In 2025, the propylene market in Shandong was generally in a state of over - supply, with a brief tightening in the middle of the year. In 2026, the upstream and downstream production schedules of propylene show a structural characteristic of "downstream first, more downstream production throughout the year". Nationally, the supply - demand gap is expected to narrow in the first half of the year, and the overall pattern will remain stable in the second half of the year. In Shandong, the supply - demand situation is expected to improve gradually, with a possible improvement in the second half of the year [87][89]. 3.4. Overall Summary - In 2025, the global propane supply was abundant, and the price decreased. The propylene market was in an over - supply situation, and the C3 industrial chain was under pressure. In 2026, the propane price is expected to stay low, and the supply - demand situation of propylene is expected to improve marginally. The operating logic of the C3 industrial chain is expected to shift from unilateral compression to profit repair under range - bound fluctuations [95][96].