该项目总投资718732万元，其中环保投资5453万元，占总投资的0.76%。项目建设一套62400Nm3/h合成 气装置、一套50万吨/年丁辛醇装置、一套40万吨/年聚丙烯装置、一套16000Nm3/h气分装置、一座20万 立方米乙烷罐及其他配套公辅设施。项目建成后，年产合成气32.30万吨、氢气1840吨、正丁醛41.324万 吨、正丁醇23.6万吨、异丁醛9万吨、异辛醇15万吨、氧20.53万吨、氮43.36万吨、液氩0.94万吨、聚丙 烯40万吨。 中化新网讯2025年12月24日，泰州市生态环境局发布关于新浦化学(泰兴)有限公司泰州新浦化学高端化 学品项目环境影响报告书的批复。 ...

Group 1: Investment Rating - No investment rating for the industry is provided in the report. Group 2: Core Views - Since the listing of propylene futures on July 22, the price of the main contract has shown an overall downward trend, affected by factors such as a loose fundamental situation, weakened cost support, and sluggish downstream demand [1][7]. - In 2026, it is necessary to focus on the production progress of the industrial chain, the PDH's phased adjustment of the supply - demand balance, the slow - down of PP growth but persistent pressure, and changes in the import - export pattern [1][2]. - The expected price range of propylene in 2026 is between 5,400 - 6,400 yuan/ton [3]. - Recommended strategies include unilateral interval operations and variety - based interval operations such as PP - PL and PL/PG (FEI/CP) [3]. Group 3: Summary by Directory Chapter 2: Market Review - After the listing of propylene futures on July 22, the main contract price declined from a high of 6,694 yuan/ton to a low of 5,715 yuan/ton, driven by factors such as a shift to a loose fundamental situation, weakened cost support, and sluggish downstream PP demand [7]. - There were also some phased disturbance factors during the decline, including the "anti - involution" policy expectation and unstable device operations [7][8]. - The propylene basis fluctuated between - 250 and 250 yuan/ton. The futures price was affected by fundamental over - supply pressure and the weakening of the PP end, while the spot price was more sensitive to device changes [10]. - The spot price difference between propylene and polypropylene (PP) fluctuated significantly, while the futures price difference had a relatively narrow range. The PP - PL spread showed different trends at different times due to factors such as device maintenance and new capacity addition [12]. Chapter 3: Core Focus Points - **3.1 Production Growth Slowdown**: From 2019 - 2025, the cumulative new propylene production capacity was about 45.87 million tons, with an average annual compound growth rate of 13%. As of now in 2025, the newly put - into - operation capacity is about 9.93 million tons, a 14.24% increase from 2024. In 2026, the planned new capacity is about 6 - 8 million tons, with a growth rate of 7.5% - 10%. The upstream - downstream integration trend is significant, and the actual supply - demand difference is also related to the start - up situation of upstream and downstream [14][16][18]. - **3.2 PDH's Phased Adjustment of Supply - Demand Balance**: PDH and refinery catalytic cracking devices have a greater impact on the propylene trading market. In 2025, the overall PDH operating rate was around 71%, with profit being the core driving factor. In 2026, low profit may become the norm, and some enterprises under greater operating pressure may arrange maintenance. Attention should be paid to enterprises with frequent start - stop operations and those that can significantly affect regional prices [20][21][23]. - **3.3 PP Growth Slowdown but Persistent Pressure**: The price of the propylene main contract is highly correlated with the PP futures price. In 2025, the total production capacity of polypropylene powder and granules reached 57.85 million tons, with a growth rate of 10.82%. In 2026, the planned new production capacity is 3.6 - 4.4 million tons, mainly concentrated in the second half of the year. Attention should be paid to the production rhythm, maintenance, and capacity clearance on the supply side, as well as domestic demand resilience and export increments on the demand side [25]. - **3.4 Import - Export Pattern Changes**: China is still a net importer of propylene. In January - October 2025, 1.83 million tons were imported, with 1.25 million tons from South Korea, accounting for 68.31% of the total imports. South Korea plans to restructure its petrochemical business, which may lead to a reduction in China's propylene imports from South Korea and have a positive impact on the domestic supply - demand and price [30][31][33]. Chapter 3 (Continued) - **3.1 Valuation Feedback**: PDH profit has room for repair. In the fourth quarter of 2025, the PDH profit space was significantly compressed. After the new year, some enterprises may arrange maintenance, and the PDH profit is expected to recover to some extent. The PP - PL spread is oscillating at a low level, and there may be some room for expansion in the future if PP device maintenance increases [36][38]. - **3.2 Supply - Demand Outlook**: From January - November 2025, the domestic propylene production was 55.35 million tons, a 13.82% year - on - year increase, with an average operating rate of 74%. In 2026, the production is expected to remain high, and the supply will remain loose. The demand side is affected by the over - supply pressure of PP and other downstream industries, and the over - supply pressure will increase with new capacity addition [40][42]. - **Shandong Market Balance**: The supply in the Shandong market is mainly affected by PDH and refinery catalytic cracking, with PDH having greater fluctuations. The demand is mainly affected by PP and PO. In 2026, attention should be paid to the operation of existing capacities on the supply side and the start - up of new downstream devices on the demand side [45][46].

南华期货丙烯产业周报 ——宽松延续，关注检修 戴一帆（投资咨询资格证号：Z0015428） 研究助理：沈玮玮（期货从业证书：F03140197 ） 联系邮箱：shenweiwei@nawaa.com 交易咨询业务资格：证监许可【2011】1290号 2025年12月21日 第一章 核心矛盾及策略建议 1）宏观情绪与政策扰动：近期盘面多受到"反内卷"相关消息的影响，驱动一些化工品低位反弹，短期市场仍 受情绪主导，反弹持续性有待观察。 2）现货供需相对平稳：本周供需差整体变动不大，供应端广州石化重启、劲海化工检修，整体开工及产量变 动不大；需求端本周小幅增加，PP依然维持较高的开工水平，其他下游正丁醇在装置复产下开工小幅抬升。 山东市场，本周供增需减，价格小幅承压下跌。 3）主要下游PP压制明显：PP供应充足，其与丙烯价差显著收缩，现货端价差最低压缩至0下，盘面主力价差 同样处于低位。尽管价差已至低位，PP端尚未出现大规模检修，疲弱的价格持续压制丙烯走势。短期"反内 卷"可能引发盘面阶段性反弹，但预计以情绪修复为主。 4）PDH利润压力：外盘丙烷价格维持强势，当前PDH成本约在6200-6400元/吨，行业持续处 ...

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].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The propylene market maintains a loose pattern, with the 03 contract expected to oscillate between 5,700 - 6,200 yuan/ton. The market is affected by a generally loose fundamental situation and the weak trend of PP. Although the supply - demand gap has improved compared to October, enterprise inventories remain high. The continuous decline of PP prices and the significant compression of its price difference with propylene also suppress the propylene market [2][3][5]. Summary by Relevant Catalogs Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - The "anti - involution" issue may be repeatedly submitted, affecting market expectations, but there is no actual progress. The overall chemical sentiment was weak this week, with prices falling again after a slight rebound last week [2]. - Spot prices are easily affected by individual device fluctuations. Although the supply - demand difference changed little this week, spot prices remained stable due to the postponed restart of some devices. In the Shandong region, Hengtong restarted this week, and Binhua is expected to restart in mid - December, increasing the overall supply expectation [2]. - The main downstream product, PP, has sufficient supply. The price difference between PP and propylene has significantly shrunk recently, with some PP devices entering maintenance, but overall PP operation remains at a high level, providing demand support while also suppressing the propylene market [2]. - The price of external propane at a low level rebounded with crude oil, and the premium has strengthened significantly recently. The calculated cost is around 6,250 - 6,500 yuan/ton, and the PDH profit continues to show losses. Attention should be paid to the negative feedback from the profit, but there are currently no more maintenance plans [2]. 1.2 Trading Strategy Recommendations - **Market Positioning**: The market is expected to be weakly oscillating, with the PL03 price range between 5,700 - 6,200 yuan/ton. The overall trend remains weakly oscillating. In the short term, it gets some support from the significant increase in costs, but the upward potential is limited. The negative feedback from the PDH end should be monitored, and the market is regarded as weak until more negative feedback emerges [16]. - **Basis, Calendar Spread, and Hedge Arbitrage Strategy Recommendations** - **Basis Strategy**: The basis is expected to oscillate. This week, due to the postponed restart of production, spot prices remained stable, while the futures market was affected by the overall chemical sentiment and the weak PP price, causing the basis to strengthen [17]. - **Calendar Spread Strategy**: Consider reverse arbitrage for the 1 - 3 spread when the price is high [17]. - **Hedge Arbitrage Strategy**: Consider widening the PP - PL spread when the price is low and wait and see; consider widening the PL/PG ratio and wait and see. The price difference between PP pellets and propylene is around 100 yuan/ton, and that between PP powder and propylene is around 600 yuan/ton in the spot market, and it has also compressed to around 440 yuan/ton in the futures market. One can enter the market when the price is low and pay attention to the maintenance situation of the PP end [17]. - **Recent Strategy Review** - The strategy of narrowing the PP01 - PL03 spread (take profit) was proposed on November 7 and took profit on November 20. Currently, wait and see for opportunities to enter the market to widen the spread. - Hold the reverse arbitrage of PL01 - 03, which was entered on December 5. Conduct range - bound operations on PL01 - 03, mainly focusing on reverse arbitrage [17]. 1.3 Industrial Customer Operation Recommendations - **Inventory Management**: For enterprises with high finished product inventories worried about propylene price drops, they can short - allocate propylene futures at high prices according to their inventory to lock in profits. Sell PL2603 futures contracts with a hedging ratio of 50% when the price is between 6,100 - 6,200 yuan/ton. They can also sell call options on PL2603C6200 to collect premiums and reduce costs, with a hedging ratio of 25% and a recommended entry range of 80 - 100 [18]. - **Procurement Management**: For enterprises with low regular procurement inventories that hope to purchase according to orders, they can buy propylene futures at low prices to lock in procurement costs. Buy PL2603 futures contracts with a hedging ratio of 25% when the price is between 5,700 - 5,800 yuan/ton. They can also sell put options on PL2603P5700 to collect premiums and reduce procurement costs, with a hedging ratio of 25% and a recommended entry range of 100 - 120 [18]. Chapter 2: This Week's Important Information and Next Week's Attention Events 2.1 This Week's Important Information - **Positive Information** - The Russia - Ukraine peace talks have no results, and there is still some distance from reaching an agreement, causing a slight increase in the crude oil market [23]. - The probability of the Fed cutting interest rates by 25BP in December is 93% according to Polymarket [23]. - Spot prices are relatively stable [23]. - **Negative Information** Some of the currently shut - down PDH devices will gradually restart. If there is no more negative feedback, the supply side will remain loose [20]. 2.2 Next Week's Important Events to Watch - The Politburo meeting and the Central Economic Work Conference will be held [24]. - The US October PCE price index will be released [24]. - The US FOMC interest rate decision will be announced [24]. Chapter 3: Disk Interpretation 3.1 Price - Volume and Capital Interpretation - **Domestic Market** - **Unilateral Trend and Capital Flow**: This week, the PL03 contract oscillated downward. The net positions of major profitable seats increased, the net positions of the top five long - position holders in the dragon - tiger list remained unchanged, the top five short - position holders significantly increased their positions, the net long positions of profitable seats slightly increased, the net long positions of foreign capital slightly decreased, and the net short positions of retail investors slightly increased [22]. - **Technical Analysis**: The PL03 contract was generally weakly oscillating this week. The daily - line middle track still exerted pressure, and currently, there seems to be support around 5,800 yuan/ton [22]. - **Basis and Calendar Spread Structure** - This week, the basis of propylene 03 was 172 yuan/ton, an increase of 112 yuan/ton compared to last week. Spot prices remained stable while futures prices declined. The 01 - 03 calendar spread of propylene was + 126 yuan/ton, an increase of 69 yuan/ton compared to last week [27]. Chapter 4: Valuation and Profit Analysis 4.1 Up - Mid - Downstream Profit Tracking in the Industrial Chain - **Upstream Profit**: This week, the gross profit of major refineries was 593 yuan/ton (- 29 yuan/ton), and that of Shandong local refineries was 232 yuan/ton (+ 59 yuan/ton). The cracking end has been relatively stable recently due to the resumption of production at Zhenhai [29]. - **Mid - stream Profit**: The propane cracking profit has significantly declined, reducing the economic viability of LPG cracking. The PDH profit based on FEI as the cost was - 350 yuan/ton (+ 80 yuan/ton), and that based on CP as the cost was - 505 yuan/ton (+ 47 yuan/ton). The PDH profit remains in a loss state [31]. - **Down - stream Profit** - The price difference between PP拉丝 and propylene is 100 yuan/ton (- 75 yuan/ton), and that between PP powder and propylene is 60 yuan/ton (- 75 yuan/ton), with the spread compressed to a low level [35]. - The profit of epoxy propane PO/SM is 1,365 yuan/ton (+ 126 yuan/ton), the HPPO profit is - 834 yuan/ton (+ 61 yuan/ton), and the chlorohydrin method profit is 178 yuan/ton (- 106 yuan/ton) [35]. - The acrylonitrile profit is - 1,189 yuan/ton (+ 58 yuan/ton), oscillating this week but with large overall losses [35]. - The acrylic acid profit is - 78 yuan/ton (- 18 yuan/ton), with the profit weakening, and attention should be paid to the subsequent operation situation [35]. - The butanol profit is + 182 yuan/ton (+ 657 yuan/ton), with a significant improvement in profit [35]. - The octanol profit is + 702 yuan/ton (+ 607 yuan/ton), with the profit recovering from a low level as the supply decreases [35]. - The phenol - acetone profit is - 990 yuan/ton (- 367 yuan/ton), with the profit weakening. Currently, PO, butanol, and octanol have some profits, while others are mostly in a loss state [35][36]. 4.2 Import - Export Profit Tracking The price difference between Chinese and South Korean propylene has recently increased slightly, with CFR China at 745 US dollars (+ 10 US dollars) [45]. Chapter 5: Supply - Demand and Inventory Deduction 5.1 Supply - Demand Balance Sheet Deduction in the Shandong Market This week, both supply and demand in the Shandong market increased, and spot prices slightly rose. The increase in supply mainly came from the resumption of production at Hengtong, and the increase in demand came from the resumption of production and increased operation of devices such as PO and acrylic acid. In the future, supply will slightly increase with the resumption of production at Binhua [47]. 5.2 Market Supply Side and Deduction This week, there were both start - ups and shut - downs. The overall propylene operation rate was 74.06% (- 0.06%), still at a high level [50]. 5.3 Demand Side and Deduction - **PP**: This week, the price difference between PP pellets and powder and propylene continued to shrink, and the overall operation rate declined, but there were not many maintenance plans. The price difference between PP powder and propylene has compressed to a low level, and maintenance has increased [62][70]. - **Epoxy Propane**: This week, the price of epoxy propane declined, the profit of the chlorohydrin method decreased, but the inventory was still in a destocking state. This week, Shandong Xinyue and Qixiang Tengda increased their operation rates, while Shandong Binhua, Zhonghai Jingxi, and Shandong Minxiang slightly decreased their operation rates, and the overall operation rate slightly increased [71]. - **Acrylonitrile**: There was little change [73]. - **Butanol and Octanol** - Ningxia Jiuhong restarted and increased its operation rate. The 450,000 - ton device of Tianjin Bohua is expected to start operation at the end of December, and the 140,000 - ton device of Jiangsu Huachang is expected to start operation in mid - to - late December [78][80]. - **Acrylic Acid**: Shanghai Huayi slightly decreased its operation rate, Wanhua slightly increased its operation rate, Binhai Chemical stopped for maintenance, and Qixiang Tengda recently restarted [84]. - **Phenol - Acetone**: Taihua Xingye is expected to conduct maintenance for about one and a half months [86]. - **Shandong Regional Demand**: Demand in the Shandong region increased this week. The increase mainly came from the resumption of production and increased operation of PP, PO, acrylonitrile, and octanol [87].

1. Report Industry Investment Rating - The investment rating for the propylene industry in 2026 is "Neutral" for single - side trading [2][11] 2. Core Viewpoints of the Report - In 2026, the fundamental pressure on propylene's market is difficult to change, with prices expected to oscillate weakly, refinery profits shrinking, and PDH profits gradually contracting. Although the demand increment from downstream propylene projects in 2026 is greater than the propylene production capacity increase, most downstream projects are scheduled for the fourth quarter. Therefore, the supply - demand situation will remain loose in the first half of the year, and attention should be paid to the PL03 - 05 inter - period reverse arbitrage opportunity. With the peak of downstream production capacity coming in the second half of the year, propylene inventory may gradually be reduced [2][11] 3. Summaries According to Relevant Catalogs 3.1 Market News and Important Data - **New Capacity**: 2026 is still a propylene production capacity expansion period in China, but the growth rate is expected to slow down compared to 2025. The expected new propylene production capacity in 2026 is 7.36 million tons, with a nominal capacity growth rate of 9.3% (the actual capacity growth rate weighted by the commissioning time is about 4.4%), significantly lower than that in 2025 [6][25] - **Supply Pattern**: In 2025, China's propylene industry was in a rapid capacity expansion period, with new production capacity reaching 9.485 million tons, intensifying the market supply pressure. The supply in the Shandong market remained loose [6][35] - **Import - Export Pattern**: In 2025, China's propylene imports generally decreased, and the import dependence gradually declined. The cumulative import volume from January to October was 1.8349 million tons, a year - on - year increase of 14.96%, and the cumulative export volume was 26,900 tons, a year - on - year decrease of 61.67%. The import dependence is expected to further decline [7][53] - **Demand Increment**: The propylene demand converted from downstream new projects in 2026 is 8.24 million tons, with a nominal growth rate of 9.57%. However, due to the concentration of downstream projects in the fourth quarter, the weighted actual demand growth rate may be only 3.86%, lower than the actual growth rate of new propylene production capacity. The inventory pressure will persist in Q1 - Q2, and the inventory may gradually be reduced in the second half of the year [7][116] 3.2 Market Analysis - In 2025, propylene supply was at a high level, with high upstream inventory and continuous price pressure. The core factor was the lack of obvious highlights in terminal demand. In the short term, there was no obvious sign of demand improvement. In the first half of 2026, the focus was on digesting the existing high inventory, but the supply remained loose. Attention should be paid to the positive feedback from PDH device maintenance [8] 3.3 Propylene 2025 Market Review - The domestic propylene spot price showed a downward trend in 2025, affected by supply - demand and cost factors. The price trend can be divided into four stages: a decline from the beginning of the year to early June, a short - term increase from late June to early August, a sharp decline from October to early November, and a weak rebound at the end of the year [17] - The propylene futures price showed a fluctuating downward trend, affected by the loose supply - demand situation and weak international oil prices. The game between warehouse receipt registration and delivery was an important factor affecting the futures price [18] 3.4 2026 China Propylene Commissioning Situation - From 2021 - 2025, the compound growth rate of propylene production capacity was 11.97%, with 9.485 million tons of new capacity in 2025, a growth rate of 13.6%. In 2026, the new capacity is expected to be 7.36 million tons, with a nominal growth rate of 9.3% (actual growth rate about 4.4%), lower than that in 2025 [25] 3.5 Propylene Supply Pattern and Production Profit Analysis - In 2025, the propylene supply was loose due to capacity expansion. The low - point of propylene operation mainly occurred in mid - to - late May, affected by PDH device maintenance. The profit of major refineries and PDH devices was compressed, which dragged down the operation rate, while the coal - based operation was less affected by profit [35][49] 3.6 Propylene Import - Export Pattern Analysis - In 2025, China's propylene imports decreased, and the import dependence declined. The import window remained closed, and the domestic price advantage was obvious. The import dependence is expected to further decrease [53] 3.7 Propylene Upstream Raw Material Propane Pattern Analysis - The price of propane had a significant impact on the profit of domestic PDH devices. In 2025, the propane price fluctuated greatly, affected by factors such as Sino - US tariffs, market demand, and supply. The price decline in the second half of the year compressed the profit of PDH devices and led to a decline in the operation rate [70] 3.8 Propylene Downstream Pattern Analysis - **Downstream Profit and Demand**: In 2025, the profit of propylene downstream products shrank, and the demand support was weak. Downstream factories mainly purchased propylene on a rigid - demand basis, putting downward pressure on the propylene price [86] - **2026 Downstream Commissioning Situation**: In 2026, the commissioning pace of propylene downstream projects slowed down. The converted propylene demand from downstream new projects was 8.24 million tons, with a nominal growth rate of 9.57%. However, the weighted actual demand growth rate may be only 3.86%, lower than the actual growth rate of new propylene production capacity. The inventory pressure will persist in the first half of the year and may be reduced in the second half [109][116] 3.9 Propylene and Downstream Inventory Situation and Outlook - In 2025, the propylene inventory remained high, and the high - production growth rate may continue in 2026. The inventory pressure of propylene and its downstream products such as PP and acrylonitrile will persist in the first half of 2026, but the PP inventory may be reduced in the first half of 2026 due to the slowdown of new capacity commissioning [117]

Report Industry Investment Rating - Not provided Core View of the Report - The domestic propylene futures market is facing dual pressures of continuous capacity expansion and weak downstream demand, with an imbalanced supply - demand fundamental. The price of propylene futures is expected to maintain a weak and volatile pattern in the short term, and the real improvement of the fundamentals requires the appearance of an inventory inflection point [2][6] Summary by Relevant Catalogs Supply Situation - China's propylene production capacity is in a rapid expansion cycle. In 2024, the total production capacity reached 70.44 million tons/year with a utilization rate of 76.6%. In 2025, over 5 million tons of new capacity is expected to be released. The PDH process is the main force for expansion, but most PDH plants face cost pressures and operate at a low utilization rate. In October 2025, the output was 5.476 million tons, a month - on - month increase of 5.2% and a year - on - year increase of 15.77%, and the capacity utilization rate was 74.0% [2] - Import profit is in a continuous inversion state, suppressing import volume. Although there is some room for export growth, the overall export volume remains stable, and domestic supply mainly depends on domestic demand [3] Inventory Situation - The port inventories in major distribution centers such as Shandong and East China are on an upward trend, and the social total inventory is estimated to be around 1.8 million tons. The inventory - to - consumption ratio is rising, and the production enterprise's in - plant inventory is also at a historical high. Downstream factories adopt a low - inventory strategy, which intensifies the upstream shipment pressure [3] Demand Situation - Although the downstream production capacity of propylene is growing, the terminal demand recovery is far below expectations, showing a "weak in peak season" situation. Downstream enterprises are mostly in a loss state, with low acceptance of high - priced raw materials and only maintaining rigid demand [3] - The performance of downstream products is differentiated. PP has relatively stable operating rates, but the profitability of different production routes varies greatly. Epoxy propane, butanol - octanol, and phenol - acetone are in losses, while acrylic acid and esters are profitable. Overall, the downstream's willingness to purchase propylene is severely suppressed [4] Macro - factor Influence - The end of the US government "shutdown" and the reduced probability of a Fed rate cut in December have weakened the macro - optimistic expectations for propylene futures. The market focus has returned to the industrial fundamentals, and the propylene futures price is more likely to be dragged down by the fundamentals [4][5]

Investment Rating - The investment rating for the company is "Outperform" (maintained) [1] Core Views - The company's Q3 performance met expectations, with a slight narrowing of price differentials during the traditional off-season, and asset impairment is expected to ease in the future [6] - The company reported a total revenue of 21.918 billion yuan for the first three quarters of 2025, with a year-on-year growth of 1.6%, and a net profit attributable to shareholders of 1.023 billion yuan, down 35% year-on-year [6] - The company is progressing well with its ongoing projects, which supports significant long-term development potential [6] Financial Data and Profit Forecast - Total revenue forecast for 2025 is 30.78 billion yuan, with a year-on-year growth rate of 3.4% [5] - The net profit attributable to shareholders for 2025 is projected to be 1.499 billion yuan, a decrease of 26.1% year-on-year [5] - The company’s gross margin is expected to be 13.8% in 2025, with a return on equity (ROE) of 7.5% [5] - The company has adjusted its 2025 profit forecast downwards due to asset impairment, now expecting a net profit of 1.499 billion yuan compared to the previous estimate of 1.914 billion yuan [6]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company reported a revenue of 1.941 billion yuan for the first three quarters of 2025, an increase of 14.63% year-on-year. The net profit attributable to shareholders was 153 million yuan, up 5.14% year-on-year [2][6]. - In Q3 2025, the company achieved a revenue of 692 million yuan, a year-on-year increase of 3.61%, but a quarter-on-quarter decrease of 1.28%. The net profit attributable to shareholders was 33 million yuan, down 46.18% year-on-year and down 51.90% quarter-on-quarter [2][6]. - The company has a contract asset of 190 million yuan in Q3 2025, which is a 102.8% increase compared to the beginning of the year, mainly due to the confirmation of income from various engineering projects [13]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a total revenue of 1.941 billion yuan, with a net profit of 153 million yuan. The Q3 revenue was 692 million yuan, with a net profit of 33 million yuan [2][6]. - The projected net profits for 2025, 2026, and 2027 are 250 million yuan, 370 million yuan, and 500 million yuan, respectively, with corresponding PE ratios of 22.8X, 15.3X, and 11.3X [13]. Market and Industry Analysis - The chemical sector is under pressure, with the average market price of normal propanol around 7070 yuan/ton in Q3 2025, down 1.9% quarter-on-quarter [13]. - The company is advancing coal chemical projects and refining transformation projects, supported by national policies aimed at enhancing efficiency and reducing costs [13]. Product and Technology Development - The company is the largest producer of normal propanol in China and is focusing on optimizing production processes for various aldehydes and alcohols [13]. - The high-end cellulose products are expected to benefit from domestic substitution trends, with a significant production capacity upgrade planned for acetate butyrate cellulose [13].

Core Viewpoint - Anhui Shuguang Chemical Group Co., Ltd. is facing scrutiny from regulators and the market due to abnormal fluctuations in net profit, high proportion of related party transactions, and allegations against its actual controller, Yu Yongfa, for illegally holding shares on behalf of seven state-owned enterprise leaders [2][17][24] Group 1: Financial Performance and Governance Issues - The company has shown significant volatility in its financial performance, with net profits fluctuating dramatically over the past few years, raising concerns about its governance and compliance [6][10] - Shuguang Group's financial statements reveal a stark contrast between reported net profit and actual earnings, indicating potential issues with its internal equity structure and arrangements [2][11] - The actual controller, Yu Yongfa, has been implicated in manipulating the company to lend large sums to related parties without repayment, highlighting serious internal control deficiencies [2][26] Group 2: IPO and Investment Plans - The company aims to raise approximately 1.5 billion yuan through its IPO, primarily to fund projects including a 100,000-ton BDO and 12,000-ton PBAT production facility, a 46,000-ton PTMEG project, and a research center [4][5] - Despite its significant production capacity in cyanide, Shuguang Group's revenue has been declining, with a reported revenue of 3.78 billion yuan in 2021, decreasing to 3.54 billion yuan in 2023 [6][9] Group 3: Related Party Transactions and Control Structure - Shuguang Group heavily relies on related party transactions, raising questions about its independence and profitability [3][15] - The largest shareholders of its most profitable subsidiary, Shuguang Dingshin, are state-owned enterprises, with Yu Yongfa only holding a minority stake, suggesting that the company may not be leveraging its full potential for profit [11][14] Group 4: Compliance and Regulatory Concerns - The company has a history of compliance issues, including the illegal transfer of state-owned shares and the involvement of state enterprise leaders in shareholding arrangements that may constitute a conflict of interest [17][22] - Safety management has also been a concern, with past incidents resulting in fatalities, raising doubts about the company's commitment to regulatory compliance [28]