1. Report Industry Investment Rating - Not provided in the document 2. Core Views of the Report - The PE market is in a supply - strong and demand - weak situation in the short term, and it is expected to maintain a low - level oscillation pattern. The supply pressure continues to increase, while the demand support is insufficient. In the medium - and short - term, a bearish view is taken, and in the long - term, the supply pressure of non - standard PE products may suppress LLDPE prices [1][6]. 3. Summary by Relevant Catalogs 3.1 Core Contradictions and Strategy Recommendations 3.1.1 Core Contradictions - Supply side: The pressure is continuously increasing. There are few subsequent device maintenance plans, and the start - up rate is expected to continue to rise. In the fourth quarter, new device startups are still concentrated, such as the upcoming startups of two sets of Guangxi Petrochemical's devices [1]. - Demand side: The support is insufficient. Although the agricultural film industry is in the traditional peak season, the overall start - up rate and order growth rate have slowed down. After mid - November, the growth space for demand will be limited, and other downstream industries of PE have insufficient new orders [1]. 3.1.2 Trading Strategy Recommendations - **Trend judgment**: Weak oscillation. The price range of L2601 is 6600 - 7000. The strategy is to short on rallies [10]. - **Basis, spread, and hedging arbitrage strategy recommendations**: No basis strategy; 1 - 5 reverse spread; short - term hedging arbitrage space is limited, and in the long - term, consider narrowing the L - P spread on the 05 contract [10]. 3.1.3 Industrial Customer Operation Recommendations - **Inventory management**: For enterprises with high finished - product inventory, they can short plastic futures to lock in profits and sell call options to reduce costs [11]. - **Procurement management**: For enterprises with low procurement inventory, they can buy plastic futures to lock in procurement costs and sell put options to reduce costs [11]. 3.2 This Week's Important Information and Next Week's Events to Watch 3.2.1 This Week's Important Information - **Positive information**: On Wednesday, affected by the news of gas restrictions on Iranian devices, the methanol futures market strengthened, and polyolefins briefly followed the upward trend [12]. 3.2.2 Next Week's Events to Watch - The start - up situation of two sets of Guangxi Petrochemical's devices [12]. 3.3 Disk Interpretation 3.3.1 Price - Volume and Capital Interpretation - **Unilateral trend and capital movement**: This week, the futures market oscillated downward. The open interest increased, and there were no obvious changes in the top five long and short positions on the order book. The net long positions of the top five profitable seats slightly increased [17]. - **Basis structure**: The spot situation in East China improved and prices stabilized, but the situations in North and South China were still weak. As of Friday, the basis in North China was - 32 yuan/ton (strengthened by 47 compared with last week), in East China was 138 yuan/ton (+107), and in South China was 248 yuan/ton (- 3) [20]. - **Spread structure**: The L1 - 5 spread shows a contango structure due to the relatively optimistic market expectation for the subsequent macro - situation and the limited start - up of LLDPE devices in the first half of next year [22]. 3.4 Valuation and Profit Analysis - With the continuous weakness of PE prices, the production profits of all production lines are compressed. Currently, the coal - based production line with the best profit is also in a loss state. Since PE devices are not very sensitive to profit conditions, short - term losses usually do not lead to unexpected shutdowns, so PE lacks strong cost - side support in a downward market [26]. 3.5 Supply - Demand and Inventory Deduction 3.5.1 Supply - Demand Balance Sheet Deduction - The supply - strong and demand - weak pattern of PE is difficult to change. On the supply side, although device maintenance has increased recently, the high inventory capacity and the upcoming start - up of multiple devices in the fourth quarter, as well as the expected increase in imports after October, will further increase the total supply of PE. On the demand side, although the production and sales of agricultural films are still good, the subsequent growth is limited, and the support from other downstream industries of PE will gradually weaken [31]. 3.5.2 Supply - Side and Its Deduction - The current PE start - up rate is 82.56% (+1.69%). Multiple devices such as Fushun Petrochemical and ExxonMobil restarted at the beginning of the month, and the device maintenance volume decreased. It is expected that the device maintenance volume will continue to decrease, and with the upcoming start - up of two sets of Guangxi Petrochemical's devices, the supply pressure of PE will remain high [38]. 3.5.3 Import - Export and Its Deduction - **Import**: The overseas market is in a loose pattern, and the continuous decline in PE prices has led to an influx of low - price goods into China. Therefore, PE imports are expected to increase in the fourth quarter [43]. - **Export**: Enterprises' enthusiasm for expanding export channels is high this year, and PE exports have increased even in the off - season, but the total volume is still small and has little impact on the PE supply - demand pattern [43]. 3.5.4 Demand - Side and Its Deduction - The current average start - up rate of PE downstream industries is 45.75% (- 0.52%). The agricultural film industry is still in the peak season, but the start - up rate and order growth rate have slowed down. As the year - end approaches, the growth space for demand is limited, and the willingness of downstream enterprises to stock up has weakened [48].

1. Report Industry Investment Rating - The report does not explicitly mention the industry investment rating. 2. Core Views of the Report - For LLDPE, the short - term market is expected to be volatile with no obvious driving factors. Supply is neutral, demand is positive, inventory is negative, basis is neutral, profit is negative, valuation is negative, and macro - policy is negative [2]. - For PP, the short - term market is also expected to be volatile with no clear drivers. Supply is neutral, demand is positive, inventory is negative, basis is neutral, profit is positive, valuation is negative, and macro - policy is negative [3]. 3. Summary by Related Catalogs 3.1 LLDPE Analysis - **Supply**: This week, China's polyethylene production was 643,500 tons, a 0.72% decrease from last week. The capacity utilization rate was 80.87%, a 0.59 - percentage - point decrease. Some plants were under maintenance, increasing the maintenance loss [2]. - **Demand**: The average downstream product start - up rate of LLDPE/LDPE increased by 1.64%. The overall agricultural film start - up rate increased by 2.75%, and the PE packaging film start - up rate increased by 0.52%. In September, China's polyethylene imports were 1.0222 million tons, a 10.07% year - on - year decrease and a 7.58% month - on - month increase [2]. - **Inventory**: The inventory of Chinese polyethylene producers was 416,000 tons, a 19.16% month - on - month decrease. The social sample warehouse inventory was 527,400 tons, a 3.30% month - on - month decrease and a 9.18% year - on - year decrease. The import cargo warehouse inventory also decreased [2]. - **Basis**: The current basis of the main contract is around 309, and the futures price is at a discount [2]. - **Profit**: The costs of oil - based, coal - based, and ethane - based production increased, while the methanol - based cost decreased. The main reason for the increase in oil prices is the US sanctions on Russia and the decline in US commercial crude oil inventories [2]. - **Valuation**: The spot price and the absolute futures price are neutral, and the near - month contract is at a deep discount [2]. - **Macro - policy**: The macro - sentiment has faded, and trading has returned to the fundamentals, with the futures price showing a weak and volatile trend [2]. 3.2 PP Analysis - **Supply**: This week, China's polypropylene production was 789,200 tons, a 1.49% increase from last week and a 17.79% increase from the same period last year. The average capacity utilization rate was 77.06%, a 1.12% increase [3]. - **Demand**: The average downstream start - up rate increased by 0.24 percentage points to 52.61%. The demand for medical products and cold - chain packaging increased, and the BOPP industry's start - up rate increased steadily. However, the plastic - weaving industry was affected by rainy weather [3]. - **Inventory**: The inventory of Chinese polypropylene producers was 595,100 tons, a 6.80% month - on - month decrease. The port sample inventory decreased by 2.25% month - on - month, and the trader sample inventory decreased by 7.80% month - on - month [3]. - **Basis**: The current basis of the main contract is around - 20, and the futures price is around par [3]. - **Profit**: This week, the profits of coal - based, methanol - based, and externally - purchased propylene - based PP production improved, while the profits of oil - based and PDH - based PP production declined [3]. - **Valuation**: The spot price and the absolute futures price are neutral, and the near - month contract is at a discount [3]. - **Macro - policy**: The macro - sentiment has faded, and trading has returned to the fundamentals, with the futures price showing a weak and volatile trend [3]. 3.3 Main Weekly Data Changes - **Prices**: PP futures price decreased by 1.08%, PE futures price decreased by 1.00%, LLDPE CFR decreased by 1.22%, and ethylene CFR decreased by 3.85% [5]. - **Production and Start - up Rates**: PP production decreased by 5.22%, PE production decreased by 0.72%, PP start - up rate increased by 4.83%, and PE start - up rate decreased by 0.73% [5]. - **Inventory**: PP factory inventory decreased by 5.88%, PE social inventory increased by 0.10%, HDPE social inventory decreased by 3.16% [5].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The current supply-demand pattern of PE is characterized by strong supply and weak demand, which is difficult to change. The supply pressure remains high due to high inventory capacity and the successive commissioning of multiple devices in the fourth quarter, while the demand support will gradually weaken at the end of the year [1][8][33]. - In the short - to medium - term, PE is expected to show a weak and volatile trend, and a bearish view is recommended. In the long - term, the supply pressure of LLDPE may ease next year, but the supply pressure of non - standard products may suppress its price [8]. - The macro environment has a significant impact on the PE market. The weakening of the macro atmosphere and the decline in crude oil prices have led to a general decline in chemical products, and attention should be paid to subsequent policy changes [1]. Summary by Directory Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - Supply - demand level: Supply pressure is high as the total output remains high despite a slight increase in recent maintenance volume, and new devices are to be commissioned. Demand support is weak as the incremental space for demand is limited at the end of the year, and downstream raw material inventory is high [1]. - Macro level: Crude oil prices have peaked and declined, and the result of the Sino - US trade negotiation is lower than market expectations, leading to a weakening of the macro atmosphere. The influence of macro emotions and cost fluctuations on the PE market has increased [1]. 1.2 Trading - type Strategy Recommendations - Trend judgment: Weak and volatile [10]. - Price range: L2601 is between 6800 - 7100 [10]. - Strategy suggestion: Short on rallies [10]. 1.3 Industrial Customer Operation Suggestions - Price range forecast for polyethylene: 6800 - 7200 [12]. - Hedging strategies: For inventory management, short plastic futures and sell call options; for procurement management, buy plastic futures and sell put options [12]. Chapter 2: This Week's Important Information and Next Week's Attention Events 2.1 This Week's Important Information - Bullish information: Not provided in the content. - Bearish information: The Sino - US meeting result is lower than market expectations, new devices are commissioned, and the restart of some devices increases supply [18]. 2.2 Next Week's Important Events to Follow - OPEC + meeting results on December crude oil production, the situation of the Russia - Ukraine conflict, and relevant policy suggestions after the Fourth Plenary Session [18]. Chapter 3: Disk Interpretation 3.1 Price - Volume and Capital Interpretation - Unilateral trend: The disk reached a peak on Tuesday and then declined this week [20]. - Capital movement: The open interest increased this week, with no significant changes in the top five long and short positions in the order book, a slight reduction in net short positions of the top five profitable seats, and a slight increase in net short positions of the main profitable seats [20]. - Basis structure: The spot price lacks support and follows the decline of the PE disk. As of Friday, the basis in North China was - 79 yuan/ton (weakened by 20 compared with last week), in East China was 31 yuan/ton (- 10), and in South China was 251 yuan/ton (+ 70) [22]. - Spread structure: The L1 - 5 spread shows a contango structure due to the relatively optimistic macro expectations and the limited commissioning of LLDPE devices in the first half of next year [24]. Chapter 4: Valuation and Profit Analysis 4.1 Industry Chain Upstream and Downstream Profit Tracking - The production profits of all production lines have been compressed, and the coal - based production line with the best profit is also in a loss state. PE devices are not sensitive to profit conditions, so there is a lack of strong cost support during the downward trend [28]. Chapter 5: Supply - Demand and Inventory Deduction 5.1 Supply - Demand Balance Sheet Deduction - The pattern of strong supply and weak demand of PE is difficult to change. Supply pressure is high due to high inventory capacity, new device commissioning, and expected increase in imports after October. Demand support will gradually weaken as the incremental space for demand is limited at the end of the year [33]. 5.2 Supply - side and Deduction - The current PE operating rate is 80.86% (- 0.59%). Although the maintenance loss has increased, new device commissioning will still lead to high supply pressure [36]. 5.3 Import - Export and Deduction - Import: Overseas supply - demand is weak, and low - price goods are flowing into China, resulting in an increase in imports in the fourth quarter [41]. - Export: Enterprises are more active in expanding export channels, but the overall export volume is small and has little impact on the supply - demand pattern [41]. 5.4 Demand - side and Deduction - The average downstream operating rate of PE is 45.75% (- 0.38%). The agricultural film is in the peak season with increasing operating rate and orders, while the packaging film has insufficient new orders and a declining operating rate [49].

Report Summary 1. Investment Rating - For L and PP, the rating is neutral [4]. 2. Core View - The downstream demand for polyolefins is still slowly increasing, and both PE and PP are under pressure. The short - term trends of PE and PP are mainly influenced by the cost side. The supply of both is under pressure, and the demand is slowly recovering. The price of PE is in short - term shock consolidation, and the price of PP continues to be weak [2][3]. 3. Section Summaries Market News and Important Data - **Price and Basis**: L main contract closed at 6,968 yuan/ton (-41), PP main contract at 6,651 yuan/ton (-34). LL North China spot was 6,950 yuan/ton (-10), LL East China spot 7,060 yuan/ton (+0), PP East China spot 6,580 yuan/ton (-30). LL North China basis was -18 yuan/ton (+31), LL East China basis 92 yuan/ton (+41), PP East China basis -71 yuan/ton (+4) [2]. - **Upstream Supply**: PE开工率 was 80.9% (-0.6%), PP开工率 was 77.1% (+1.1%) [2]. - **Production Profit**: PE oil - based production profit was 343.2 yuan/ton (-39.1), PP oil - based production profit was -346.8 yuan/ton (-39.1), PDH - based PP production profit was 45.6 yuan/ton (-8.9) [2]. - **Imports and Exports**: LL import profit was 69.8 yuan/ton (+86.1), PP import profit was -294.7 yuan/ton (+0.7), PP export profit was -21.7 dollars/ton (-5.1) [2]. - **Downstream Demand**: PE downstream agricultural film开工率 was 49.5% (+2.4%), PE downstream packaging film开工率 was 51.3% (-1.3%), PP downstream plastic weaving开工率 was 44.2% (-0.2%), PP downstream BOPP film开工率 was 61.6% (+0.2%) [2]. Market Analysis - **PE**: OPEC+ has a production increase plan, the supply surplus expectation is strengthened, and the demand is expected to remain weak. The cost support of PE is weakened. The supply is expected to increase, and the downstream demand is still limited. The PE price is in short - term shock consolidation, and the upside space may be limited [3]. - **PP**: The oil - based cost support is weakened, but the supply - demand contradiction still exists. The supply pressure continues, and the demand is slowly recovering. The price of PP continues to be weak [3]. Strategy - **Unilateral**: Neutral for L and PP [4]. - **Inter - delivery Spread**: L01 - L05 reverse spread; PP01 - PP05 reverse spread [4]. - **Inter - commodity Spread**: None [4].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - In the short - term, polyolefins continued their downward trend this week, mainly driven by macro - sentiment and upstream cost fluctuations, with limited fundamental drivers. The market should focus on whether Sino - US trade frictions will escalate and if new stimulus policies will be introduced during the 20th Fourth Plenary Session. It is recommended to wait and see for unilateral trading [7]. - In the long - term, due to the large number of new PE installations planned to be put into production in the fourth quarter, the supply is expected to increase further. Without new demand - boosting policies, the supply - demand pressure of PE is difficult to resolve, and the weak pattern is expected to continue [8]. 3. Summary by Relevant Catalogs 3.1 Core Contradictions and Strategy Recommendations 3.1.1 Core Contradictions - Supply - demand aspect: The PE supply - demand pattern has not changed much. In October, the device maintenance volume decreased compared to September, and supply returned to a high level. Overseas PE supply - demand is weak, and import is expected to increase from October to November, intensifying supply pressure. Although it is the traditional peak season, demand recovery is slow, downstream orders are insufficient, and enterprises' willingness to replenish inventory is low. PE inventory, especially LLDPE inventory, is at a high level, and the upstream and mid - stream face great shipment pressure [2]. - Macro aspect: The continuous shutdown of the US government and market concerns about credit risks have increased risk - aversion sentiment in the financial market, putting downward pressure on crude oil. Sino - US trade policies are still uncertain, and if trade frictions escalate, it may lead to further price drops in crude oil and chemical products. The 20th Fourth Plenary Session next week is worth attention, and new stimulus policies may boost market sentiment [2]. 3.1.2 Trading Strategy Recommendations - Near - term trading logic: The market should focus on Sino - US trade frictions and new stimulus policies during the 20th Fourth Plenary Session. It is recommended to wait and see for unilateral trading [7]. - Long - term trading expectation: The supply - demand pressure of PE is difficult to resolve, and the weak pattern is expected to continue [8]. 3.1.3 Industrial Customer Operation Recommendations - Price range forecast for polyethylene: 6800 - 7200, with a current volatility of 8.43% and a historical percentile of 5.8% (3 - year) [13]. - Hedging strategy for inventory management: For enterprises with high finished - product inventory, they can short plastic futures to lock in profits and sell call options to reduce costs [13]. - Hedging strategy for procurement management: For enterprises with low procurement inventory, they can buy plastic futures to lock in procurement costs and sell put options to reduce costs [13]. 3.2 This Week's Important Information and Next Week's Attention Events 3.2.1 This Week's Important Information - Bullish information: The market's concern about the US imposing a 100% tariff on China was alleviated by Trump's signal. A 500,000 - ton LLDPE full - density device of Yulong stopped for 5 days due to a fault [15]. - Bearish information: The risk - aversion sentiment in the financial market led to a continuous decline in crude oil prices [16]. 3.2.2 Next Week's Important Events to Follow - The decline of the plastic market slowed down on Wednesday and Thursday, and the downstream's willingness to buy at the bottom increased, leading to a rapid increase in trading volume [17]. 3.3 Disk Interpretation 3.3.1 Price, Volume, and Fund Interpretation - Unilateral trend and fund movement: In the context of the continuous decline of crude oil, PE prices followed the downward trend. This week, the position increased slightly, and the market's bearish sentiment was strong [22]. - Basis structure: During the decline this week, the spot price weakened following the disk, and the basis strengthened passively [24]. - Spread structure: The spread structure has not changed much recently, and the L1 - 5 spread shows a contango structure [26]. 3.4 Valuation and Profit Analysis - As PE prices continued to be weak, the production profits of all production lines were compressed. The coal - based production line with the best profit is on the verge of losses. PE devices are not sensitive to profit, so short - term losses do not usually cause unexpected shutdowns, resulting in a lack of strong cost support during the price decline [28]. 3.5 Supply - Demand and Inventory Deduction 3.5.1 Supply - Demand Balance Sheet Deduction - With the restart of devices and the commissioning of new production capacity, supply pressure will gradually emerge. After October, imports are expected to increase, further increasing the total PE supply. Although it is the traditional peak season for PE downstream, demand growth is expected to be lower than supply. In October, inventory is expected to change from destocking to stocking rapidly, and the supply - strong and demand - weak pattern will suppress PE prices [34]. 3.5.2 Supply - Side and Deduction - The current PE operating rate is 81.76% (- 2.19%). This week, the device maintenance volume increased slightly. ExxonMobil's 500,000 - ton LDPE device is in the trial - run stage. Overall, the return of maintenance devices and the commissioning of new production capacity in the fourth quarter will lead to continuous high supply pressure [38]. 3.5.3 Import - Export and Deduction - Import: The overseas PE supply - demand pattern is loose, and the price difference between the US and China has dropped to a historical low. It is expected that PE imports will increase from late October to November [41]. - Export: Enterprises' enthusiasm for expanding export channels is high this year, and PE exports have increased even in the off - season, but the overall volume is still small and has little impact on the PE supply - demand pattern [41]. 3.5.4 Demand - Side and Deduction - The average operating rate of PE downstream industries is 42.17% (+ 0.56%). The agricultural film operating rate increased significantly, but the growth is slower than in previous years. Other downstream demand is flat, so the demand - side support for PE is limited [44].

Report Industry Investment Rating No relevant content provided. Core Views - The global plastic additives market is on an upward trajectory, with an expected compound annual growth rate of 3.2% in consumption from 2024 to 2029, driven by growth in plastic - consuming end - use sectors and influenced by changing policies [2] - The domestic PE and PP markets show different trends in capacity utilization, and shipping freight indices have an impact on polyolefin investment [2] - Events such as the US federal government shutdown and changes in import volumes affect the polyolefin market [5] - Policies like the "Petrochemical and Chemical Industry Steady Growth Work Plan (2025 - 2026)" and oil price fluctuations influence the market [8][9] Summary by Related Catalogs Market Situation - **L Plastic**: L2601 contract prices and regional LLDPE prices fluctuate. For example, on 25 - 10 - 10, L2601 closed at 7153 points, down 28 points or 0.39%. Regional LLDPE prices in North, East, and South China showed weak adjustments [1] - **PP Polypropylene**: PP2601 contract prices and regional PP拉丝 prices also fluctuate. On 25 - 10 - 10, PP2601 closed at 6852 points, down 51 points or 0.74%. Domestic PP market prices declined [1] Important Information - The global plastic additives market is growing, and the consumption of plastic additives is expected to increase at a CAGR of 3.2% from 2024 to 2029 [2] - The US federal government shutdown in October 2025 caused economic losses, with an estimated weekly loss of about $15 billion [5] - Seven departments issued the "Petrochemical and Chemical Industry Steady Growth Work Plan (2025 - 2026)", aiming for an average annual increase of over 5% in industry added - value [8] Logical Analysis - Domestic PE capacity utilization has increased for 4 consecutive weeks, reaching 83.9%, a year - on - year increase of 4.2%. Domestic PP capacity utilization has increased for 3 consecutive weeks, reaching 77.7%, a year - on - year decrease of 0.1% [2] - In August 2025, the net import of polyethylene decreased to 83.4 million tons, and that of polypropylene was - 2.9 million tons, with a difference of 86.3 million tons, which is favorable for the L - PP spread [5] - In September 2025, Brent crude oil rose to $67.6 per barrel, a year - on - year decrease of 7.5%, which is negative for L [9] Trading Strategies - **Unilateral**: Different strategies are recommended for L and PP contracts on different dates. For example, on 25 - 10 - 10, the L 01 contract should be watched, and the PP 01 contract should be lightly short - tried [2] - **Arbitrage (Long - Short)**: Hold the L2601 - PP2601 spread and set stop - losses at appropriate levels. For example, on 25 - 10 - 10, the spread was +313 points [2][3] - **Options**: Generally, the option strategy is to watch [2][3][6]

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The current supply and demand pattern of PE is weak. Supply is expected to increase due to the restart of multiple devices and potential import growth, while demand recovery is slow, resulting in limited support for PE prices. The overall trend is expected to be weak, with limited upside potential [1]. - In the short term, PE will mainly fluctuate with macro - sentiment and cost, but its weak fundamentals will restrict its upward movement. A put - option strategy is recommended as the current valuation is low, and further short - selling is not cost - effective [6]. - In the long term, the supply of PE is expected to further increase in the fourth quarter due to new device投产 plans, and without new demand - boosting policies, the weak supply - demand situation is likely to continue [8]. Summary by Relevant Catalogs Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - Supply side: Multiple devices are set to restart at the end of September, and the planned device maintenance in October is expected to decline rapidly, leading to increased supply. Additionally, due to the weak overseas PE market, the number of offers from North America and the Middle East has increased, and imports are expected to rise in October - November [1]. - Demand side: Although PE is entering the peak season, demand recovery is slow, downstream orders are limited, and enterprises are reluctant to replenish inventory. PE inventory, especially LLDPE inventory, is at a high level, and there is pressure on mid - and upstream sales. As a result, the PE basis remains at a discount [1]. 1.2 Transaction - type Strategy Recommendations - L - P spread narrowing strategy is under observation, proposed on September 19 [12]. 1.3 Industry Customer Operation Recommendations - Price range prediction for polyethylene: 7100 - 7350, with a current 20 - day rolling volatility of 6.18% and a 3 - year historical percentile of 1.0% [13]. - Inventory management: For enterprises with high finished - product inventory worried about price drops, they can short plastic futures (L2601) with a 25% hedging ratio at an entry range of 7250 - 7300, and sell call options (L2601C7300) with a 50% ratio at a range of 40 - 70 to reduce costs [13]. - Procurement management: For enterprises with low procurement inventory, they can buy plastic futures (L2601) with a 50% hedging ratio at an entry range of 7050 - 7100 and sell put options (L2601P7000) with a 75% ratio at a range of 30 - 60 to lock in procurement costs and reduce expenses [13]. Chapter 2: This Week's Important Information and Next Week's Events to Watch 2.1 This Week's Important Information - Bullish information: On Wednesday, affected by the Russia - Ukraine geopolitical situation, oil prices rebounded from the bottom, and polyolefins followed the upward trend [15]. 2.2 Next Week's Events to Watch - Monitor the release and implementation of "anti - involution" related policies after the Ministry of Industry and Information Technology and other 7 departments issued the "Work Plan for Steady Growth of the Petrochemical and Chemical Industry (2025 - 2026)" on Friday afternoon [17]. - The release of China's September manufacturing PMI index on September 30 [17]. Chapter 3: Disk Interpretation 3.1 Price - Volume and Capital Interpretation - **Internal market**: - Unilateral trend: This week, the PE disk first declined and then rose. On Wednesday, affected by the Russia - Ukraine geopolitical conflict, oil prices rebounded from the bottom, and polyolefins followed the upward trend, maintaining a volatile and strengthening state in the second half of the week [24]. - Capital movement: This week, the open interest increased compared with last week. The top five long - position holders increased their long positions, and the top five short - position holders increased their short positions. The net long positions of the top five profitable seats slightly decreased, and the main profitable seats changed from net short to net long this week [24]. - Basis structure: Although PE is entering the peak season, the slow recovery of downstream demand and insufficient order follow - up have led to weak spot prices, and the basis remains at a discount. As of Friday, the basis in North China was - 80 yuan/ton, in East China was - 40 yuan/ton, and in South China was + 100 yuan/ton [26]. - Month - spread structure: Due to the generally optimistic market expectations for the subsequent macro - situation, the L1 - 5 month - spread shows a contango structure. Driven by crude oil this week, the L2601 contract strengthened, and the 1 - 5 spread narrowed [30]. Chapter 4: Valuation and Profit Analysis 4.1 Industry Chain Upstream and Downstream Profit Tracking - With the continuous decline of PE prices, the production profits of various production lines have been compressed recently. Currently, only the coal - based production line maintains positive profits, while other lines are in a loss state. However, PE devices are not very sensitive to profit conditions, and short - term losses usually do not cause unexpected shutdowns [35]. Chapter 5: Supply - Demand and Inventory Deduction 5.1 Supply - Demand Balance Sheet Deduction - According to the current balance sheet, as device maintenance decreases, supply pressure will gradually emerge. With the expected increase in PE imports in October, total supply may rise rapidly, and inventory is expected to change from destocking to stockpiling. Attention should be paid to the actual rhythm of imports and the increase in demand [40]. 5.2 Supply - side and Deduction - The current PE operating rate is 81.84% (+ 1.48%). Multiple devices are set to restart at the end of the month, and the operating rate is expected to rise. From the maintenance plan, device maintenance in October is expected to decrease, and supply will increase rapidly. ExxonMobil's new device is expected to start production at the beginning of October [44]. 5.3 Import - Export and Deduction - Import: This week, the overseas PE price further declined, and offers from North America and the Middle East increased. Due to the weak overseas market, PE products are flowing into China at low prices. Considering shipping time, PE imports are expected to increase from late October to November [49]. - Export: Enterprises have high enthusiasm for expanding export channels this year, and PE exports have increased even in the off - season. However, the overall volume is still small and has little impact on the PE supply - demand pattern [49]. 5.4 Demand - side and Deduction - The current average downstream operating rate of PE is 42.17% (+ 1.21%). The operating rates of major downstream industries have all increased, with the agricultural film industry having a relatively large increase. PE downstream is still in the transition to the peak season, and demand is expected to increase month - on - month. However, since the peak season started late this year, the demand recovery is slow, providing limited support for PE [52].

Core Viewpoint - The establishment of the joint venture company, Fujian Zhong-A Refining and Chemical Co., Ltd., marks a significant investment in the refining and chemical sector, with a total investment of 711 billion RMB, focusing on the integrated refining and chemical project in Fujian [3][4]. Group 1: Joint Venture Details - The joint venture was officially registered on September 4, with a registered capital of 28.8 billion RMB, where Fujian Refining and Chemical Co., Ltd. holds 50%, Sinopec holds 25%, and Saudi Aramco's subsidiary holds 25% [3]. - This project is the largest single investment in refining by Sinopec and the largest industrial project in Fujian province to date, representing a new model of energy cooperation between China and Saudi Arabia [3]. Group 2: Project Investment and Construction - The total investment for the project is 711 billion RMB, with plans for full production by 2030, including the construction of over 30 refining and chemical units [4]. - Key refining capacities include: 16 million tons/year of atmospheric distillation, 3.8 million tons/year of light hydrocarbon recovery, and various hydrogenation and cracking units [4]. - Chemical production will include: 1.5 million tons/year of steam cracking, 600,000 tons/year of hydrogenation of cracked gasoline, and multiple other chemical units [4]. Group 3: Saudi Aramco's Strategic Moves - Saudi Aramco's downstream president stated that this project signifies a new step in their investment in China, with plans to supply over 1 million barrels of crude oil daily to China, enhancing the "oil-to-chemicals" transition [5]. - Saudi Aramco has been actively increasing its market presence in China, with significant investments and partnerships, including a recent agreement with Rongsheng Petrochemical [5]. - The company aims to participate in various large-scale refining and chemical projects in China, indicating a strategic focus on the Chinese market [6][7].

1. Report Industry Investment Ratings - No specific industry - wide investment ratings are provided in the report 2. Core Views of the Report - The report offers short - term and medium - term trend analyses for various energy and chemical futures, including PX, PTA, MEG, etc. It also takes into account factors such as supply - demand balance, device operations, and market sentiment [2][9][10] 3. Summaries Based on Relevant Catalogs PX, PTA, MEG - **PX**: Supply - demand is in tight balance, trend is strong, and positive spreads are recommended. The restart of some PX devices is postponed, and with the commissioning of new PTA devices, short - term supply is tight. Polyester demand is gradually recovering [2][6][9] - **PTA**: Unilateral price is strong, recommend buying on dips, and focus on positive spreads. This week, PTA device operations decreased, and it is in a de - stocking pattern. Demand is seasonally improving [2][10] - **MEG**: Short - term trend is strong, recommend 9 - 1 positive spreads, but there is significant pressure above 4600. Port inventory is decreasing, but there is supply pressure in the 01 contract [2][10] Rubber and Synthetic Rubber - **Rubber**: It is in a volatile state. The inventory in Qingdao has decreased, and the market is affected by factors such as futures prices and substitute prices [2][11][14] - **Synthetic Rubber**: Short - term is strong, but medium - term is in a range - bound state. Driven by macro - sentiment and natural rubber trends, but the fundamentals lack obvious drivers [2][16][17] Asphalt - The cracking spread continues to weaken. September's production is expected to increase, and the inventory of some regions has changed. It follows the oil price to fluctuate within a range [2][18][32] LLDPE and PP - **LLDPE**: Short - term is strongly volatile. Cost rebounds, demand improves, and inventory is low. However, there may be a short - term supply pressure relief in September [2][35][36] - **PP**: Short - term rebounds, medium - term is in a range - bound state. Short - term demand improves, but the long - term supply pressure increases as new capacity is put into operation [2][39][40] Caustic Soda - Short - term correction, pay attention to the pressure of near - month warehouse receipts. The demand is expanding, especially in the alumina industry. The export also provides support, but the supply side is restricted by the weakness of PVC [2][44][46] Pulp - It is in a volatile state. The market shows a pattern of strong broad - leaf pulp and stable softwood pulp. The core contradiction lies in the game between high international quotes and weak domestic reality [2][50][53] Glass - The price of the original sheet is stable. The market price fluctuates, with rigid demand replenishment increasing slightly, but the high - inventory contradiction still exists [2][55][56] Methanol - Short - term is volatile with support. Macro - sentiment drives it to rise, but the port inventory pressure is large, and the medium - term may correct under the high - premium pattern [2][58][60] Urea - It is in a weak state. The inventory of enterprises has increased, and the market is in a process of weakening speculation. Although macro - factors provide some support, the long - term fundamentals are still weak [2][62][65] Styrene - Short - term is strong, medium - term is bearish. As the downstream enters the seasonal bottom - fishing stage, the short - term inventory is decreasing, but the long - term demand for replenishment is insufficient [2][66][67] Soda Ash - The spot market has little change. The market is weakly volatile, with device operations fluctuating slightly and downstream demand being cautious [2][68][70] LPG and Propylene - **LPG**: Import cost provides support, but supply - demand lacks obvious improvement. CP prices have increased, and there are many device maintenance plans [2][72][76] - **Propylene**: Supply - demand is in tight balance, and the price is strongly sorted. There is a certain relationship with the spread of related contracts [2][72] PVC - The trend is under pressure. Although short - term volatility is affected by anti - involution sentiment, the supply side has high operations, demand is weak, and inventory is accumulating [2][79][80] Fuel Oil and Low - Sulfur Fuel Oil - **Fuel Oil**: It is in a high - level volatile state at night, and the short - term strength continues. Futures prices and spot prices have increased [2][82] - **Low - Sulfur Fuel Oil**: Near - month contracts continue to rise, and the high - low sulfur spread in the overseas spot market has temporarily stabilized [2][82] Container Freight Index (European Line) - It may continue to be weakly volatile. Freight rates have declined, and factors such as futures prices, freight rate indices, and carrier prices need to be considered [2][84]

Core Insights - The overall operating rate of China's polyethylene (PE) industry in August 2025 is estimated at 80.44%, showing an increase from July [3][5] - The operating rates for different PE categories are as follows: LDPE increased by 1.98 percentage points to 68.77%, LLDPE slightly increased by 0.04 percentage points to 81.16%, and HDPE saw a significant rise of 8.65 percentage points to 82.65% [5][6] LDPE Analysis - LDPE production experienced a slight increase, with an estimated growth of 2.96% month-on-month [6] - The restart of Zhejiang Petrochemical's high-pressure unit after maintenance helped offset the production gap caused by planned maintenance at Shenhua Xinjiang [6] - Notable increases in LDPE varieties include a rise of 15,600 tons in film materials, while coating and injection materials saw declines of 13,000 tons and 4,200 tons, respectively [6] LLDPE Analysis - The LLDPE market in August displayed a trend of "stable total volume, structural changes" [6] - Overall production saw a minor increase of 0.04%, but significant internal adjustments occurred [6] - LLDPE film (MI=2, excluding opening agents) production increased by 56,800 tons, while other LLDPE varieties experienced reductions, including a decrease of 33,400 tons in LLDPE (MI=2, including opening agents) [6] HDPE Analysis - HDPE production surged by 11.68% month-on-month, marking the largest single-month increase of the year [7] - This growth was primarily driven by the restart of the dual lines at Lianyungang Petrochemical and the commissioning of a new facility at Jilin Petrochemical [7] - The supply of HDPE film saw a notable increase of approximately 103,700 tons, while other categories like HDPE pipe and various other products also experienced growth [7] Market Outlook - The supply pattern for PE in August is characterized by "HDPE increase, LDPE stability, and LLDPE flatness" [8] - It is anticipated that the HDPE supply will face pressure in a relaxed supply environment, while LDPE prices are expected to maintain a high level [8]