Core Viewpoint - The signing of three key sub-projects at the world's largest integrated alkane production base in Fuzhou marks a significant investment of 9 billion yuan, aimed at enhancing the downstream value chain of the alkane industry [2] Group 1: Project Details - The three sub-projects include: 1. A 500,000-ton woven bag project by Lihua Bo Plastics with a total investment of 2 billion yuan, establishing the shortest digestion path from propane to polypropylene to woven bags [2] 2. A 200,000-ton non-woven fabric project by Hengfan Holdings with a total investment of 1 billion yuan, focusing on high-growth areas such as medical protection and hygiene care [2] 3. A 750,000-ton BOPP project by Zhongjing Petrochemical with a total investment of 6 billion yuan, targeting packaging applications in industries like takeout and logistics [2] Group 2: Economic Impact - The completion of these projects is expected to drive the upstream operations of Zhongjing Petrochemical's propane dehydrogenation and polypropylene units to achieve high-load, long-cycle, and stable operations [2] - The projects will promote the transformation and upgrading of the industry chain towards high value-added fields, leveraging synergies from local layouts to effectively reduce logistics and operational costs [2] - This initiative aims to create a highly competitive polypropylene product manufacturing base both domestically and globally, contributing significantly to regional economic growth [2]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The supply - demand pattern of polyolefins has limited improvement, and the upward space for polyolefins is expected to be limited. Due to new plastic production capacity coming on - stream recently and the end of the agricultural film peak season, the L - PP spread is expected to narrow. [4] 3. Summary by Relevant Catalogs 3.1 Market Analysis - Plastic开工率 remains around 87% (neutral level), while PP开工率 drops to around 79% (neutral - low level). After the New Year's Day holiday as of the week of January 9, PE下游开工率 increased 0.06 percentage points to 41.21% (still at a relatively low level in the same period in recent years), and PP下游开工率 decreased 0.10 percentage points to 52.6% (at a relatively low level in the same period over the years). The inventory accumulation during the New Year's Day this year was not significant, and the petrochemical inventory is at a neutral level in the same period in recent years. The crude oil price rebounded slightly due to geopolitical factors. There are new production capacities for both PE and PP. With the end of the agricultural film peak season and reduced demand in the north, the downstream开工率 is expected to decline. Although the macro environment is positive, it has limited impact on the polyolefin supply - demand pattern. [4] 3.2 Plastic and PP开工率 - Plastic: The number of maintenance devices has changed little, and the开工率 remains around 87% (a neutral level). - PP: With the addition of maintenance devices such as the second line of Fujian United, the enterprise开工率 dropped 3 percentage points to around 79% (a relatively low level). [16] 3.3 Plastic and PP下游开工率 - PE demand: As of the week of January 9, after the New Year's Day holiday, the downstream开工率 increased 0.06 percentage points to 41.21%. The agricultural film is gradually exiting the peak season, with orders and raw material inventory decreasing, while packaging film orders increased slightly. The overall downstream开工率 is still at a relatively low level in the same period in recent years. - PP demand: As of the week of January 9, after the New Year's Day holiday, the downstream开工率 decreased 0.10 percentage points to 52.6%. Among them, the plastic weaving开工率 of the main downstream of drawing decreased 0.22 percentage points to 42.92%, and orders continued to decline slightly, slightly lower than the same period last year. [22] 3.4 Plastic Basis - The spot price has increased to catch up, and the basis of the 05 contract has risen to - 24 yuan/ton, still at a relatively low level. [26] 3.5 Plastic and PP Inventory - The petrochemical early inventory on Friday decreased 0.5 tons to 57 tons week - on - week, 1 ton higher than the same period last year. The inventory accumulation during the New Year's Day this year was not significant, and the petrochemical inventory is at a neutral level in the same period in recent years. [30]

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - The demand continues to be weak, suppressing the rebound space. For PE, the supply is high, the demand is in the off - season, the inventory is accumulating, and the price is suppressed by the supply - demand contradiction. For PP, the short - term supply - demand fundamentals have limited variables, the demand is weak, and the short - term rebound drive is limited. The current cost and supply - demand contradictions are in a game, and the upward drive is insufficient, so the expected rebound height is limited [1][2][3][4] Group 3: Summary by Directory 1. Polyolefin Basis Structure - L主力合约收盘价为6461元/吨（+8），PP主力合约收盘价为6321元/吨（+47），LL华北现货为6280元/吨（-20），LL华东现货为6400元/吨（+0），PP华东现货为6150元/吨（+10），LL华北基差为-181元/吨（-28），LL华东基差为-61元/吨（-8），PP华东基差为-171元/吨（-37） [1] 2. Production Profit and Operating Rate - PE开工率为82.6%（-1.2%），PP开工率为76.9%（-2.5%）。PE油制生产利润为-24.2元/吨（-97.9），PP油制生产利润为-524.2元/吨（-97.9），PDH制PP生产利润为-793.1元/吨（+55.3） [1] 3. Polyolefin Non - Standard Price Difference - Not provided in the content 4. Polyolefin Import and Export Profits - LL进口利润为90.6元/吨（-0.3），PP进口利润为-380.2元/吨（-84.6），PP出口利润为-18.7美元/吨（+0.0） [1] 5. Polyolefin Downstream Operating Rate and Downstream Profits - PE下游农膜开工率为43.9%（-1.3%），PE下游包装膜开工率为48.2%（-0.7%），PP下游塑编开工率为43.7%（-0.3%），PP下游BOPP膜开工率为63.2%（+0.0%） [1] 6. Polyolefin Inventory - Not provided in the content Group 4: Strategies - Unilateral: Wait and see. Currently, there is a game between the cost side and the supply - demand contradiction. With insufficient upward drive, the expected rebound height may be limited. - Inter - period: None - Inter - variety: Short the spread of L05 - PP05 when it is high [4]

Industry Overview - The plastic flexible packaging industry in China utilizes resins such as PP, PE, and PVC to produce various films like BOPP and BOPET, widely used in food, pharmaceuticals, and clothing sectors [1][2] - Products are typically composed of a base layer, functional layer, and heat-seal layer, with varying performance requirements based on end-use applications [1] Current Industry Status - From 2020 to 2025, plastic film prices are expected to rise initially and then decline, with an overall downward trend by 2025; BOPA prices are the highest [2][20] - Profit margins have been shrinking over the past five years, with an anticipated overall negative margin in 2024 and 2025, particularly for BOPA [2][25] - The industry is concentrated in East, South, and North China, with Jiangsu, Zhejiang, and Guangdong as core production areas; new production lines in Central and Southwest China are filling gaps [2][31] Future Development Directions - The industry is expected to see six major trends: increased scale, accelerated integration of the supply chain, focus on differentiated development, elimination of less efficient production facilities, emphasis on park-based development, and active exploration of overseas markets [3] Market Forecast - Supply and demand will dominate the market in Q4 2025 and 2026, with macro policies and demand being significant influencing factors; international crude oil prices may decline, leading to seasonal fluctuations in plastic film prices [4]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The polyolefin market is currently facing a continuous imbalance between supply and demand, which suppresses prices. High production expectations were realized in Q3, with new production capacity gradually released. In November, the demand is expected to weaken, and the cost side also lacks support. Overall, the downward pressure on polyolefin prices is expected to continue, and the market may fluctuate in the bottom range, with weak support from potential phased restocking demand due to low absolute prices [7][75][76]. 3. Summary by Directory 3.1. Market Review and Operational Suggestions - **Quarterly Performance**: In Q1, different upstream production rhythms led to different supply pressures for plastics and PP. In Q2, the market declined due to tariff impacts and weak demand. In Q3, the market was driven by policies, with a temporary rebound followed by a decline. In October, new production capacity and weakening cost support led to significant price drops [12][13]. - **Spot Market**: In October, the PE market declined. The monthly average price of LLDPE was 7,225 yuan/ton, down 2.41% month - on - month and 15.40% year - on - year. The monthly average price of LDPE was 9,325 yuan/ton, down 2.73% month - on - month and 14.31% year - on - year. In the PP market, the monthly average price of East China PP raffia was 6,585 yuan/ton, down 3.37% month - on - month and 13.25% year - on - year [14]. 3.2. Fundamental Analysis 3.2.1. Production and Capacity - **PP Production**: In September 2025, China's PP total production was 3.2754 million tons, down 6.20% month - on - month and up 9.84% year - on - year. The loss due to maintenance was still high, but the overall production level increased. In November, some maintenance devices will restart, and the loss due to maintenance is expected to decrease [15]. - **PE Production**: In October 2025, PE production was expected to be 2.7806 million tons, up 10.48% month - on - month. The start - up load rate increased. In November, the maintenance loss is expected to be about 470,000 tons [16]. - **New Capacity**: New capacity from Guangxi Petrochemical, ExxonMobil Huizhou, and BASF Zhanjiang will gradually be released [29]. 3.2.2. Import and Export - **PE**: In September 2025, PE imports were 1.022 million tons, up 7.58% month - on - month and down 10.04% year - on - year. Exports were 99,000 tons, down 14.5% month - on - month and up 63.55% year - on - year [31]. - **PP**: In September 2025, PP imports were 290,100 tons, up 17.46% month - on - month and down 2.96% year - on - year. Exports were 237,600 tons, up 21.98% year - on - year [31]. 3.2.3. Inventory - After the National Day holiday, the inventory of Sinopec and PetroChina decreased. As of the end of October, the inventory level was 675,000 tons, down 85,000 tons year - on - year. The inventory of PP commercial enterprises was 595,100 tons, and the social sample inventory of PE was 527,400 tons, up 2,900 tons month - on - month [33]. 3.2.4. Cost and Profit Analysis - **Coal**: In October, the coal market was stable to weak. The average profit of coal - based PE was 197.05 yuan/ton, down 431.21 yuan/ton from the previous month. The average profit of coal - based PP was - 258.13 yuan/ton, down 492 yuan/ton month - on - month [36]. - **Crude Oil**: OPEC+ continued to increase production, and the market was worried about oversupply. The average profit of naphtha - based PE was 46.68 yuan/ton, up 186.8 yuan/ton month - on - month. The average loss of oil - based PP was - 246.15 yuan/ton, an increase of 106.4 yuan/ton month - on - month [37]. - **Propane**: In October, the domestic propane price fluctuated downward and then stabilized. The average profit of PDH - based PP was - 808.19 yuan/ton, a decrease in losses of 384.27 yuan/ton compared to the previous month [38]. 3.2.5. Downstream Demand - **PE**: In October, the downstream start - up rate of PE increased in most cases. The demand for agricultural films and pipes showed different trends, and overall, the demand for raw materials had limited support [52]. - **PP**: In October, the start - up rate of most PP downstream industries remained high, but the new orders had limited continuity, and the support for prices was limited [53]. 3.2.6. White Goods Production - In November 2025, the total production schedule of air conditioners, refrigerators, and washing machines was 2.847 million units, down 17.7% year - on - year. The domestic production schedule growth slowed down significantly in Q4, and the export decline narrowed [66][67]. 3.3. Market Outlook The polyolefin market will continue to be pressured by weak cost support and a loose supply - demand situation. Although the low absolute price may stimulate phased restocking demand, the market is expected to remain in a bottom - range oscillation [75][76].

Core Viewpoint - The traditional peak season of "Golden September and Silver October" is approaching, but the performance of polypropylene (PP) is average due to limited demand improvement and increased supply pressure [1][2] Group 1: Demand and Supply Dynamics - Despite the arrival of the peak season, the characteristics of downstream demand are not evident, with the operating rates in the PP products industry showing only marginal improvement [1] - The operating rate for PP has rebounded to around 87%, the highest since May, following a significant drop to approximately 80% during the traditional demand off-season [1] - The overall social inventory of PP is around 800,000 tons, remaining at historically high levels despite a recent decline [2] Group 2: Profitability and Market Conditions - The profitability of oil-based PP has improved this year, with losses reduced to within 500 yuan/ton, while coal-based PP profits remain robust at around 800 yuan/ton despite recent coal price rebounds [2] - The increase in PP supply was anticipated, but the demand improvement has not met expectations, exacerbating the supply-demand imbalance [2] - The current profit margins for oil-based and coal-based PP are at their highest levels in nearly three years, indicating a lack of effective support from the cost side [2]

Investment Rating - The report assigns a cautious outlook for the polyolefin and styrene industry, suggesting a "watch and wait" strategy for investors [13]. Core Insights - The polyolefin market is experiencing slight price declines due to weak demand and supply adjustments, with LLDPE and PP prices at 7790 CNY/ton and 7291 CNY/ton respectively, reflecting weekly declines of 1.30% and 0.37% [1][2]. - The styrene market shows a mixed trend, with prices recovering slightly after a weak start, closing at 8123 CNY/ton, marking a weekly increase of 0.17% [4][5]. - Overall, the report indicates that while there are signs of demand recovery, supply pressures and cost factors are likely to keep prices under pressure in the short term [3][6]. Summary by Sections Strategy Recommendations - LLDPE: Anticipated short-term weak fluctuations with support at 7500-7550 CNY/ton and resistance at 7900-7950 CNY/ton [13]. - PP: Expected to remain weak with support at 7150-7200 CNY/ton and resistance at 7450-7500 CNY/ton [13]. - Styrene: Predicted to experience low-level fluctuations with support at 7750-7800 CNY/ton and resistance at 8500-8550 CNY/ton [13]. Futures Market Situation - LLDPE futures closed at 7790 CNY/ton with a trading volume of 1,767,398 contracts and an increase in open interest by 12,358 contracts [14]. - PP futures closed at 7291 CNY/ton with a trading volume of 1,384,915 contracts and an increase in open interest by 4,613 contracts [15]. - Styrene futures closed at 8123 CNY/ton with a trading volume of 1,194,964 contracts and a decrease in open interest by 46,650 contracts [15]. Spot Market Situation - The spot price for LLDPE ranged between 8020-8500 CNY/ton, while PP prices varied from 7170-7430 CNY/ton depending on the region [2]. - Styrene spot prices were reported at 8175 CNY/ton in East China and 8375 CNY/ton in South China [5]. Supply and Demand Fundamentals - Polyethylene production rates decreased slightly to 81.63%, while polypropylene rates increased to 83.48% [2]. - Styrene production rates were reported at 74.68%, with expectations of further supply tightening due to upcoming maintenance [6]. Inventory Levels - As of March 14, total oil inventory was 805,000 tons, with polyethylene trade inventory at 175,940 tons and polypropylene social trade inventory at 46,510 tons [3][6].

Investment Rating - The report provides a cautious outlook on the polyolefin and styrene industry, suggesting a "hold" or "wait-and-see" approach for investors [15]. Core Insights - The overall market for polyolefins has shown limited volatility, with slight increases in polyethylene prices and minor declines in polypropylene prices. The LLDPE contract closed at 7884 CNY/ton, up 0.92%, while the PP contract closed at 7378 CNY/ton, down 0.24% [1][5]. - The report highlights a recovery in downstream demand, although raw material inventories at factories remain high, leading to cautious purchasing behavior [2][3]. - Supply pressures persist due to new polyethylene facilities coming online, while polypropylene production is slightly adjusted due to maintenance [2][3]. - The styrene market is experiencing a slight upward trend, with the EB04 contract closing at 8597 CNY/ton, up 0.40% [5][7]. Summary by Sections 1. Strategy Recommendations - LLDPE: Anticipated short-term fluctuations with support at 7600-7650 CNY/ton and resistance at 7900-7950 CNY/ton [15]. - PP: Expected to follow cost fluctuations with support at 7150-7200 CNY/ton and resistance at 7550-7600 CNY/ton [15]. - Styrene: Marginal improvement in supply-demand balance, with support at 8200-8250 CNY/ton and resistance at 9100-9150 CNY/ton [15]. 2. Futures Market Situation - LLDPE futures showed a closing price of 7884 CNY/ton with a weekly increase of 0.92% [16]. - PP futures closed at 7378 CNY/ton, reflecting a slight decrease of 0.24% [16]. - Styrene futures closed at 8597 CNY/ton, with a weekly increase of 0.40% [17]. 3. Spot Market Situation - The domestic LLDPE market prices ranged from 8070 to 8700 CNY/ton, while PP prices varied between 7280 and 7530 CNY/ton [2]. - Styrene prices in the East China market were reported at 8635 CNY/ton, and in South China at 8800 CNY/ton [7]. 4. Supply and Demand Fundamentals - PE operating rates were reported at 82.76%, down 0.88%, while PP operating rates were at 77.23%, down 1.78% [2]. - Downstream demand is recovering, with various sectors showing increased operating rates, such as agricultural film at 40% and packaging at 48% [2]. - Inventory levels for two oils decreased to 86,000 tons, with PE social trade inventory at 19,126 tons and PP at 5,115 tons [3]. 5. Futures Market Positioning - The report indicates a mixed positioning in the futures market, with significant changes in open interest for various contracts [16][17].