Report Industry Investment Rating - Not provided Core Viewpoints - The domestic supply - demand pattern of plastics has improved, and there are still expectations for the chemical industry to counter - involution. The Middle East situation boosts the energy - chemical industry. It is expected that plastic prices will fluctuate strongly. Attention should be paid to the resumption progress of downstream industries after the festival and the development of the Middle East situation [1] Summary by Relevant Catalogs Market Analysis - On March 27, new parking devices such as Qilu Petrochemical's HDPE Line 1 were added, and the plastic operating rate dropped to around 80%, which is at a relatively low level. The downstream operating rate of PE increased by 2.16 percentage points to 39.75% week - on - week. After the Spring Festival, the petrochemical inventory has been reduced and is currently at a neutral level in the same period in recent years. Although the US has sent negotiation signals, the Middle East conflict still exists, and the risk of crude oil supply interruption has not been lifted, leading to a rebound in crude oil prices. New production capacities of 500,000 tons/year of BASF (Guangdong) FDPE and 300,000 tons/year of Yulong Petrochemical LDPE/EVA were put into operation in January 2026, and there are no plans to put new production capacities into operation in the first quarter. The downstream factories have increased their resumption of work after the Lantern Festival, and the rigid demand has been released intensively, causing the prices of agricultural films in North, East, and South China to continue to rise. However, downstream users are resistant to high prices and their procurement is more cautious, with low enthusiasm for spot transactions. The expectation of reduced plastic supply still exists due to the non - resumption of navigation in the Strait of Hormuz [1] Futures and Spot Market Conditions - Futures: The plastic 2605 contract opened higher and then increased positions and fluctuated. The lowest price was 8,716 yuan/ton, the highest was 8,956 yuan/ton, and it finally closed at 8,868 yuan/ton, above the 60 - day moving average, with a gain of 1.71%. The position increased by 4,709 lots to 326,742 lots [2] - Spot: The PE spot market showed a mixed trend, with price changes ranging from - 200 to + 200 yuan/ton. LLDPE was reported at 8,580 - 9,470 yuan/ton, LDPE at 10,300 - 11,610 yuan/ton, and HDPE at 8,600 - 9,940 yuan/ton [3] Fundamental Tracking - Supply: On March 27, new parking devices such as Qilu Petrochemical's HDPE Line 1 were added, and the plastic operating rate dropped to around 80%, at a relatively low level [4] - Demand: As of the week of March 27, the downstream operating rate of PE increased by 2.16 percentage points to 39.75% week - on - week. After the fifth week of the Spring Festival, downstream industries resumed production one after another but have not returned to the normal level before the festival. The overall downstream operating rate of PE shows seasonal changes [4] - Inventory: The petrochemical early inventory on Friday decreased by 35,000 tons week - on - week to 770,000 tons, 25,000 tons lower than the same period in the lunar calendar last year. Currently, the petrochemical inventory is at a neutral level in the same period in recent years [4] - Raw materials: The Brent crude oil 05 contract rose to $108/barrel. The ethylene prices in Northeast Asia and Southeast Asia remained flat week - on - week at $1,400/ton [4]

Report Industry Investment Rating - No relevant information provided Core Viewpoints - The domestic supply - demand pattern of plastics has improved, and there are still expectations for the chemical industry to fight against involution. The situation in the Middle East boosts the energy - chemical industry. The plastics price is expected to fluctuate strongly in the near future. Attention should be paid to the progress of downstream resumption of production after the festival and the development of the Middle East situation [1] Summary by Directory 1.行情分析 - On March 20, new parking devices such as Zhongsha Petrochemical HDPE and Zhongying Petrochemical HDPE were added, and the plastic operating rate dropped to about 85%, which is at a neutral level [1][4] - As of the week of March 20, the downstream operating rate of PE increased by 3.76 percentage points to 37.59% month - on - month. After the Spring Festival holiday, downstream factories gradually resumed production but did not return to the pre - holiday level, showing a seasonal change [1][4] - After the Spring Festival, petrochemical inventories have been reduced, and currently petrochemical inventories are at a neutral level in the same period in recent years [1][4] - Due to the situation in the Middle East, the crude oil price dropped from a high level. The new production capacities of BASF (Guangdong) FDPE (500,000 tons/year) and Yulong Petrochemical LDPE/EVA (300,000 tons/year) were put into production in January 2026, and there are no plans to put new production capacities into operation in the first quarter [1] - After the Lantern Festival, downstream factories resumed work, and the rigid demand was released intensively. The prices of agricultural films in North, East and South China continued to rise. However, downstream customers showed resistance to high prices and procurement became more cautious, with weak spot transactions [1] 2.期现行情 Futures - The plastic 2605 contract opened lower, reduced positions and fluctuated. The lowest price was 8,542 yuan/ton, the highest price was 8,954 yuan/ton, and it finally closed at 8,818 yuan/ton, above the 60 - day moving average, with a decline of 0.94%. The trading volume decreased by 20,434 lots to 336,310 lots [2] Spot - Most of the PE spot market declined, with the price change ranging from - 300 to + 0 yuan/ton. LLDPE was reported at 8,330 - 8,970 yuan/ton, LDPE at 10,230 - 11,310 yuan/ton, and HDPE at 8,490 - 9,640 yuan/ton [3] 3.基本面跟踪 - Supply: On March 20, new parking devices such as Zhongsha Petrochemical HDPE and Zhongying Petrochemical HDPE were added, and the plastic operating rate dropped to about 85%, at a neutral level [4] - Demand: As of the week of March 20, the downstream operating rate of PE increased by 3.76 percentage points to 37.59% month - on - month. After the Spring Festival holiday, downstream factories gradually resumed production but did not return to the pre - holiday level, showing a seasonal change [4] - Petrochemical inventory: On Friday, the early petrochemical inventory decreased by 30,000 tons to 810,000 tons week - on - week, 10,000 tons higher than the same period in the lunar calendar last year, at a neutral level in the same period in recent years [4] - Raw material: The Brent crude oil 05 contract dropped to $108/barrel. The price of Northeast Asian ethylene increased by $70/ton to $1,350/ton month - on - month, and the price of Southeast Asian ethylene also increased by $70/ton to $1,350/ton month - on - month [4]

Report Industry Investment Rating - Not provided Core Viewpoints - On March 19, 2026, the plastic opening rate dropped to around 87% due to new parking devices, and the domestic supply - demand pattern of plastics improved. However, downstream showed resistance to high prices, and spot transactions were weak. With the high - spirited collective sentiment of chemical products, if the Strait of Hormuz cannot resume navigation, refinery production cuts will increase further. The recent plastic prices are expected to fluctuate strongly. It's necessary to pay attention to the progress of downstream resumption after the festival and the situation in the Middle East [1] Summary by Relevant Catalogs Market Analysis - On March 19, the plastic opening rate dropped to around 87% due to new parking devices like Shanghai Petrochemical's LDPE 2 line. As of the week of March 13, the PE downstream opening rate rose 5.21 percentage points to 33.83% week - on - week. After the Spring Festival, petrochemical inventories decreased, and are currently at a neutral level in the same period in recent years. The attack on Iranian oil and gas facilities caused a sharp rise in crude oil prices. New production capacities of Basf (Guangdong) FDPE and Yulong Petrochemical LDPE/EVA were put into production in January 2026, and there are no new production capacity plans in the first quarter. After the Lantern Festival, downstream factories resumed work, and the prices of agricultural films in North, East and South China continued to rise. Although the domestic supply - demand pattern of plastics improved, downstream showed resistance to high prices, and spot transactions were weak. If the Strait of Hormuz cannot resume navigation, refinery production cuts will increase further, and plastic prices are expected to fluctuate strongly [1] Futures and Spot Market - **Futures**: The plastic 2605 contract opened higher, increased positions and fluctuated upward. The lowest price was 8700 yuan/ton, the highest was 9147 yuan/ton, and it finally closed at 8916 yuan/ton, above the 60 - day moving average, with a gain of 4.49%. The position increased by 12,786 lots to 356,744 lots [2] - **Spot**: Most PE spot markets rose, with price changes ranging from - 100 to + 300 yuan/ton. LLDPE was reported at 8530 - 9170 yuan/ton, LDPE at 10230 - 11260 yuan/ton, and HDPE at 8490 - 9740 yuan/ton [3] Fundamental Tracking - **Supply**: On March 19, new parking devices such as Shanghai Petrochemical's LDPE 2 line led to a drop in the plastic opening rate to around 87%, which is at a neutral level [1][4] - **Demand**: As of the week of March 13, the PE downstream opening rate rose 5.21 percentage points to 33.83% week - on - week. After the Spring Festival, downstream factories resumed work gradually but have not returned to the pre - holiday level, showing seasonal changes [1][4] - **Inventory**: On Thursday, the early petrochemical inventory decreased by 10,000 tons to 840,000 tons week - on - week, 20,000 tons higher than the same period last lunar year, currently at a neutral level in the same period in recent years [4] - **Raw Materials**: The Brent crude oil 05 contract rose above $113 per barrel. The Northeast Asian ethylene price rose $30 per ton to $1280 per ton week - on - week, and the Southeast Asian ethylene price also rose $30 per ton to $1280 per ton week - on - week [4]

Report Industry Investment Rating - Not provided Core Viewpoints of the Report - The domestic supply - demand pattern of plastics has improved, and there are still expectations for the chemical industry to counter the involution. The situation in the Middle East boosts the energy - chemical industry. If the Strait of Hormuz cannot resume navigation, the refinery load reduction will further increase, and the plastic price is likely to rise rather than fall in the near future. Pay attention to the progress of downstream resumption after the festival and the situation in the Middle East [1] Summary by Relevant Catalogs Market Analysis - On March 17, the change of parking devices was small, and the plastic operating rate remained at around 87.5%, at a neutral level. As of the week of March 13, the downstream operating rate of PE increased by 5.21 percentage points to 33.83% week - on - week. After the Spring Festival, the petrochemical inventory continued to be destocked and is currently at a neutral level in the same period in recent years. The cost of crude oil rebounded. The new production capacities of BASF (Guangdong) FDPE and Yulong Petrochemical LDPE/EVA have been put into operation in January 2026, and no new production capacity is planned to be put into operation in the first quarter. After the Lantern Festival, the downstream factories resumed work, and the rigid demand was released intensively. The domestic supply - demand pattern of plastics has improved, but the downstream has a resistance to high prices, and the spot trading is weak [1] Futures and Spot Market Conditions - Futures: The plastic 2605 contract opened lower, reduced positions and fluctuated. The lowest price was 8340 yuan/ton, the highest price was 8616 yuan/ton, and it finally closed at 8496 yuan/ton, above the 60 - day moving average, with a decline of 1.58%. The position decreased by 11231 lots to 333716 lots [2] - Spot: The PE spot market showed mixed trends, with the increase or decrease ranging from - 200 to + 200 yuan/ton. LLDPE was reported at 8370 - 8970 yuan/ton, LDPE at 10550 - 11310 yuan/ton, and HDPE at 8370 - 9490 yuan/ton [3] Fundamental Tracking - Supply: On March 17, the plastic operating rate remained at around 87.5%, at a neutral level [1][4] - Demand: As of the week of March 13, the downstream operating rate of PE increased by 5.21 percentage points to 33.83% week - on - week. The downstream gradually resumed production but has not returned to the pre - festival level, showing a seasonal change [1][4] - Inventory: On Tuesday, the petrochemical early - morning inventory increased by 0.5 tons to 86.5 tons week - on - week, 2 tons higher than the same period of last lunar year, at a neutral level in the same period in recent years [4] - Raw materials: The Brent crude oil 05 contract rose above $103/barrel. The price of Northeast Asian ethylene increased by $50/ton to $1200/ton week - on - week, and the price of Southeast Asian ethylene also increased by $50/ton to $1200/ton week - on - week [4]

Report Industry Investment Rating - Not provided Core Viewpoints - The domestic supply - demand pattern of plastics has improved, and there are still expectations for the chemical industry to counter - involution. The Middle East situation boosts the energy - chemical industry. If the Strait of Hormuz cannot resume navigation, plastic prices are likely to rise in the near term. Attention should be paid to the progress of downstream resumption of production after the festival and the Middle East situation [1] Summary by Relevant Catalogs Market Analysis - On March 12, new shutdown devices such as Shanghai Petrochemical's full - density were added, and the plastic operating rate dropped to about 88%, currently at a neutral level. As of the week of March 6, the downstream operating rate of PE increased by 10.4 percentage points to 28.62% week - on - week. After the Spring Festival, downstream factories gradually resumed production but have not returned to pre - holiday levels. Petrochemical inventory increased by 480,000 tons to 940,000 tons during the Spring Festival and has been continuously decreasing. The cost of crude oil has rebounded significantly. New production capacities of 500,000 tons/year of BASF (Guangdong) FDPE and 300,000 tons/year of Yulong Petrochemical LDPE/EVA were put into operation in January 2026, and there are no plans for new production capacity in the first quarter. After the Lantern Festival, downstream factories resumed work, and the prices of agricultural films in North, East, and South China increased. However, downstream resistance to high prices led to weak spot transactions [1] Futures and Spot Market Conditions - Futures: The plastic 2605 contract opened higher, increased positions, and fluctuated. The lowest price was 8,190 yuan/ton, the highest was 8,617 yuan/ton, and it closed at 8,236 yuan/ton, up 4.17%. The position increased by 4,435 lots to 327,108 lots [2] - Spot: The PE spot market showed mixed trends, with price changes ranging from - 200 to + 200 yuan/ton. LLDPE was reported at 7,880 - 8,470 yuan/ton, LDPE at 9,980 - 11,010 yuan/ton, and HDPE at 8,040 - 8,800 yuan/ton [3] Fundamental Tracking - Supply: On March 12, new shutdown devices such as Shanghai Petrochemical's full - density were added, and the plastic operating rate dropped to about 88%, currently at a neutral level [4] - Demand: As of the week of March 6, the downstream operating rate of PE increased by 10.4 percentage points to 28.62% week - on - week. After the Spring Festival, downstream factories gradually resumed production but have not returned to pre - holiday levels [4] - Inventory: On Thursday, the early petrochemical inventory decreased by 40,000 tons to 800,000 tons, 20,000 tons higher than the same period last lunar year, currently at a neutral level in recent years [4] - Raw materials: The Brent crude oil 05 contract rose to $98/barrel. The price of Northeast Asian ethylene remained flat at $970/ton week - on - week, and the price of Southeast Asian ethylene remained flat at $940/ton week - on - week [4]

Report Industry Investment Rating - Not provided Core Viewpoints - The domestic supply - demand pattern of plastics has improved, and there is still an expectation of anti - involution in the chemical industry. The Middle East situation boosts the energy and chemical industry. If the Strait of Hormuz cannot resume navigation, the plastic price is likely to rise in the near future. Attention should be paid to the progress of downstream resumption of production after the Spring Festival and the Middle East situation [1] Summary by Directory Market Analysis - On March 11, the number of maintenance devices changed little, and the plastic operating rate remained at around 89%, which is at a neutral level. As of the week of March 6, the downstream operating rate of PE increased by 10.4 percentage points to 28.62% week - on - week. After the Spring Festival, downstream factories gradually resumed production but did not return to the pre - holiday level. The petrochemical inventory increased by 480,000 tons to 940,000 tons during the Spring Festival and has been decreasing since then, currently at a neutral level in the same period in recent years. The Strait of Hormuz has been almost closed for many days, causing Middle - Eastern oil - producing countries to cut production. However, with the G7 countries discussing the release of strategic oil reserves and Trump's statement, the crude oil price has dropped significantly from a high level. New production capacities of 500,000 tons/year of BASF (Guangdong) FDPE and 300,000 tons/year of Yulong Petrochemical LDPE/EVA were put into operation in January 2026, and there are no plans to put new production capacities into operation in the first quarter. After the Lantern Festival, downstream factories resumed work, and the rigid demand was released intensively. The prices of agricultural films in North and East China increased, while those in South China remained stable. Although the spot trading was weak due to the downstream's resistance to high prices, the plastic price is likely to rise if the Strait of Hormuz cannot resume navigation [1] Futures and Spot Market Conditions - **Futures**: The plastic 2605 contract increased in position and fluctuated upwards, with a minimum price of 7,550 yuan/ton, a maximum price of 8,245 yuan/ton, and a final closing price of 8,154 yuan/ton, above the 60 - day moving average, with a gain of 2.18%. The position increased by 9,286 lots to 322,673 lots [2] - **Spot**: The PE spot market showed mixed trends, with price changes ranging from - 900 to + 200 yuan/ton. LLDPE was reported at 7,880 - 8,470 yuan/ton, LDPE at 9,980 - 11,010 yuan/ton, and HDPE at 8,040 - 8,800 yuan/ton [3] Fundamental Tracking - **Supply**: On March 11, the number of maintenance devices changed little, and the plastic operating rate remained at around 89%, at a neutral level [1][4] - **Demand**: As of the week of March 6, the downstream operating rate of PE increased by 10.4 percentage points to 28.62% week - on - week. After the Spring Festival, downstream factories gradually resumed production but did not return to the pre - holiday level, showing a seasonal change [1][4] - **Inventory**: The petrochemical inventory increased by 480,000 tons to 940,000 tons during the Spring Festival. On Wednesday, the early petrochemical inventory increased by 40,000 tons to 840,000 tons, 25,000 tons higher than the same period last lunar year, currently at a neutral level in the same period in recent years [1][4] - **Raw Materials**: The Brent crude oil 05 contract fell below $90/barrel. The price of Northeast Asian ethylene increased by $20/ton to $970/ton week - on - week, and the price of Southeast Asian ethylene increased by $20/ton to $940/ton week - on - week [4]

Report Summary 1) Report Industry Investment Rating No investment rating information is provided in the report. 2) Core View - The domestic supply - demand pattern of plastics has improved. With expectations of the chemical industry counter - involution and the situation in the Middle East boosting the energy - chemical sector, plastics are expected to show a moderately strong oscillation. Attention should be paid to the post - holiday resumption of production progress of downstream industries [1]. 3) Summary by Relevant Catalogs [Market Analysis] - On March 6, new maintenance devices such as Fujian United's full - density line 1 were added, and the plastic operating rate dropped to around 90%, which is at a moderately high level. The new capacities of BASF (Guangdong) FDPE (500,000 tons/year) and Yulong Petrochemical LDPE/EVA (300,000 tons/year) were put into production in January 2026, and there are no new capacity plans for the first quarter. The downstream resumption of production is slow, and the procurement intention is weak. The prices of agricultural films in North and East China have risen, while those in South China are stable [1]. - The conflict between the US, Israel and Iran has led to blocked navigation in the Strait of Hormuz, causing a sharp increase in crude oil prices, which significantly boosts plastics. Iran's PE imports account for about 8% of China's total imports and about 3% of domestic production, while the entire Middle East region's imports account for about 20% of domestic production [1]. [Futures and Spot Market Quotes] - Futures: The 2605 plastic futures contract increased in positions and oscillated upward, with a minimum price of 7,360 yuan/ton, a maximum price of 7,695 yuan/ton, and a final closing price of 7,691 yuan/ton, above the 60 - day moving average, with a gain of 3.88%. The open interest increased by 18,481 lots to 409,024 lots [2]. - Spot: Most PE spot markets rose, with price changes ranging from +0 to +400 yuan/ton. LLDPE was quoted at 7,470 - 8,170 yuan/ton, LDPE at 9,980 - 10,780 yuan/ton, and HDPE at 7,600 - 9,000 yuan/ton [3]. [Fundamental Tracking] - Supply: On March 6, new maintenance devices were added, and the plastic operating rate dropped to around 90%, which is at a moderately high level [1][4]. - Demand: As of the week of March 6, the PE downstream operating rate increased by 10.4 percentage points to 28.62% week - on - week. After the Spring Festival, downstream industries gradually resumed production but have not returned to pre - holiday levels, showing seasonal changes [1][4]. - Inventory: During the Spring Festival, petrochemical inventory increased by 480,000 tons to 940,000 tons. After the Spring Festival, inventory has been decreasing. As of Friday, petrochemical early - morning inventory decreased by 5,000 tons to 820,000 tons, 60,000 tons lower than the same period of last lunar year, and is currently at a neutral level compared to recent years [1][4]. - Raw Materials: The Brent crude oil 05 contract rose above $85 per barrel. The price of Northeast Asian ethylene increased by $50 per ton to $850 per ton week - on - week, and the price of Southeast Asian ethylene increased by $50 per ton to $820 per ton week - on - week [4].

Report Industry Investment Rating - Not provided Core Viewpoints - Plastic supply and demand pattern improves limitedly, but there are still expectations for the chemical industry to counter the involution. The upstream petrochemical inventory is low, and the basis has been repaired. Due to the long Spring Festival holiday, the risk of unilateral positions is high, so it is recommended to hold no positions for the holiday. Since there is new plastic production capacity put into operation recently, the operating rate is higher than that of PP, and the concentrated demand for plastic film has not started yet, it is advisable to hold a light - position short L - PP spread [1]. Summary by Relevant Catalogs Market Analysis - On February 12, the number of overhauled devices changed little, and the plastic operating rate remained at around 92%, which is at a moderately high level. As of the week of February 6, the downstream operating rate of PE decreased by 4.03 percentage points to 33.73% week - on - week. Entering the Spring Festival holiday, orders and raw material inventory of agricultural film continued to decrease, and packaging film orders also decreased. The overall downstream operating rate of PE declined seasonally. Petrochemical de - stocking in February was acceptable, and the current petrochemical inventory is at a low level in recent years. The cost of crude oil rebounded due to market concerns about military conflicts between the US and Iran. New plastic production capacities were put into operation in January 2026. The plastic operating rate increased slightly recently. The concentrated demand for plastic film has not started yet, and it is expected that the downstream operating rate will continue to decline [1]. Futures and Spot Market Quotes - **Futures**: The plastic 2605 contract opened higher, then decreased in position and oscillated downward. The lowest price was 6732 yuan/ton, the highest was 6834 yuan/ton, and it finally closed at 6734 yuan/ton, above the 60 - day moving average, with a decline of 0.72%. The position decreased by 2602 lots to 501315 lots [2]. - **Spot**: Some prices in the PE spot market declined, with the price change ranging from - 100 to + 0 yuan/ton. LLDPE was quoted at 6600 - 7020 yuan/ton, LDPE at 8280 - 8960 yuan/ton, and HDPE at 6760 - 7990 yuan/ton [3]. Fundamental Tracking - **Supply**: On February 12, the number of overhauled devices changed little, and the plastic operating rate remained at around 92%, at a moderately high level [4]. - **Demand**: As of the week of February 6, the downstream operating rate of PE decreased by 4.03 percentage points to 33.73% week - on - week. Entering the Spring Festival holiday, orders and raw material inventory of agricultural film continued to decrease, and packaging film orders also decreased. The overall downstream operating rate of PE declined seasonally [4]. - **Inventory**: On Thursday, the petrochemical early - morning inventory decreased by 20,000 tons to 440,000 tons week - on - week, 25,000 tons lower than the same period of last lunar year. Petrochemical de - stocking was acceptable, and the current petrochemical inventory is at a low level in recent years [4]. - **Raw Materials**: The Brent crude oil 04 contract rose above $69 per barrel. The price of Northeast Asian ethylene remained flat at $695 per ton week - on - week, and the price of Southeast Asian ethylene remained flat at $675 per ton week - on - week [4].

Core Viewpoint - Wanhua Chemical is undertaking a significant capital operation to enhance its carbon two industry assets amid cyclical adjustments in the chemical industry, with a planned capital increase of up to 19.086 billion yuan for its wholly-owned subsidiary, Wanhua Olefins [1][2] Group 1: Capital Increase Details - The capital increase amounts to 19.086 billion yuan, achieved through a combination of asset injection and debt-to-equity conversion, rather than direct cash outlay [1][2] - Wanhua Chemical will inject approximately 14.586 billion yuan worth of integrated ethylene-related assets and 4.5 billion yuan of debt into Wanhua Olefins, raising the subsidiary's registered capital from 3 billion yuan to 4 billion yuan [1][2] Group 2: Strategic Implications - The capital operation aims to consolidate the management of two 1 million-ton ethylene facilities under a single legal entity, enhancing operational efficiency and optimizing the subsidiary's capital structure [2][3] - This strategic move is intended to create a more competitive carbon two industry platform, allowing for better resource allocation and cost reduction [2][3] Group 3: Financial Context - Wanhua Chemical has faced financial pressure due to aggressive capacity expansion and high leverage, with significant capital expenditures leading to increased reliance on external financing [3][4] - Despite achieving a revenue of 144.226 billion yuan in the first three quarters of 2025, the company's net profit attributable to shareholders decreased by 17.45% year-on-year to 9.157 billion yuan, indicating a decline in profitability despite revenue growth [3][4] Group 4: Market Challenges - The company has noted that the petrochemical industry is experiencing price declines due to an oversupply of ethylene and other products, which has compressed profit margins [4] - The capital increase is seen as a strategic response to external market uncertainties, aiming to build a healthier financial and operational platform for Wanhua Olefins [4]

Report Industry Investment Rating - The investment view for both PE and PP is "oscillating", indicating that the short - term market has no obvious driving force and is expected to fluctuate within a certain range [3][5] Core View - The prices of both PE and PP stopped falling and rebounded after the SASAC issued a document to resist involution. Multiple factors such as supply, demand, inventory, cost, and profit affect the market trends of PE and PP, and the overall short - term market is in an oscillating state [2][5] Summary by Related Catalogs PE Fundamental Changes - **Supply**: This week, China's polyethylene production totaled 684,800 tons, a 2.17% increase from last week. The capacity utilization rate of Chinese polyethylene production enterprises was 84.11%, a 0.06 - percentage - point increase from the previous period. Although there were new device overhauls, some existing devices restarted [3] - **Demand**: The average operating rate of downstream products of Chinese LLDPE/LDPE and polyethylene decreased compared with the previous period. In October, China's polyethylene imports decreased year - on - year and month - on - month, with different trends in different varieties [3] - **Inventory**: The sample inventory of Chinese polyethylene production enterprises was 470,600 tons, a 3.98% increase from the previous period, and the inventory trend changed from falling to rising [3] - **Cost**: The cost of methanol production increased, while the costs of oil - based, coal - based, ethylene - based, and ethane - based production decreased. The international oil price declined due to factors such as the resumption of production in some Iraqi oil fields and the US promoting peace talks between Russia and Ukraine [3] - **Profit**: The profit of PE was lower than the same period last year [30] - **Import and Export**: PE exports were better than the same period last year [35] PP Fundamental Changes - **Capacity and Production**: This week, China's polypropylene production was 801,300 tons, a 0.68% decrease from last week but an 18.45% increase from the same period last year. The average capacity utilization rate of polypropylene was 78.25%, a 0.64% increase from the previous period [5] - **Inventory**: The total commercial inventory of Chinese polypropylene decreased by 3.60% from the previous period, the port sample inventory increased by 5.25%, and the production enterprise inventory decreased by 4.97% [5] - **Downstream Demand**: The average operating rate of polypropylene increased slightly. The demand for PP products showed structural differentiation. The demand for BOPP films, which are used as packaging materials for food, clothing, and express delivery, was supported [5] - **Cost and Profit**: The profits of oil - based, coal - based, methanol - based, PDH - based, and externally - purchased propylene - based PP all declined. The average weekly profit of Chinese polypropylene imports decreased by 20.41% from last week [5] - **Production Gross Margin**: The profit was similar to the same period last year [85]