Report Title - The Q4 2025 Quarterly Report on Polyolefins by Guantong Futures: New Capacity Commissioning Puts Pressure, Polyolefins to Oscillate Weakly [1] Core Viewpoints - Polyolefins are gradually exiting the maintenance season, with the operating rate expected to rise in October. Import profit is average, and import volume is expected to remain low. In Q4, new PE and PP capacities of 2.7 million tons/year and 950,000 tons/year will be commissioned respectively. Multiple units are scheduled to start operation by the end of the year, having little impact on the 01 contract. Attention should be paid to the commissioning progress of new capacities. The demand for polyolefins in Q4 will improve quarter-on-quarter but perform averagely compared to the same period in previous years. New orders are mediocre. Amid the global trade war, enterprises' early rush for exports and the pre - consumption of national subsidies may overdraw the Q4 demand. Although downstream enterprises have stocked up, they remain cautious. Crude oil prices will still face pressure in Q4, and the cost support for polyolefin prices is expected to be limited. Petrochemical inventories are at a neutral level compared to the same period in recent years. Recently, polyolefin traders' inventories have decreased but are still at a relatively high level compared to the same period in recent years. There is no actual anti - involution policy in the polyolefin industry yet. Anti - involution and the elimination of old - fashioned devices to solve the problem of overcapacity in the petrochemical industry are still macro - policies that will affect subsequent market conditions and are worthy of close attention. It is expected that polyolefins will oscillate weakly in Q4 under the scenario of both supply and demand increasing [5][110]. Summary by Directory Polyolefin Futures Price Trends - The report presents the daily K - lines of the plastic weighted contract and the PP weighted contract [8][10] Plastic Spot Prices - It shows the spot prices of plastics in North China and the spot price (CFR, mid - price) of linear low - density polyethylene in the Far East [14][16] Plastic Basis Trends - Since 2025, the plastic basis has been continuously weakening from a historical high, reaching a low of - 136 yuan/ton in late July. Recently, with stable spot prices and continuous decline in futures prices, the plastic basis has rebounded to around 200 yuan/ton, at a relatively low - neutral level. The PP basis has declined slightly recently but remains at a neutral position [23][29] Plastic Production - In August 2025, the PE maintenance volume decreased by 9.63% month - on - month to 457,900 tons, an increase of 25.42% year - on - year. The cumulative PE maintenance volume from January to August 2025 increased by 0.86% year - on - year to 3.2809 million tons, at the highest level in the same period in history. In August 2025, the PE output increased by 2.52% month - on - month to 2.7702 million tons, an increase of 15.38% year - on - year. The cumulative PE output from January to August 2025 increased by 17.24% year - on - year to 21.6233 million tons, also at the highest level in the same period in history [34] Plastic Operating Rate - In August 2025, the PE operating rate increased by 2.37 percentage points month - on - month to 81.3%, a decrease of 1.17 percentage points year - on - year, at a relatively low - neutral level among the same period in previous years. Recently, the operating rate has risen to around 85% and is currently at a neutral level. With the planned restart of some maintenance units at the end of September, the plastic operating rate is expected to rise slightly [39] Plastic Under - Maintenance Units - Besides long - term shut - down units such as those of North Huajin HDPE and Shenyang Chemical's full - density units, new units in 2025 like those of Lianyungang Petrochemical HDPE and Zhonghan Petrochemical LLDPE are still under maintenance [41] Plastic Planned Maintenance Units in Q4 - According to Longzhong Information, there are not many PE units planned for maintenance in Q4 2025, involving a total capacity of 3.18 million tons. Some units will be under maintenance for more than 30 days [44] Plastic New Capacities - In the first three quarters of 2025, multiple new capacities were commissioned, with a total of 3.43 million tons/year. In Q4 2025, the expected new capacity is 2.7 million tons. Some new capacities are expected to be commissioned in October, while others at the end of the year, having little impact on the 2025 output. There is also a possibility of delay in the commissioning of new capacities in Q4 [48] PP Production - In August 2025, the PP maintenance volume decreased by 8.76% month - on - month to 657,900 tons, an increase of 8.89% year - on - year. The cumulative PP maintenance volume from January to August 2025 increased by 5.13% year - on - year to 5.0087 million tons, at the highest level in the same period in history. In August 2025, the PP output increased by 2.32% month - on - month to 3.5045 million tons, an increase of 18.00% year - on - year. The cumulative PP output from January to August 2025 increased by 16.92% year - on - year to 26.3476 million tons, at the highest level in the same period in history [52] PP Operating Rate - In August 2025, the PP operating rate increased by 1.65 percentage points month - on - month to 78.80%, an increase of 3.55 percentage points year - on - year, at a relatively low - neutral level. Recently, the operating rate has dropped to around 79% due to new maintenance units, and the production ratio of standard - grade drawstring has risen to around 30%. It is expected that the operating rate will recover in early October [57] PP Under - Maintenance Units - Besides long - term shut - down units such as those of Dalian Petrochemical and Wuhan Petrochemical, new units in 2025 like those of Qilu Petrochemical and Luoyang Petrochemical are still under maintenance [60] PP Planned Maintenance Units in Q4 - In Q4, multiple PP units are planned for maintenance, and the maintenance is expected to be concentrated from October to November [63] PP New Capacities - In the first three quarters of 2025, 4.155 million tons of new PP capacities were commissioned. In Q4 2025, the expected new capacity is 950,000 tons, with some units planned to be commissioned in December [66] Plastic Imports and Exports - In August 2025, China's PE imports were 950,200 tons, a decrease of 22.14% year - on - year and 14.17% month - on - month, at the lowest level in the same period in previous years. The cumulative PE imports from January to August 2025 were 8.9816 million tons, a decrease of 0.84% year - on - year. In August 2025, China's PE exports were 116,000 tons, an increase of 61.83% year - on - year and 14.12% month - on - month, at the highest level in the same period in previous years. The cumulative PE exports from January to August 2025 were 729,700 tons, an increase of 25.91% year - on - year. In August 2025, the net PE imports were 834,200 tons, a decrease of 27.36% year - on - year. The cumulative net PE imports from January to August 2025 were 8.2518 million tons, a decrease of 2.66% year - on - year. The LLDPE import profit is currently negative, and with the release of domestic capacities, the net PE imports are expected to remain low [72] PP Imports and Exports - In August 2025, China's PP imports were 247,000 tons, a decrease of 21.39% year - on - year and 12.54% month - on - month, at the lowest level in the same period in recent years. The cumulative PP imports from January to August 2025 were 2.1676 million tons, a decrease of 9.77% year - on - year. In August 2025, China's PP exports were 275,900 tons, an increase of 29.83% year - on - year and 4.76% month - on - month, at the highest level in the same period in previous years. The cumulative PP exports from January to August 2025 were 2.1035 million tons, an increase of 29.03% year - on - year. The PP drawstring import window is closed, and the import volume is expected to be low [78] Polyolefin Downstream - From January to August 2025, the cumulative output of plastic products was 52.1815 million tons, a year - on - year increase of 3.6%, but the cumulative year - on - year growth rate decreased slightly. In August, the year - on - year growth rate was - 4.1%. The cumulative export value of plastic products from January to August 2025 was 500.396 billion yuan, a year - on - year decrease of 0.5%, with a slightly rising growth rate but still negative. In August, the year - on - year growth rate dropped to 0.8%, a decrease of 2.5 percentage points month - on - month. From January to August 2025, the cumulative year - on - year growth rate of the domestic total retail sales of consumer goods was 3.4%, slower than the 3.7% from January to July. The cumulative year - on - year growth rate of the total retail sales of consumer goods has been slowing down since May, indicating increasing pressure on domestic demand. As of the week of September 26, the PE downstream operating rate increased by 1.21 percentage points week - on - week to 44.13%, and the PP downstream operating rate increased by 0.40 percentage points week - on - week to 51.85%, both at relatively low levels in the same period in previous years [83][89][94] Polyolefin Inventories - After the Spring Festival in 2025, petrochemical inventories were at an average level compared to the same period in recent years. As of September 26, petrochemical inventories decreased by 30,000 tons week - on - week to 585,000 tons, 105,000 tons lower than the same period last year. Recently, polyolefin traders' inventories have decreased but are still at a relatively high level compared to the same period in recent years [102] Polyolefin Profits - In September, the coal - based and oil - based PE profits decreased slightly due to a slight decline in PE prices. In September, the profits of all PP production processes declined to varying degrees. The coal - based PP production process remained profitable, while the other processes were still in the red, with the MTO process having a relatively large loss [108]

1. Report Industry Investment Rating - No information provided in the report regarding the industry investment rating 2. Core Viewpoints - No clear core viewpoints are presented in the provided content 3. Summaries by Related Catalogs PE Fundamental Changes - PE data shows various trends over time, including production, price, and inventory changes. For example, PE production increased from 610,000 tons last week to 630,000 tons this week, a rise of 2.97%. HDPE production increased from 260,000 tons to 270,000 tons, a 2.62% increase. PE开工率 increased from 78.04% to 80.36%, a 2.97% increase [5]. - Different types of PE (LLDPE, LDPE, HDPE) have different price and production change rates. LLDPE had a 4.65% increase in production, LDPE had a 16.97% increase, and HDPE had a 25.08% increase [2]. PP Fundamental Changes - PP data also shows trends in price, production, and inventory. PP production increased by 12.59% this week compared to last week. PP开工率 increased from 33.2% to 34.0%, a 2.44% increase [5]. - PP has different production methods (MTO, PDH), and their profit margins and price differentials are presented. For example, MTO -875, PDH -489 [3].

JIM FITTERLING, CHAIR AND CEO September 11, 2025 Macroeconomic Backdrop Consistent with 2Q Earnings Strong Moderate/Mixed Weak Changes vs. Prior Update Dow 3Q Updates DOW PRESENTS AT MORGAN STANLEY LAGUNA CONFERENCE 1. Average 2022 – 2024 % of Total Dow Revenue excluding Corporate and Hydrocarbons & Energy 2. Current consensus expectations for 3Q25 EBITDA of $770MM as of September 9, 2025 2 Market Vertical (% of Revenue1 ) NAA LAA EMEAI China Rest of World Packaging ~30% Infrastructure ~40% Consumer ~20% Mo ...

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The polyolefin market shows a narrow - range downward trend. The restart of previously overhauled devices and new capacity releases lead to an obvious increase in supply. The supply side has certain pressure as upstream inventory transfers downstream, with a slight decrease in producers' inventory and an increase in mid - stream inventory. The cost - side support is weak, and the demand side is slowly rising but lacks new orders in the short term, resulting in limited upward - driving force [3] Summary by Directory 1. Polyolefin Basis Structure - The closing price of the L main contract is 7270 yuan/ton (-17), and the closing price of the PP main contract is 6965 yuan/ton (-9). The LL North China spot price is 7180 yuan/ton (-50), the LL East China spot price is 7190 yuan/ton (-110), and the PP East China spot price is 6850 yuan/ton (-50). The LL North China basis is -90 yuan/ton (-33), the LL East China basis is -80 yuan/ton (-93), and the PP East China basis is -115 yuan/ton (-41) [1] 2. Production Profit and Operating Rate - PE operating rate is 78.7% (+0.0%), and PP operating rate is 80.2% (+2.0%). PE oil - based production profit is 315.2 yuan/ton (+17.8), PP oil - based production profit is -324.8 yuan/ton (+17.8), and PDH - based PP production profit is 2.2 yuan/ton (-59.9) [1] 3. Polyolefin Non - Standard Price Difference - Not elaborated in the content 4. Polyolefin Import and Export Profit - LL import profit is -150.0 yuan/ton (-20.6), PP import profit is -550.0 yuan/ton (-50.6), and PP export profit is 26.2 US dollars/ton (+6.3) [2] 5. Polyolefin Downstream Operating Rate and Downstream Profit - PE downstream agricultural film operating rate is 17.5% (+2.9%), PE downstream packaging film operating rate is 49.6% (-0.3%), PP downstream plastic weaving operating rate is 42.3% (+0.3%), and PP downstream BOPP film operating rate is 60.4% (-0.3%) [2] 6. Polyolefin Inventory - Upstream inventory transfers downstream, producers' inventory decreases slightly, and mid - stream inventory accumulates [3] Strategies - Unilateral: Neutral; - Inter - period: 01 - 05 reverse spread; - Inter - variety: Long L - P [4]

Report Industry Investment Rating - Unilateral: Neutral; Inter - period: None; Cross - variety: None [3] Core Viewpoints - The traditional consumption peak seasons "Golden September and Silver October" are approaching. The demand for PE downstream agricultural films and greenhouse films is gradually starting, and the packaging film industry is stocking up in advance. The plastic products industry is recovering with the seasonal demand growth of home appliances and automobiles. The number of PE parking and maintenance devices has increased, slightly alleviating the supply pressure. However, the overall current operation is still at a relatively high level, with production enterprises accumulating inventory and upstream facing certain de - stocking pressure. The PP operation rate is flat month - on - month, and the inventory in the upstream and mid - stream links has decreased slightly. New PP production capacity is continuously being released. The international oil price shows a weak trend, the oil - based production profit is acceptable, the propane price has increased slightly, and the PDH - based PP profit is near the break - even point [2] Summary by Directory 1. Polyolefin Basis Structure - It includes the trend of plastic futures' main contracts and the basis between LL East China and the main contract, as well as the trend of polypropylene futures' main contracts and the basis between PP East China and the main contract [8][11] 2. Production Profit and Operation Rate - For PE, it involves LL production profit (crude oil - based), PE operation rate, PE weekly output, and PE maintenance loss. For PP, it includes PP production profit (crude oil - based), PP production profit (PDH - based), PP operation rate, PP weekly output, PP maintenance loss, and PDH - based PP capacity utilization [19][22][29] 3. Polyolefin Non - Standard Price Difference - It covers the price differences between HD injection molding - LL East China, HD blow molding - LL East China, HD film - LL East China, LD East China - LL, PP low - melt copolymer - drawn wire East China, and PP homopolymer injection molding - drawn wire East China [28][35][36] 4. Polyolefin Import and Export Profit - For LL, it includes LL import profit, the price difference between LL US Gulf FOB and China CFR, the price difference between LL Southeast Asia CFR and China CFR, and the price difference between LL Europe FD and China CFR. For PP, it involves PP import profit, PP export profit (to Southeast Asia), and the price differences between PP homopolymer injection molding from different regions and China CFR [43][53][61] 5. Polyolefin Downstream Operation and Downstream Profit - It includes the operation rates of PE downstream agricultural films, packaging films, and winding films, as well as the operation rates and production profits of PP downstream plastic weaving, BOPP, and injection molding [62][63][71] 6. Polyolefin Inventory - It includes the inventories of PE oil - based enterprises, PE coal - chemical enterprises, PE traders, PE ports, PP oil - based enterprises, PP coal - chemical enterprises, PP traders, and PP ports [73][78][83]

Group 1: General Information - Report Name: Polyolefin Daily Report [1] - Date: August 19, 2025 [2] - Research Team: Energy and Chemical Research Team [4] Group 2: Market Quotes - Futures Market Quotes: Plastic 2601 opened at 7352 yuan/ton, closed at 7334 yuan/ton, down 10 yuan/ton (-0.14%); Plastic 2605 opened at 7346 yuan/ton, closed at 7312 yuan/ton, down 29 yuan/ton (-0.40%); Plastic 2509 opened at 7308 yuan/ton, closed at 7292 yuan/ton, down 3 yuan/ton (-0.04%); PP2601 opened at 7073 yuan/ton, closed at 7048 yuan/ton, down 35 yuan/ton (-0.49%); PP2605 opened at 7075 yuan/ton, closed at 7048 yuan/ton, down 31 yuan/ton (-0.44%); PP2509 opened at 7051 yuan/ton, closed at 7026 yuan/ton, down 36 yuan/ton (-0.51) [5] Group 3: Market Analysis - Market Performance: Futures prices fluctuated downward, suppressing the spot market atmosphere. Traders were eager to sell, but downstream factories' enthusiasm for replenishing stocks did not improve, mainly purchasing in small quantities at low prices [6] - Supply Side: Upstream device operating loads continued to increase. Although PP maintenance losses were still at a high level, with the restart of previously shut - down devices and few new maintenance devices, the impact of maintenance decreased and the expectation of new capacity expansion increased. PE had no new plans, and after the end of the centralized maintenance period, the operating load and output continued to increase. Next week, due to more shut - down and planned shut - down devices, the supply pressure was relatively neutral [6] - Downstream Consumption: The operating loads of agricultural film, plastic weaving, and BOPP increased month - on - month. Some enterprises' orders improved, but the expectation for the peak season was weaker year - on - year [6] - Market Outlook: During the macro - window period, the market returned to fundamentals. A unilateral oscillation mindset was adopted. There was an expectation of improvement in supply - demand margins during the off - peak to peak season transition. Attention should be paid to the improvement of demand in the second half of the month and the actual support of inventory reduction [6] Group 4: Industry News - Inventory: On August 18, 2025, the inventory level of major producers was 825,000 tons, a 7.84% increase (60,000 tons) from the previous working day. The inventory in the same period last year was 830,000 tons [7] - PE Market Price: The PE market price was weakly adjusted. The LLDPE price in North China was 7200 - 7430 yuan/ton, in East China was 7260 - 7700 yuan/ton, and in South China was 7380 - 7700 yuan/ton [7] - Propylene Market Price: The mainstream price of propylene in the Shandong market was temporarily 6400 - 6450 yuan/ton, unchanged from the previous working day. There were both device startups and shutdowns, and the supply side was mixed. Production enterprises' quotes were mostly slightly increased, and downstream factories purchased at low prices. The market was mainly a game between supply and demand [7] - PP Market Price: The PP market declined slightly. The mainstream price of North China wire drawing was 6900 - 7020 yuan/ton, in East China was 6960 - 7080 yuan/ton, and in South China was 6880 - 7120 yuan/ton [8]

Report Information - Report Name: Polyolefin Daily Report [1] - Date: August 7, 2025 [2] Industry Investment Rating - Not provided Core Viewpoints - The futures market opened higher and fluctuated upwards, boosting market sentiment. Spot prices fluctuated slightly, and downstream buyers replenished stocks according to orders. However, the supply pressure continued, and new PE and PP production facilities were planned to be put into operation in the third quarter. The demand was weak and needed improvement, and the downstream operating load remained low overall. It was expected that the demand would gradually emerge from the off - season in the second half of the month, but the downstream enterprises mainly maintained a low - inventory strategy, and the driving force for active replenishment was limited. The policy - driven market led the polyolefins to follow, but the loose fundamental pattern would continue to restrict their upward space. After the digestion of the anti - involution sentiment, the polyolefins would return to a weak and volatile operation [6] Summary by Directory 1. Market Review and Outlook - **Futures Market**: The L2509 contract of linear low - density polyethylene (LLDPE) opened higher, fluctuated upwards during the session, and finally closed at 7,321 yuan/ton, up 33 yuan/ton (0.45%). The trading volume was 167,000 lots, and the open interest decreased by 10,020 to 291,496 lots. The PP main contract closed at 7,078 yuan/ton, up 12 yuan (0.17%), and the open interest decreased by 7,127 to 251,400 lots [6] - **Supply**: In the third quarter, new PE production facilities of Jilin Petrochemical, ExxonMobil Huizhou, and Guangxi Petrochemical were planned to be put into operation. The second - phase project of Ningbo Daxie with a total annual production capacity of 900,000 tons was expected to be launched, which would have a significant impact on the supply side [6] - **Demand**: The downstream operating load remained low overall. Although the operating rate of the agricultural film industry rebounded from a low level, the demand followed up slowly. The orders in the construction field were mediocre, and the operating rates of the pipe and plastic weaving industries were at historical lows in the same period. The demand for daily - use injection - molded products increased slightly month - on - month [6] 2. Industry News - **Inventory**: On August 6, 2025, the inventory level of major producers was 785,000 tons, a decrease of 20,000 tons (2.48%) from the previous working day. The inventory in the same period last year was 810,000 tons [7] - **PE Market**: The PE market prices partially increased. The LLDPE prices in North China were in the range of 7,170 - 7,450 yuan/ton, in East China 7,230 - 7,650 yuan/ton, and in South China 7,320 - 7,650 yuan/ton [7] - **Propylene Market**: The propylene market price in Shandong increased significantly. As of the 12 - o'clock closing, the reference price was 6,250 - 6,270 yuan/ton, an increase of 85 yuan/ton from the previous day. The temporary shutdown of some supply facilities boosted the operators' sentiment, and enterprises mainly raised their offers. The downstream followed up actively, the premium range of actual orders expanded, and the trading center shifted significantly upwards [7] - **PP Market**: The PP market was stable with a slight upward trend, and some prices increased by 20 - 30 yuan/ton. The mainstream prices of drawn PP in North China were in the range of 6,940 - 7,080 yuan/ton, in East China 7,000 - 7,130 yuan/ton, and in South China 6,960 - 7,150 yuan/ton [7] 3. Data Overview - The report presented multiple charts, including the LLDPE basis, PP basis, LLDPE - PP price spread, crude oil futures main - contract settlement price, inventory of two major oil companies, and the year - on - year increase or decrease rate of the two - oil inventory, with data sources from Wind and Zhuochuang Information [9][16][17]

1. Report Industry Investment Rating - The investment rating for the plastics industry is "Oscillating Upward" [1] 2. Core View of the Report - The report suggests a strategy of buying on dips or implementing a 09 - 01 reverse spread. Although there are issues such as high inventory and low - season demand in the plastics industry, the upcoming release of a new round of stability - growth work plans for key industries and the elimination of old and backward devices are expected to improve market sentiment [1] 3. Summary by Relevant Catalogs Strategy Analysis - On July 24, the plastic operating rate remained at around 87%, a neutral level. The PE downstream operating rate rose 0.64 percentage points to 38.51%, still at a relatively low level in recent years. The petrochemical de - stocking speed has accelerated, but the inventory is still high. The coal price has risen significantly due to production checks. With new capacity coming on - stream and restart of some devices, the plastic operating rate has increased slightly. Considering the upcoming policies and market sentiment improvement, it is recommended to buy on dips or implement a 09 - 01 reverse spread [1] Futures and Spot Market Conditions - Futures: The plastics 2509 contract oscillated upward with a decrease in positions, closing at 7385 yuan/ton, up 0.89%. The trading volume decreased by 16,764 lots to 371,617 lots [2] - Spot: The PE spot market showed mixed price movements, with price changes ranging from - 30 to + 50 yuan/ton. LLDPE was priced at 7160 - 7440 yuan/ton, LDPE at 9280 - 9630 yuan/ton, and HDPE at 7620 - 8250 yuan/ton [3] Fundamental Tracking - Supply: On July 24, the number of overhaul devices changed little, and the plastic operating rate remained at around 87%, a neutral level [4] - Demand: As of the week of July 18, the PE downstream operating rate rose 0.64 percentage points to 38.51%. The agricultural film is in the off - season with a slight decrease in orders, while packaging film orders increased slightly. The overall downstream operating rate is still at a relatively low level in recent years [4] - Inventory: The petrochemical early inventory on Thursday decreased by 15,000 tons to 750,000 tons, 40,000 tons higher than the same period last year. The de - stocking speed has accelerated, but the inventory is still high [4] - Raw Materials: Brent crude oil's October contract oscillated around $68/barrel. The Northeast Asian ethylene price remained flat at $830/ton, and the Southeast Asian ethylene price also remained flat at $820/ton [4]

1. Report Industry Investment Rating - The investment rating for the plastics industry is "Oscillating Upward" [1] 2. Core View of the Report - The plastics market is expected to experience a strong oscillation in the near future. It is recommended to switch to buying on dips or engage in a 09 - 01 reverse spread strategy. This is due to factors such as the restart of previously shut - down production facilities, the impact of coal price increases on costs, the current situation of downstream demand, and positive market sentiment driven by government policies [1] 3. Summary by Relevant Catalogs Strategy Analysis - On July 22, the restart of maintenance devices in Zhejiang Petrochemical Phase II LDPE and Shanghai SECCO HDPE led to the plastics operating rate rising to around 87%, currently at a neutral level. The downstream PE operating rate increased by 0.64 percentage points to 38.51% week - on - week. Although the agricultural film is in the off - season with a slight decrease in orders, packaging film orders increased slightly. The overall downstream PE operating rate is still at a relatively low level in recent years. The de - stocking speed of petrochemicals was slow last week, and petrochemical inventory is at a relatively high level in recent years. Due to coal production inspections, coal prices have risen significantly. With new production capacity coming on - stream and the restart of maintenance devices, and considering government policies, it is recommended to buy on dips or engage in a 09 - 01 reverse spread [1] Futures and Spot Market Conditions - **Futures**: The plastics 2509 contract reduced positions and oscillated upward, with a low of 7264 yuan/ton, a high of 7373 yuan/ton, and a final closing price of 7368 yuan/ton, above the 60 - day moving average, up 1.26%. The open interest decreased by 13,406 lots to 394,148 lots [2] - **Spot**: Most of the PE spot market prices rose, with price changes ranging from - 50 to + 50 yuan/ton. LLDPE was reported at 7130 - 7440 yuan/ton, LDPE at 9240 - 9630 yuan/ton, and HDPE at 7660 - 8220 yuan/ton [3] Fundamental Tracking - **Supply**: On July 18, there were few changes in maintenance devices, and the plastics operating rate remained at around 84%, currently at a neutral level [4] - **Demand**: As of the week of July 18, the downstream PE operating rate increased by 0.64 percentage points to 38.51% week - on - week. The agricultural film is in the off - season, with a slight decrease in orders, while packaging film orders increased slightly. The overall downstream PE operating rate is still at a relatively low level in recent years [4] - **Inventory**: Petrochemical early - morning inventory on Tuesday decreased by 30,000 tons to 790,000 tons compared to the previous day, 25,000 tons higher than the same period last year. The de - stocking speed of petrochemicals was slow last week, and petrochemical inventory is at a relatively high level in recent years [4] - **Raw Materials**: The Brent crude oil 09 contract fell to $68/barrel. The price of Northeast Asian ethylene remained flat at $830/ton week - on - week, and the price of Southeast Asian ethylene also remained flat at $820/ton [4]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In the medium term, the prices of polypropylene (PP) and polyethylene (PE) are bearish. In the short term, the commodity atmosphere is warm, and the prices of plastic PP are oscillating. After the macro - sentiment weakens, they are still regarded as bearish [3][4]. 3. Summary According to Relevant Catalogs 3.1 Comprehensive Analysis and Trading Strategies - **Comprehensive Analysis**: In the third quarter, PP and PE still face significant production capacity release pressure, which eases in the fourth quarter. The expected new production capacity of standard - grade PE in the second half of the year is only 500,000 tons, with a reduced pressure compared to the first half. However, supply is not tightening as the high - level maintenance in the first half may lead to a rebound in the operation rate of existing facilities in the second half. Terminal demand is weak year - on - year, and there are no strong factors to reverse the weak demand, so there is a lack of upward momentum [3]. - **Trading Strategies**: - **Unilateral Trading**: In the medium term, prices are bearish. In the short term, due to the warm commodity atmosphere, plastic PP prices are oscillating and will turn bearish after the macro - sentiment weakens. - **Arbitrage**: Temporarily on the sidelines. - **Options**: Temporarily on the sidelines [4]. 3.2 Core Logic Analysis - **Inventory**: This week, both PE and PP inventories increased. PE total inventory rose by 34,000 tons to 1.054 million tons, and PP total inventory increased by 18,000 tons to 533,000 tons [6][8]. - **Production Capacity Release**: In the second half of the year, the estimated new PP production capacity is 3.15 million tons, and the new PE production capacity is 2.05 million tons for the 2509 contract and 800,000 tons for the 2601 contract. The release of linear low - density polyethylene (LL) production capacity slows down significantly in the second half of the year [9]. - **Demand**: The demand for PE and PP is still weak year - on - year. The PE pipe industry's operating rate decreased by 3 percentage points to 29% this week, and the BOPP and injection - molding industries of PP saw their operating rates drop by 1 percentage point to 58% and 44% respectively [12][13][14]. 3.3 PE Weekly Data Tracking - **Prices and Spreads**: The prices of various PE products and related raw materials showed different changes. For example, the Brent spot price increased by 2.5% week - on - week, and the oil - based PE profit increased by 8.5 [24]. - **Sino - US PE Relationship**: China is a net importer of PE. In 2024, the apparent demand for PE was 41.61 million tons, with an import volume of 13.85 million tons and an import dependence of 33%. The import volume from the US was 2.39 million tons, accounting for 17.2% of total imports and 5.7% of apparent demand [27]. - **Profit**: The profits of different production methods of PE, such as oil - based and coal - based, showed different trends. The oil - based PE profit increased by 8.5 week - on - week [24]. - **Inventory**: PE inventory increased this week, with the total inventory rising by 34,000 tons to 1.054 million tons [8]. - **Production and Operation**: The current PE operating load is 74.68%, a decrease of 2.2 percentage points from the previous period [46]. - **Import and Export**: This week, the PE import market continued the situation of weak supply and demand. The supply of import offers and quotas remained low, and the demand was weak, resulting in a light trading atmosphere [55]. 3.4 PP Weekly Data Tracking - **Prices and Spreads**: The prices of various PP products and related raw materials also changed. For example, the Brent spot price increased by 2.48% week - on - week, and the PP CFR China price remained unchanged [66]. - **Sino - US PP Relationship**: China is a net importer of PP. In 2024, the apparent demand for PP was 39.37 million tons, with an import volume of 367,000 tons and an import proportion of 9%. The import volume from the US was 39,400 tons, accounting for 1.07% of total imports and 0.1% of apparent demand. The cost - end propane of PP has a high dependence on the US [69]. - **Profit**: The profits of different production methods of PP, such as oil - based, CTP, and PDH, showed different trends. The oil - based PP profit increased by 58 [66]. - **Inventory**: PP inventory increased this week, with the total inventory rising by 18,000 tons to 533,000 tons [8]. - **Production and Operation**: This week, the operating load rate of domestic PP plants was 77.42%, an increase of 0.01 percentage points from the previous week and 3.76 percentage points from the same period last year [87]. - **Import and Export**: In terms of imports, overseas suppliers were cautious, and the offers were few and higher than the domestic market level, resulting in few transactions. In terms of exports, due to sufficient supply from the Middle East and emerging regions, China's PP exports had difficulty in getting large - volume orders [94][96].