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]

Investment Rating - Industry investment rating: Stronger than the market [1] Core Insights - Geopolitical tensions have significantly reduced traffic through the Strait of Hormuz, leading to a surge in oil and gas prices. Future attention should be paid to geopolitical developments and their sustainability [2] - The government has set a target for economic growth of 4.5% to 5% for the year, with a focus on reducing carbon emissions by 17% during the 14th Five-Year Plan period [2] - The petrochemical index performed the best among major industry indices, rising by 8.06% compared to the previous week, with the oil extraction sector showing a remarkable increase of 14.89% [4][7] Summary by Sections Oil - Crude oil prices have risen, with Brent crude futures closing at $91.79 per barrel, up 26.4% from last week, and TTF natural gas futures at €50.37 per megawatt-hour, up 57.9% [9] - U.S. crude oil and petroleum product inventories (excluding strategic reserves) increased by 2,935 thousand barrels [15] Polyester - Prices for polyester filament yarn have increased, with POY, DTY, and FDY prices reported at 7,480, 8,550, and 7,650 yuan per ton, respectively, showing increases of 325, 295, and 275 yuan per ton compared to last week [18] - The inventory days for polyester filament yarn in Jiangsu and Zhejiang remain stable, with FDY, DTY, and POY at 25, 27.6, and 18.7 days, respectively [21] Olefins - Sample PE spot prices decreased to 6,960 yuan per ton, down 0.57% from last week, while the petrochemical inventory of polyolefins stands at 82 thousand tons, a decrease of 4 thousand tons [28]

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].

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - For LLDPE, due to intensified geopolitical conflicts, the disk price is expected to rise. In the short - term, the disk has no obvious driving force and is expected to be mainly volatile [2]. - For PP, due to intensified geopolitical conflicts, the disk price is expected to rise. In the short - term, the disk has no obvious driving force and is expected to be mainly volatile [3]. 3. Summary According to Relevant Catalogs 3.1 LLDPE Analysis 3.1.1 Supply - China's polyethylene production is 72.94 tons, a 0.54% decrease from last week. The capacity utilization rate of Chinese polyethylene production enterprises is 87.95%, a 0.48 - percentage - point decrease from last week. There are new maintenance plans for Qilu Petrochemical and Dushanzi Petrochemical this week, and no restart of existing maintenance devices [2]. 3.1.2 Demand - The average operating rate of downstream products of Chinese LLDPE/LDPE has decreased by 0.9% compared with the previous period. The overall operating rate of agricultural films has decreased by 1.0%, and the operating rate of PE packaging films has decreased by 0.8%. The average operating rate of downstream products of Chinese polyethylene has decreased by 1.6%. The overall operating rate of agricultural films has decreased by 14.6%, the operating rate of PE pipes has decreased by 5.8%, the operating rate of PE packaging films has increased by 4.4%, the operating rate of PE hollow products has decreased by 5.3%, the operating rate of PE injection molding has increased by 0.7%, and the operating rate of PE drawing has remained the same. The cumulative import volume in 2025 is 13.407 million tons, a 3.21% year - on - year decrease. In December 2025, China's polyethylene import volume is 1.3299 million tons, a 4.62% year - on - year increase and a 25.21% month - on - month increase [2]. 3.1.3 Inventory - The sample inventory of Chinese polyethylene production enterprises is 579,700 tons, a 236,000 - ton increase from the previous period, a 68.66% month - on - month increase, and the inventory trend has changed from decreasing to increasing. The inventory of polyethylene social sample warehouses is 597,800 tons, an 81,580 - ton increase from the previous period, a 15.80% month - on - month increase, and a 2.51% year - on - year decrease. The inventory of Chinese polyethylene imported goods warehouses has increased by 8.86% month - on - month and decreased by 7.11% year - on - year [2]. 3.1.4 Basis - The current basis of the main contract is around - 14, with the disk at a premium [2]. 3.1.5 Profit - The costs of oil - based, coal - based, ethylene - based, methanol - based, and ethane - based production have increased by 117, 53, 43, 59, and 403 yuan/ton respectively compared with the previous period. There are positive factors in the international crude oil market, such as OPEC+ suspending production increases, the US - Iran war, and the continuation of US sanctions on oil - producing countries [2]. 3.1.6 Valuation - The absolute spot price is low, and the main contract is at a discount [2]. 3.1.7 Macro - Geopolitical conflicts are intensifying, and there is a risk of rising international oil prices. The macro sentiment is warm, and the RMB is appreciating [2]. 3.2 PP Analysis 3.2.1 Supply - This week, the domestic polypropylene production is 779,400 tons, a 0.34 - ton decrease from last week, a 0.43% decrease; a 30,500 - ton increase from the same period last year, a 4.07% increase. The average capacity utilization rate of polypropylene this period is 75.49%, a 0.33% month - on - month decrease; the capacity utilization rate of Sinopec is 80.42%, a 0.83% month - on - month decrease [3]. 3.2.2 Demand - This week, the average operating rate of the domestic polypropylene downstream industry has increased by 8.49 percentage points to 36.74%. The return - to - work rate of employees in downstream factories has increased, production lines have gradually restarted, and the industry has switched from the Spring Festival shutdown state to the production mode. The demand for woven bags for goods packaging and transportation has increased, and the replenishment demand for injection molding, modified PP and other industries has increased. The demand for food, daily chemical, and pharmaceutical packaging has steadily recovered [3]. 3.2.3 Inventory - The inventory of Chinese polypropylene traders' sample enterprises has increased by 73,000 tons compared with the previous period, a 41.32% month - on - month increase. The inventory of Chinese polypropylene production enterprises is 739,900 tons, a 348,700 - ton increase from the previous period, an 89.14% month - on - month increase. The inventory of Chinese polypropylene port samples has increased by 15,700 tons compared with the previous period, a 21.54% month - on - month increase [3]. 3.2.4 Basis - The current basis of the main contract is around - 61, with the disk at a premium [3]. 3.2.5 Profit - This week, the profit of oil - based PP has declined, while the profits of coal - based, methanol - based, externally - purchased propylene - based, and PDH - based PP have recovered. The average international oil price has increased this week, and the profit of oil - based PP has declined to - 734.14 yuan/ton. In the thermal coal market, the resumption of production in domestic main production areas after the festival has been slow, and the thermal coal price has risen slightly under the tight supply situation. However, the increase is less than the price of coal - based PP, and the coal - based profit has slightly recovered to - 159.80 yuan/ton [3]. 3.2.6 Valuation - The absolute spot price is low, and the main contract is at a premium [3]. 3.2.7 Macro Policy - Geopolitical conflicts are intensifying, and there is a risk of rising international oil prices. The macro sentiment is warm, and the RMB is appreciating [3]. 3.3 Main Weekly Data Changes - PP futures price is 6,611 yuan/ton, a 0.65% increase from last week; PE futures price is 6,597 yuan/ton, a 0.71% decrease from last week. PP spot price is 6,550 yuan/ton, a 1.50% decrease from last week; LLDPE spot price is 6,550 yuan/ton, a 2.67% decrease from last week [5]. - PP production is 1 (the data may have an error here), a 30.47% increase; PE production is 730,000 tons, a 0.54% decrease. HDPE production is 320,000 tons, a 0.41% decrease [5]. - PP operating rate is 23.7%, a 9.18% increase from last week; PE operating rate is 87.95%, a 0.54% decrease from last week [5]. - PP factory inventory is 53,691 tons, a 153.44% increase from last week; PE social inventory is 779,500 tons, a 0.41% increase from last week. HDPE social inventory is 20,900 tons, a 19.22% increase from last week [5]. - PP warehouse receipts are 21,531 lots, a 24.50% increase from last week; PE warehouse receipts are 9,428 lots, unchanged from last week [5].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - For plastics, there is a game between high supply and cost support, and it is expected to fluctuate. In February, the maintenance intensity was insufficient, with the daily average output expected to increase by 13.2% year - on - year to 104,000 tons. In March, the planned new maintenance devices are only 1 million tons, and the supply - side pressure remains. The post - holiday inventory of the two major oil companies has risen to a neutral level, and the recovery of the agricultural film market is slow. If the recovery of the plastic film in March falls short of expectations, the industry chain may face de - stocking pressure. The supply - demand pattern is weak, and the basis has fallen to a low level, with limited upward drivers. However, the strong oil price provides cost support at the bottom. It is recommended to operate with a fluctuating mindset [4]. - For PP, the devices maintain a high level of maintenance, and there is still support at the bottom of the market. In February, the supply maintenance intensity continued to exceed expectations, with the daily average output expected to increase by 4.2% year - on - year to 110,000 tons. According to the maintenance plan, the newly planned maintenance devices in March will be 3.28 million tons. Considering that there are no new device production plans before May, the industry chain's explicit inventory and basis are at a neutral level, and there are no prominent supply - demand contradictions at present. If the demand gradually recovers, the market is expected to stop falling and stabilize. Overall, due to the strong oil price and the lack of prominent fundamental supply - demand contradictions, it is advisable to be cautious about shorting. Attention should be paid to the price changes of propane and propylene at the cost end [8]. 3. Summary by Directory 3.1 Market Review - Plastics in February fluctuated weakly and broke through the previous low. It opened 15 points higher at 7029 at the beginning of the month, rebounded to the monthly high of 7086, and then weakened significantly. After the holiday, the inventory accumulation was in line with expectations, but the upstream maintenance was insufficient. It finally fell below the support level at the end of the month, reaching a one - month low of 6553, a decline of 8% from the high at the end of January. The monthly fluctuation range was between 6553 and 7086, with an amplitude of 533 points [3][13]. - PP in February fluctuated weakly but was significantly stronger than plastics. It opened higher at 6857 at the beginning of the month, rebounded to the monthly high of 6896, and then weakened. Before the holiday, it fluctuated within a narrow range, and on the last trading day before the holiday, it fell to the monthly low of 6552 following the oil price, a decline of 6% from the high at the end of January. After the holiday, due to high - level upstream maintenance, it was strong in the olefin sector, and the LP05 spread once fell to - 28 at the end of the month. The monthly fluctuation range was between 6552 and 6896, with an amplitude of 344 points [7][13]. 3.2 Market Indicators - **Funds**: As of Thursday this week, the main contract position of PE was 550,000 lots, reaching the highest level in the same period [19]. - **Basis**: As of Thursday this week, the main - contract basis of plastics was - 128 yuan/ton, at an extremely low level; the main - contract spread of PP was - 40 yuan/ton, at a neutral level in the same period [22]. - **Monthly Spread**: As of Thursday this week, the L59 spread was - 74 yuan/ton, hitting a new low this year; the PP59 spread was - 17 yuan/ton [25]. - **Warehouse Receipts**: As of Friday this week, the number of warehouse receipts for L and PP were 9,428 and 21,679 lots respectively [28]. - **Cross - Variety**: As of Thursday this week, the LP05 spread was 179 yuan/ton, and the MTO05 spread was - 186 yuan/ton [31]. 3.3 Supply and Demand Analysis - **Supply** - **PE**: This week's PE output was 730,000 tons, with a capacity utilization rate of 88% and a cumulative year - on - year increase of 11%. In March, only Zhejiang Petrochemical, Zhong'an United, and Lanzhou Petrochemical, with a total capacity of 1 million tons, are planned for maintenance, and the overall maintenance intensity is insufficient, so the supply side is under pressure [49]. - **PP**: This week's PP output was 770,000 tons, with a capacity utilization rate of 76% and a cumulative year - on - year output increase of 5.3%. In March, the planned new maintenance devices will be 3.28 million tons, and the upstream supply is expected to maintain a high level of maintenance [51]. - **Imports and Exports** - **PE**: In 2025, the average monthly import volume of PE was 1.12 million tons (a year - on - year decrease of 3.2%); the import volume in December was 1.32 million tons (a month - on - month increase of 25% and a year - on - year decrease of 4.6%), reaching the highest level in 2025. The cumulative year - on - year changes of LL, LD, and HE were - 8.8%, 8.5%, and - 4.2% respectively. The average monthly export volume of PE in 2025 was 90,000 tons (a year - on - year increase of 29%) [54]. - **PP**: In 2025, the average monthly export volume of PP was 260,000 tons (a year - on - year increase of 29%), and the single - month export volume in December was 270,000 tons. The average monthly import volume was 280,000 tons (a year - on - year decrease of 8.3%), and the import volume in December was 330,000 tons, the highest in the whole year [55][56]. - **Downstream** - **PE**: The downstream start - up rate of PE has declined, and the start - up rate of the agricultural film industry is at a low level in the same period [57]. - **PP**: The downstream start - up rate of PP has declined [61]. - **Exports**: In 2025, the average monthly export value of plastics and products was 11.8 billion US dollars (a year - on - year increase of 0.4%), and the proportion of exports to the United States was 14% [67]. - **Inventory** - **Commercial Inventory**: This week, the commercial inventory of PE was 1.22 million tons, slightly below the neutral level in the same period; the commercial inventory of PP was 1.08 million tons, at a high level in the same period [69]. - **Petrochemical Inventory**: As of Thursday this week, the petrochemical inventory of polyolefins was 870,000 tons [71]. 3.4 Balance Sheet - **Annual Balance Sheet**: The report provides the annual supply - demand balance sheets of PE and PP from 2014 to 2026E, including data on capacity, output, import volume, export volume, apparent consumption, output year - on - year growth rate, apparent demand year - on - year growth rate, and capacity utilization rate [74]. - **Monthly Balance Sheet in 2026**: It provides the monthly supply - demand balance sheets of PE and PP in 2026, including effective capacity, capacity utilization rate, monthly output, import volume, export volume, apparent consumption, cumulative output year - on - year growth rate, and cumulative apparent consumption year - on - year growth rate [75][76]. - **Balance Sheet by Contract**: It provides the supply - demand balance sheet forecasts for PE and PP contracts such as 05, 09, and 01, including data on output, import volume, total supply, month - on - month and year - on - year changes, export volume, apparent demand, and inventory month - on - month changes [77]. 3.5 Strategy - **Plastics** - **Unilateral**: Operate with a fluctuating mindset. Pay attention to the range of 6400 - 6800 yuan/ton for L2605 [6]. - **Arbitrage**: Hold the short position of the LP05 spread [6]. - **Hedging**: Since the basis is at a low level, sell - hedge at high prices [6]. - **PP** - **Unilateral**: Be cautious about shorting. Pay attention to the range of 6450 - 6850 yuan/ton for PP2605 [9]. - **Arbitrage**: Hold the short position of the LP05 spread [9]. - **Hedging**: Since the basis is at a neutral level, operate with a fluctuating mindset [9].