【Analysis of market conditions】：
First of all, under the background of stable overall market demand but limited downstream profits, it is temporarily difficult to continue to rise, and it may still be a shocking market in the short term. But we should also pay attention to the spread between the recent months and the far months has continued to be strong, reaching near the highs in the past year. This is an important signal of the shortage of goods in the market. Therefore, it is no longer suitable for PE to trade with a bearish mindset, and the worst in the market will be a shocking market;
Second, in the context of skyrocketing ocean freight and shortage of containers, there will always be a gap at the PE import side, which offsets the pressure of its capacity expansion, and the shortage of goods in the market results in a strong PE basis and spread. At the same time, the supply-side inventory is low. According to our actual research, although the downstream demand is slightly under pressure, it has been stocking at a low level. Therefore, after experiencing supply expansion expectations in the third quarter, the market is still low in inventory, which means that the difficulty of falling has become a market consensus. This will further promote the enthusiasm for low-price stocking in the downstream. The subsequent expansion of transactions and other factors will be the spark that ignites the market.
Third, fiscal easing, monetary easing, and inflation are major trends, and there should not be too much hesitation. We need to see that the epidemic is there, and fiscal easing and monetary easing are there. The fiscal contraction in the first half of the year was affected by the previous strong inflation expectations. With the re-emergence of deflation expectations, fiscal easing in the fourth quarter will continue in order to prevent economic stalls, resulting in a sharp increase in commodity prices in the fourth quarter.