【Analysis of market conditions】：
First of all, the biggest impact of dual control mainly comes from the contraction expectations on the supply side. The high premium of futures has blocked a large number of positions to buy spot and short futures, which has further boosted the tightness of market sources. However, the downstream has a greater resistance to high market prices, and traders’ funds are in trouble. At the moment, the market may usher in a phased adjustment after the short position is closed on the trade side.
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 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.