On Feb 24th, the first working day after the holiday, PP futures opened higher and remained in positive territory-quite a festive start, considering the significant decline in futures before the holiday and concerns that the downturn might continue afterward.

However, as expected, a nine-day holiday can easily bring about uncertainties. Over the break, geopolitical risk factors came into play again, driving international oil prices sharply higher. WTI crude futures rose from $62.89/barrel before the holiday to $66.31/barrel, while Brent crude futures climbed from $67.75/barrel to $71.49/barrel. CFR Japan naphtha prices also increased from $594/mt to $614.25/mt. In RMB terms, this translates to a cost increase of approximately 230yuan/mt for PP.

As for whether this momentum can be sustained or even strengthened-it might be wise to hold off on judgment for now. After all, some market players have not resumed work, and market information remains relatively limited.

For the moment, the only news circulating is related to inventory levels.

Currently, petrochemical inventories stand at 940kt, an increase of 480kt compared to before the holiday. Looking at historical data, the inventory build-up in 2026 is not significantly different from that in 2025. However, the data suggests that petrochemical inventories in both 2025 and 2026 exceeded expectations, considering that-excluding the plants shut for maintenance-the effective PP capacity within the Sinopec and PetroChina is approximately 14.8 million tons per year. Since 2024, inventory levels on the first day after the holiday have typically marked the peak for the year, and 2026 is expected to follow the same pattern, though this year's level is lower than in previous years.

As for the resumption of downstream operations, further verification is needed.

In summary, the stage for a price rally has already been set. Now it depends on traders and the downstream sector. However, downstream side should not be viewed too optimistically. Based on past patterns, full-scale resumption typically doesn't occur until around the Lantern Festival-meaning March. So, for the final few days of February, simply avoiding a price decline might already be considered a decent outcome.