Macroeconomics

1. [LPR] Authorized by the People's Bank of China, the National Interbank Funding Center announced that on July 20, 2026, the Loan Prime Rates (LPR) stood at 3.00% for the one-year tenor and 3.50% for the tenor of over five years; both rates remained unchanged from the previous month. The LPR has remained unchanged for 14 consecutive months.

2. [Carbon Emissions] The European Commission has proposed amendments to the EU Emissions Trading System (ETS) to alleviate the burden on businesses during the decarbonization process while ensuring the EU meets its 2040 climate targets. Under the proposal, the EU will revise the "linear reduction factor"—the rate at which the annual cap on total carbon emissions decreases. This factor will be lowered to 3.7% for the 2031-2035 period and adjusted to 1.7% for the 2036-2040 period, resulting in a more gradual pace of emission reductions. The current factor is 4.3%, with a planned rate of 4.4% for the 2028-2030 period.

Chemicals

1. [Batteries] Effective September 1, 2026, a consumption tax at a rate of 2% shall be levied on mercury-free primary batteries, nickel-metal hydride (Ni-MH) rechargeable batteries, primary lithium batteries, lithium-ion rechargeable batteries, and all-vanadium redox flow batteries; effective September 1, 2027, the consumption tax rate for the aforementioned battery products shall be 4%. Effective April 1, 2027, a consumption tax at a rate of 2% shall be levied on photovoltaic cells (also known as solar cells); effective April 1, 2028, the consumption tax rate for photovoltaic cells shall be 4%.

2. [Lithium Carbonate] According to reports, Zimbabwe's Minister of Mines, Zhemu Soda, stated that the government has rejected industry requests to postpone—until at least March—the ban on lithium concentrate exports originally scheduled to take effect next January.

3. [Lithium Carbonate] Three lithium salt plants under Jiangxi Jiuling Lithium Industry have simultaneously suspended production for maintenance, with an estimated impact of 4,000 tonnes on lithium carbonate production capacity:

Yifeng Jiuling Plant: Due to the combined impact of emergency repairs on Roasting Kiln 1 and upgrade modifications to Roasting Kiln 2, the entire plant has suspended production from July 16 to August 9;

Fengcheng Jiuling Plant: Maintenance for a malfunctioning acidification kiln is scheduled from July 13 to July 30; the spodumene production line will also halt operations during this period, resuming after successful commissioning;

Feiyu New Energy Plant: Modifications to the roasting kiln are planned from late July to August 15; specific start and completion dates will be announced separately, with relevant departments making advance preparations.

4. [BDO] Xinjiang Shuguang Lvhua’s 100,000-ton/year BDO unit was shut down on June 9; a restart is tentatively scheduled for early August.

5. [Caustic Soda] Last week (July 10-16), the average capacity utilization rate among sampled Chinese caustic soda enterprises (with capacities of 100,000 tons or more) was 77.8%, down 1.8% week-on-week.

6. [Aniline] On July 20, Shandong Jinling’s aniline unit was operating stably. The company raised its aniline price by 200 RMB/ton; the latest price is set at 11,100 RMB/ton (spot payment), with specific transaction terms negotiable.

7. [Potassium Nitrate] On July 20, Shifang Aoxin Chemical Co., Ltd. quoted industrial-grade potassium nitrate at an ex-factory price of 5,000 RMB/ton, an increase of 100 RMB/ton from the previous quote.

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