Macroeconomics

1. [Monetary Policy] The central bank released the Report on Monetary Policy Implementation in China for the second quarter of 2026. The report proposes the comprehensive use and timely adjustment of monetary policy tools to maintain ample liquidity and relatively loose social financing conditions; the timely planning and introduction of practical, effective incremental policies to step up counter-cyclical adjustments; and the expansion of the central bank's macro-prudential and financial stability functions, alongside the innovation of financial instruments, to safeguard the stable operation of financial markets.

2. [Reverse Repo] To better align with the banking system's short-term liquidity needs, the People's Bank of China will conduct overnight reverse repo operations on August 14 and from August 17 to August 19. These operations will utilize fixed-rate, quantity-based tendering, with a daily volume not exceeding 600 billion RMB.

3. [US CPI] Data released by the US Department of Labor shows that the year-on-year growth rate of the US non-seasonally adjusted CPI slowed to 3.4% in July, while core CPI growth slowed to 2.5%. On a month-on-month basis, the seasonally adjusted CPI rose by 0.1% and core CPI by 0.2%, both in line with market expectations. Following the data release, traders' expectations regarding a Federal Reserve rate hike in September remained largely stable.

Plastics and Rubber

1. [PE] On August 12, the status of Hainan Refining & Chemical’s PE units was as follows: the full-density unit was producing grade 7042, while the HDPE unit was shut down.

2. [PBR] TSRC-UBE (Nantong)’s 72,000-ton/year cobalt-catalyzed high-cis polybutadiene rubber (PBR) unit is currently operating normally; a maintenance shutdown is scheduled to begin in late August 2026.

3. [Natural Rubber] On August 12, natural rubber market prices in the Qingdao region rose, with traders increasing their offers by 100–250 RMB/tonne. Prevailing quotes for 2024-production Yunbao/Guangkeng/Haibao rubber ranged from 16,950 to 17,150 RMB/tonne; for 2025-production Yunbao/Guangkeng/Haibao, quotes ranged from 17,150 to 17,300 RMB/tonne; and for Vietnam 3L, quotes ranged from 18,150 to 18,350 RMB/tonne.

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