Macroeconomics

1. [Reverse Repo] The People's Bank of China (PBOC) announced that it would conduct a 500-billion-yuan Medium-term Lending Facility (MLF) operation on August 25. The operation will feature a fixed volume and a multiple-price bidding mechanism (where winning bids are awarded at their respective bid rates), with a maturity of one year. Given that 600 billion RMB in MLF loans are maturing in August, the central bank will effectively withdraw a net 100 billion RMB from the market through this operation. The PBOC also announced plans to conduct overnight reverse repo operations from August 27 to September 1, utilizing fixed-rate, quantity-based bidding, with a daily volume cap of 600 billion RMB.

2. [US-Canada Tariffs] Trump announced that, effective January 1, 2027, the US will raise tariffs to 50% on all Canadian automobiles, trucks, auto parts, and steel; products manufactured in the US will remain tariff-free. Trump stated that the US "doesn't need Canada; Canada needs the US," noting that 95% of Canada's business involves the US, whereas the situation for the US is "exactly the opposite."

Plastics and Rubber

1. [Tires] The second environmental impact assessment (EIA) public notice for Lunsheng Tire’s high-end aviation radial tire project has been completed, and the project is entering the substantive construction phase. Located in the High-tech Zone of Wei County, Hebei Province, the project covers an area of ​​165.84 mu with a total investment of 550 million RMB. It will be built in two phases: Phase I will have a capacity of 13.2 million units, and Phase II will reach 22 million units. Construction is scheduled to begin in November 2026. The project aims to diversify the aviation tire product range and improve supporting capabilities for drones.

2. [PS] Lianyungang Petrochemical’s PS facility comprises four production lines with a total annual capacity of 400,000 tons. One GPPS (general-purpose polystyrene) line was shut down in early August; currently, operations involve two GPPS lines and one modified PS line. The ex-factory reference price for STL 525 was raised, increasing by 100 RMB/ton to 9,450 RMB/ton on August 24. Traders are adjusting prices in line with market trends, and sales performance remains satisfactory.

3. [ABS] Lihuayi Lijin’s ABS facility has two production lines with a combined annual capacity of 400,000 tons. Currently, the M347 line is operating at 50% load, while the AG120 line remains shut down.

4. [Natural Rubber] On August 24, the natural rubber market in the Qingdao region saw prices rise. Spot traders increased their offers by 50–150 RMB/ton. Mainstream quotes for 2024-production Yunbao/Guangkeng/Haibao rubber ranged from 17,600 to 17,750 RMB/ton; 2025-production Yunbao/Guangkeng/Haibao ranged from 17,700 to 17,900 RMB/ton; and Vietnamese 3L rubber ranged from 18,650 to 18,800 RMB/ton.

5. [Natural Rubber] On August 24, prices for natural rubber raw materials in Thai production regions saw a slight increase: Ribbed Smoked Sheets (RSS) were quoted at 85.70 THB/kg (up 0.20 THB/kg); field latex was quoted at 76.50 THB/kg (up 1.00 THB/kg); and cup lump was quoted at 70.00 THB/kg (up 0.50 THB/kg).

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