SunSirs: Plastics and Rubber Industries Bulk Commodity Intelligence (February 27, 2026)

Macroeconomics

1. [Foreign Exchange] The People's Bank of China announced that, effective March 2, 2026, the foreign exchange risk reserve ratio for forward foreign exchange sales will be lowered from 20% to 0 to promote the development of the foreign exchange market and support enterprises in managing exchange rate risks. The central bank will continue to guide financial institutions to optimize exchange rate hedging services for enterprises and maintain the RMB exchange rate basically stable at a reasonable and balanced level.

2. [Bonds] According to publicly released bond issuance information from local finance departments, as of February 25, the issuance scale of local government bonds nationwide has exceeded 2 trillion RMB. Therefore, the issuance scale of local government bonds in the first two months of this year (approximately 2.28 trillion RMB) is expected to increase by 22% compared to the same period last year.

3. [Federal Reserve] Federal Reserve Governor Milan reiterated that despite improvements in the labor market, a 100 basis point rate cut is still expected in 2026, and he favors acting sooner rather than later.

4. [Bank of Japan] Bank of Japan Governor Kazuo Ueda stated that the central bank will carefully study the data at its March and April meetings to decide whether to raise interest rates, leaving open the possibility of a near-term rate hike. If Japan makes progress in achieving its economic and price forecasts, the central bank will continue to raise interest rates.

Plastics and Rubber

1. [PS] Shandong Yuhuang's PS plant, with a total capacity of 200,000 tons/year, is currently shut down. The ex-factory reference price for ordinary EPS has increased by 100 RMB to 8,500 RMB/ton, and the ex-factory reference price for flame-retardant EPS has increased by 100 RMB to 8,700 RMB/ton. Actual transaction prices are negotiable.

2. [BR] On February 26th, the butadiene rubber market in East China saw a slight decline, with traders lowering their offers by 50-100 RMB/ton. Currently, the mainstream price for butadiene rubber from Daqing, Yangzi, and Qilu is 13,100-13,300 RMB/ton; some private brands are quoting around 12,850-13,050 RMB/ton.

3. [Natural Rubber] On February 26, the Shanghai natural rubber market saw a decline in prices, with spot traders lowering their offers by 50-150 RMB/ton. The mainstream price for 2024 Yunbao/Guangken rubber was 16,900-17,050 RMB/ton; the mainstream price for 2024 Haibao rubber was 16,950-17,150 RMB/ton; and the mainstream price for Vietnam 3L rubber was 17,050-17,250 RMB/ton.

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