Supply and Demand - Construction starts are showing marginal improvement, with recent weeks indicating a recovery in asphalt plant operating rates and cement dispatch rates, although they remain at historical lows[2] - Industrial production remains at a historically high level, with PX operating rates maintaining high levels while PTA rates are at historical lows[2] - Demand in construction remains weak, with negative year-on-year growth in construction demand and a decline in automobile sales[2] Commodity Prices - Gold prices have significantly increased, while oil prices are fluctuating weakly; copper and aluminum prices are also on the rise[3] - Domestic industrial prices are experiencing limited support from demand, leading to overall price fluctuations[3] Real Estate Market - New housing transactions have turned positive year-on-year, with a 23% decrease in average transaction area in major cities compared to the previous two weeks, but still showing improvement compared to 2023 and 2024[4] - Second-hand housing transactions are showing marginal improvement, with transaction volumes in Beijing, Shanghai, and Shenzhen increasing year-on-year by -2%, +26%, and +23% respectively[4] Exports - Exports for the first 14 days of September are estimated to have increased by approximately 4.1% year-on-year, supported by high-frequency port data[5] Liquidity - Recent weeks have seen fluctuations in funding rates, with R007 at 1.47% and DR007 at 1.46% as of September 14[72] - The central bank has conducted a net withdrawal of 24,315 billion yuan through reverse repos in recent weeks[72] Risk Factors - Potential risks include unexpected fluctuations in commodity prices and stronger-than-expected policy measures[77]

Group 1: Economic Fundamentals - The foundation of macroeconomics revolves around the flow of money, defined as a special commodity that serves as a general equivalent in trade, backed by national credibility [3][4] - The value of currency is anchored by the productivity it represents, and excessive issuance can lead to inflation, while insufficient issuance can cause deflation [3][4] - Countries often borrow to stimulate development, either through external loans or domestic debt issuance, forming the basis of modern finance [6] Group 2: Industrial Development - Industrialization is a complex process requiring significant capital and skilled labor, with successful examples including the UK, US, and Japan [8][12] - Real estate plays a crucial role in accelerating urbanization and economic growth, with the potential to drive GDP growth significantly [10][11] - The transition from light industry to heavy manufacturing is essential for a country's industrialization, with the automotive sector being a key focus for China [15][16] Group 3: Service Sector and Tourism - The service sector, including tourism, is projected to become increasingly important as industrialization matures, offering high returns on investment with lower capital requirements [16][24] - The tourism industry can significantly boost consumption and GDP, with a multiplier effect where tourism revenue can generate much higher economic activity [24][26] - To succeed in the tourism sector, companies must focus on cost control and continuous innovation to adapt to changing consumer preferences [27]

Group 1: US Economic Overview - The US economy continues to expand, with the Atlanta Fed's GDPNOW model predicting a Q3 growth rate of 3.1%, driven by stable consumer momentum and strong investment in technology [2] - Jobless claims have increased, with initial claims rising by 27,000 to 263,000, the highest in four years, indicating a cooling labor market [2] - Inflation remains manageable, with August PPI unexpectedly dropping to 2.6%, significantly below the expected 3.3%, while CPI slightly increased to 2.9% [2] Group 2: Monetary Policy and Market Reactions - The US is expected to restart monetary easing, with market participants fully pricing in three rate cuts this year, leading to a decline in private sector financing costs [3] - The 30-year mortgage rate fell by 15 basis points to 6.25%, and the 10-year AAA corporate bond yield decreased by 8 basis points to 4.26% [3] - US stock markets rose, influenced by the Fed's dovish outlook, although valuations are considered high, with future gains expected to come from corporate earnings growth rather than valuation expansion [3] Group 3: Bond Market Dynamics - Short-term interest rates are expected to decline as the easing cycle begins, but the long-term rates may remain volatile due to economic resilience and inflationary pressures [4] - The 10-year US Treasury yield is projected to average 4.3% this year and 4.2% next year, with a fluctuation range of 3.5% to 5% [4] Group 4: Currency and Commodity Outlook - The US dollar is anticipated to remain in a range-bound trading pattern, with a fluctuation range of 95 to 103, due to the dual support of easing monetary policy and fiscal expansion [5] - The Chinese yuan is expected to maintain a strong stance in the short term, although potential fluctuations may arise from changes in the A-share market and US rate cut expectations [5] - Gold is viewed positively, benefiting from the Fed's easing cycle and ongoing global central bank purchases [5] Group 5: China Economic Insights - China's economy is showing signs of slowdown, with external demand weakening and internal demand potentially continuing to decline [7] - August macro data indicates a drop in export and import growth rates, with exports to the US declining by 33.1% [7] - The government is implementing policies to stabilize growth in key industries, including the automotive sector, with a target of approximately 3% growth in overall vehicle sales by 2025 [9] Group 6: Market Strategy and Recommendations - The current market sentiment favors equities over bonds, with a recommendation to hold short to medium-duration bonds while being cautious with long-duration investments [12] - The A-share market has shown resilience, with the Shanghai Composite Index rising 1.52%, supported by liquidity and favorable policies [13] - Investment strategies suggest maintaining dividend stocks as a stable base, while allocating to growth sectors like technology and healthcare for potential gains [14]

Domestic Macro Viewpoints - In August, both domestic and external demand weakened, leading to a supply-demand imbalance where supply remains strong while demand is weak[1] - Investment has shown negative year-on-year growth for two consecutive months, and retail sales growth has been declining since May[1] - GDP growth is expected to remain around 5% in Q3, with macro policies likely to be more stable due to stronger economic data[1] - The divergence between supply and demand is unsustainable; if demand does not strengthen, supply will follow demand downwards, increasing pressure on Q4 GDP[1] Overseas Macro Viewpoints - The CPI released in August slightly exceeded expectations, but inflation pressure from tariffs is easing, leading to a forecasted 25bps rate cut in September[2] - The upcoming appointment of the next Federal Reserve Chair by Trump may influence market expectations for rate cuts in 2026, resulting in further dollar liquidity easing[2] Equity Market Viewpoints - The market has rebounded as expected, with the Shanghai Composite Index slightly breaking previous highs, indicating a potential for further upward movement[3] - Internal industry trends are positive, but short-term events like U.S. rate cuts and geopolitical tensions may affect A-share market sentiment[3] - The market is expected to remain in a structural bull market, driven mainly by technology and finance sectors, with room for upward movement despite potential adjustments[3] Bond Market Viewpoints - Since September, interest rates have risen again, with the 10-year rate surpassing 1.80% and the 30-year rate above 2.10%[5] - There are emerging trading opportunities as the market anticipates a "restart of government bond trading," driven by low loan demand and high government bond issuance[5] - The expectation of stable funding rates and potential for interest rate compression may attract funds to bet on interest rate recovery[5]

Economic Overview - August economic data shows continued slowdown, with six major indicators (exports, industrial output, services, retail sales, investment, and real estate sales) all below previous values. GDP estimates based on production and expenditure methods are approximately 4.67%, lower than July's 4.91% [1][7][8] Industrial Performance - Industrial added value in August grew by 5.2%, down from 5.7% in the previous month. The slowdown in export delivery value, which saw a year-on-year decline of 0.4%, is a significant drag on industrial performance [2][12] - High-tech industries continue to show resilience, with added value increasing by 9.3%. Key products like new energy vehicles and solar cells maintain high growth rates [2][13] Retail Sales - Retail sales growth in August was 3.4%, a decrease from 3.7% in July. Notable trends include accelerated rural consumption and a slowdown in urban consumption [3][14] - Categories with relatively high growth include sports and entertainment, jewelry, and home appliances, driven by service consumption trends and policy benefits [3][15] Fixed Asset Investment - Fixed asset investment saw a significant decline, with cumulative year-on-year growth dropping from 1.6% to 0.5%, and a monthly decline of 6.3%, worsening from -5.2% previously. Real estate, manufacturing, and infrastructure investments are all contributing to this downturn [4][16] - Manufacturing investment showed a year-on-year decline of 1.3%, indicating a slowdown in equipment updates [4][16] Real Estate Market - The real estate sector is experiencing a downward trend, with sales area, new starts, construction, and investment all showing increased year-on-year declines. The new housing price index in 70 major cities fell by 0.3% month-on-month, consistent with previous values [5][20][21] - Real estate investment in August saw a year-on-year decline of 19.4%, with new construction area down by 20.3% [5][20] Economic Phases - The economic rhythm of this year can be divided into three phases: strong growth in Q1 driven by exports and real estate, a resilient Q2 despite external disturbances, and a noticeable slowdown in July and August [5][22] - If Q3 GDP is estimated at 4.8%, achieving the annual target of 5.0% will require a Q4 growth rate of approximately 4.64% [5][22] Policy Outlook - Current macroeconomic policy is in the second phase, focusing on stabilizing cash flow and profit statements. The government is expected to continue its counter-cyclical adjustments following the release of August economic data [6][23]

Economic Overview - In August, the industrial added value of enterprises above designated size increased by 5.2% year-on-year, with a month-on-month growth of 0.37% [1][3] - From January to August, the industrial added value grew by 6.2% year-on-year [1][3] Industrial Production - The mining industry saw a year-on-year increase of 5.1%, manufacturing grew by 5.7%, and the electricity, heat, gas, and water production and supply industries increased by 2.4% [3] - Equipment manufacturing and high-tech manufacturing sectors performed well, with increases of 8.1% and 9.3% respectively, outpacing the overall industrial growth [3] Service Sector - The service sector production index rose by 5.6% year-on-year in August, with significant growth in information transmission, software, and financial services [4] - The business activity index for the service sector was at 50.5, indicating stable growth [4] Retail Sales - The total retail sales of consumer goods reached 39,668 billion yuan in August, a year-on-year increase of 3.4% [2][5] - Online retail sales amounted to 99,828 billion yuan from January to August, growing by 9.6% [5] Fixed Asset Investment - Fixed asset investment (excluding rural households) reached 326,111 billion yuan from January to August, with a year-on-year growth of 0.5% [6][7] - Manufacturing investment grew by 5.1%, while real estate development investment declined by 12.9% [7] Trade Performance - In August, the total value of goods imports and exports was 38,744 billion yuan, with exports growing by 4.8% and imports by 1.7% [8] - From January to August, the total trade value was 295,696 billion yuan, reflecting a year-on-year increase of 3.5% [8] Employment Situation - The urban surveyed unemployment rate was 5.3% in August, showing a slight increase from the previous month [9] - The average working hours for employees were reported at 48.5 hours per week [9] Price Trends - The Consumer Price Index (CPI) decreased by 0.4% year-on-year in August, while the core CPI rose by 0.9% [10] - The Producer Price Index (PPI) for industrial producers fell by 2.9% year-on-year, with a narrowing decline compared to the previous month [10]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report In August 2025, under the strong leadership of the Party Central Committee with Comrade Xi Jinping as the core, the national economy maintained a generally stable and progressive development trend. Production and demand were basically stable, employment and prices were generally stable, and new driving forces were cultivated and strengthened [3]. 3. Summary by Relevant Catalogs Industry - In August, the added value of industrial enterprises above designated size increased by 5.2% year - on - year and 0.37% month - on - month. The added value of the mining industry, manufacturing, and the production and supply of electricity, heat, gas, and water increased by 5.1%, 5.7%, and 2.4% year - on - year respectively. The added value of the equipment manufacturing industry and high - tech manufacturing industry increased by 8.1% and 9.3% year - on - year respectively, faster than the overall industrial added value [3]. - From January to August, the added value of industrial enterprises above designated size increased by 6.2% year - on - year. In August, the manufacturing purchasing managers' index was 49.4%, up 0.1 percentage points from the previous month; the enterprise production and operation activity expectation index was 53.7%, up 1.1 percentage points [3]. - From January to July, the total profit of industrial enterprises above designated size was 40204 billion yuan, a year - on - year decrease of 1.7% [3]. Services - In August, the national service industry production index increased by 5.6% year - on - year. The production indexes of information transmission, software and information technology services, finance, and leasing and business services increased by 12.1%, 9.2%, and 7.4% year - on - year respectively, faster than the service industry production index [4]. - From January to August, the national service industry production index increased by 5.9% year - on - year. From January to July, the operating income of service enterprises above designated size increased by 7.4% year - on - year [4]. - In August, the service industry business activity index was 50.5%, up 0.5 percentage points from the previous month; the service industry business activity expectation index was 57.0%, up 0.4 percentage points. Some industries were in the high - level boom range [4]. Consumption - In August, the total retail sales of consumer goods were 39668 billion yuan, a year - on - year increase of 3.4% and a month - on - month increase of 0.17%. The retail sales of urban and rural consumer goods increased by 3.2% and 4.6% year - on - year respectively. The retail sales of goods and catering revenue increased by 3.6% and 2.1% respectively [5]. - From January to August, the total retail sales of consumer goods were 323906 billion yuan, a year - on - year increase of 4.6%. The national online retail sales were 99828 billion yuan, a year - on - year increase of 9.6%. The online retail sales of physical goods were 80964 billion yuan, a year - on - year increase of 6.4%, accounting for 25.0% of the total retail sales of consumer goods [5]. - From January to August, the service retail sales increased by 5.1% year - on - year, with relatively fast growth in cultural and sports leisure services, tourism consulting and leasing services, and transportation services [5]. Investment - From January to August, the national fixed - asset investment (excluding rural households) was 326111 billion yuan, a year - on - year increase of 0.5%. Excluding real estate development investment, it increased by 4.2%. Infrastructure investment increased by 2.0%, manufacturing investment increased by 5.1%, and real estate development investment decreased by 12.9% [6]. - The sales area of newly built commercial housing was 57304 million square meters, a year - on - year decrease of 4.7%; the sales volume was 55015 billion yuan, a year - on - year decrease of 7.3% [6]. - In August, fixed - asset investment (excluding rural households) decreased by 0.20% month - on - month [6]. Import and Export - In August, the total volume of goods imports and exports was 38744 billion yuan, a year - on - year increase of 3.5%. Exports were 23035 billion yuan, an increase of 4.8%; imports were 15709 billion yuan, an increase of 1.7% [7]. - From January to August, the total volume of goods imports and exports was 295696 billion yuan, a year - on - year increase of 3.5%. Exports were 176056 billion yuan, an increase of 6.9%; imports were 119640 billion yuan, a decrease of 1.2% [7]. - From January to August, general trade imports and exports increased by 2.2%, accounting for 63.9% of the total import and export volume. Imports and exports to countries along the Belt and Road increased by 5.4%. Private enterprise imports and exports increased by 7.4%, accounting for 57.1% of the total import and export volume, 2.1 percentage points higher than the previous year [7]. Price - In August, the national consumer price index (CPI) decreased by 0.4% year - on - year and remained flat month - on - month. The core CPI excluding food and energy prices increased by 0.9% year - on - year, with the growth rate expanding by 0.1 percentage points from the previous month [8]. - From January to August, the national consumer price index decreased by 0.1% year - on - year [8]. - In August, the ex - factory price of industrial producers decreased by 2.9% year - on - year, with the decline narrowing by 0.7 percentage points, and remained flat month - on - month; the purchase price of industrial producers decreased by 4.0% year - on - year, with the decline narrowing by 0.5 percentage points, and remained flat month - on - month [8]. Employment - From January to August, the average urban surveyed unemployment rate nationwide was 5.2%. In August, the urban surveyed unemployment rate was 5.3%, up 0.1 percentage points from the previous month, the same as the same month of the previous year [8]. - The surveyed unemployment rate of local household registration labor force was 5.4%; the surveyed unemployment rate of non - local household registration labor force was 5.0%, among which the surveyed unemployment rate of non - local agricultural household registration labor force was 4.7% [8]. - The surveyed unemployment rate in 31 large - scale cities was 5.3%, up 0.1 percentage points from the previous month and down 0.1 percentage points from the same month of the previous year. The average weekly working hours of enterprise employees nationwide were 48.5 hours [8].

Macro and Strategy Research - The US labor market shows signs of weakness, with August non-farm employment data falling short of expectations and previous months' figures revised downwards, indicating a potential deterioration trend [3][4] - In Europe, the European Central Bank remains confident about future inflation and economic growth, with market expectations for a rate cut before mid-2026 dropping below 50% [4] - Domestic exports in China have declined year-on-year due to high base effects from last year, but exports to non-US regions continue to perform better, which may influence future growth [4][7] - The PPI in China is expected to show a low recovery in September, while CPI growth is significantly affected by food and energy prices [4][7] Fixed Income Research - The yield curve has steepened, with the bond market under pressure due to a strong equity market and adjustments in redemption fees affecting market sentiment [8][9] - In the primary market, the issuance of interest rate bonds totaled 74, with a net financing amount of 45.2 billion yuan, indicating a gradual decrease in supply pressure [7][9] - The central bank's actions, including potential 14-day reverse repos, will be crucial in determining the liquidity situation in the market [9] Industry Research - Chinese pharmaceutical companies showcased impressive research results at the World Lung Cancer Conference (WCLC), highlighting the strength of domestic innovation [10][12] - Hengrui Medicine has signed a licensing agreement for the HRS-1893 project and has received drug registration approval, indicating its ongoing expansion efforts [11][12] - The overall performance of the pharmaceutical and biotechnology sector has been positive, with the industry index showing a 1.76% increase, outperforming other sectors [11][12] - The upcoming China Clinical Oncology Society (CSCO) annual meeting and the European Society for Medical Oncology (ESMO) conference are expected to provide further insights into the industry's development [12]

Report Overview - Report Title: Polyolefin Morning Report - Report Date: September 15, 2025 - Analyst: Jin Zebin from Dayue Futures Investment Consulting Department Industry Investment Rating - Not provided in the report Core Views - The manufacturing industry's prosperity has improved, with the official PMI at 49.4 in August, up 0.1 percentage points from the previous month, and the Caixin PMI at 50.4, up 0.6 percentage points from the previous month. China's export volume in August was $321.81 billion, a year-on-year increase of 4.4%, but a decline from July [4][7]. - Crude oil prices are fluctuating. Recent events such as Israel's attack on the capital of Qatar have led to renewed turmoil in the Middle East geopolitical situation, and the US, Europe, etc., are planning secondary sanctions on Russian oil [4][7]. - The demand for agricultural films is gradually entering the peak season, but overall demand is still weaker than in previous years. The demand for other packaging films has rebounded [4]. - The downstream demand for pipes, plastic weaving, etc., has improved [7]. - The LLDPE and PP futures main contracts are expected to fluctuate today [4][7]. Summary by Category LLDPE - **Fundamentals**: Overall neutral. The manufacturing industry's prosperity has improved, and the demand for agricultural films is entering the peak season, but overall demand is still weak. The current LLDPE delivery spot price is 7,180 (-20) [4]. - **Basis**: The basis of the LLDPE 2601 contract is 11, with a premium ratio of 0.2%, neutral [4]. - **Inventory**: PE comprehensive inventory is 545,000 tons (+35,000), bearish [4]. - **Market**: The 20-day moving average of the LLDPE main contract is downward, and the closing price is below the 20-day line, bearish [4]. - **Main Position**: The net long position of the LLDPE main contract is increasing, bullish [4]. - **Likely Factors**: Geopolitical turmoil provides cost support, and demand is gradually entering the peak season; however, the year-on-year demand is still weak [5]. PP - **Fundamentals**: Overall neutral. The manufacturing industry's prosperity has improved, and the downstream demand for pipes, plastic weaving, etc., has improved. The current PP delivery spot price is 6,980 (0) [7]. - **Basis**: The basis of the PP 2601 contract is 67, with a premium ratio of 1.0%, bullish [7]. - **Inventory**: PP comprehensive inventory is 575,000 tons (-8,000), bearish [7]. - **Market**: The 20-day moving average of the PP main contract is downward, and the closing price is below the 20-day line, bearish [7]. - **Main Position**: The net short position of the PP main contract is decreasing, bearish [7]. - **Likely Factors**: Geopolitical turmoil provides cost support, and demand is gradually entering the peak season; however, the year-on-year demand is still weak [8]. Supply and Demand Balance Sheets - **Polyethylene**: From 2018 - 2024, the production capacity, output, and apparent consumption of polyethylene generally showed an upward trend. The import dependence decreased from 46.3% in 2018 to 31.1% in 2023. The expected production capacity in 2025 is 4,319.5 [15]. - **Polypropylene**: From 2018 - 2024, the production capacity, output, and apparent consumption of polypropylene also generally showed an upward trend. The import dependence decreased from 18.6% in 2018 to 8.4% in 2023. The expected production capacity in 2025 is 4,906 [17].

Economic Indicators - China's August industrial production increased 52% year-over-year, below the expected 57% [1] - August retail sales increased 34% year-over-year, also below the expected 39% [1] - The surveyed urban unemployment rate in August was 53%, higher than the expected 52% [1] - Fixed asset investment in urban areas increased 05% year-over-year from January to August, below the expected 14% [1]