Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Views of the Report - The essence of this conflict is the concentrated outbreak of the reconstruction of the regional power pattern under the background of the contraction of US hegemony in the Middle East. The probability of a full - scale large - scale war is extremely low. Trump's statement of "the war is basically over" is an expected management action forced by domestic political red lines, not a substantial cease - fire. The short - term conflict is unlikely to cool down completely, and the benchmark scenario is "verbal cease - fire expectation first → short - term expectation deviates from reality → finally enter a long - term low - intensity confrontation pattern" [2]. - The impact of this conflict on the global economy and asset markets is significantly lower than the two comprehensive oil crises in the 1970s. The core constraints come from the domestic political and economic red lines in the US, the improvement of the global energy supply hedging mechanism, and the fundamental reversal of the US energy status. However, the market's linear pricing of "war ends → supply risk is removed" has obvious deviations, and there is a risk of expectation - correction fluctuations in short - term asset prices [2]. - The market has priced in the benchmark scenario of short - term local conflicts and over - priced the "war - ending expectation brought by Trump's statement", but may not have fully priced in two core risks: the risk of a second spike in oil prices due to the deviation between the cease - fire expectation and the reality of navigation/supply restoration, and the tail risk of a full - scale escalation of the conflict. There is a callback pressure on asset prices after a short - term passive rise [2]. Group 3: Summary by Relevant Catalogs 1. The Essence of the Current Conflict and the Demands and Hard Constraints of the Participants - **Iran**: The death of Iran's Supreme Leader Khamenei has led to a decentralized power and combat structure, making traditional military means ineffective. The new supreme leader lacks the authority of Khamenei, and different factions within the Revolutionary Guards have complex competition relationships. This decentralized structure challenges the US strategy, and there is a risk of Iran's asymmetric counter - attack [12][14][15]. - **US**: The core constraint of the Trump administration is the domestic gasoline price red line and the political pressure of the mid - term elections. The US has no domestic public opinion basis and financial ability for a full - scale Middle - East war. Trump's statement of "the war is basically over" is an expected management action forced by domestic political red lines, and his statement is changeable, which will be a major source of market fluctuations [16][19][23]. - **Israel**: Israel's core demand is to completely eliminate Iran's nuclear threat and regional military threat, and there are no rigid constraints in terms of elections, oil prices, and public opinion. It has a strong motivation to continuously escalate the war, but its actions may be restricted by the US [24]. 2. Historical Lessons: A Review of Four Rounds of Oil Crises - **Core Features and Asset Performance in Previous Oil Crises**: Six core laws of asset pricing are summarized, including the relationship between oil price increases and supply interruptions, the performance of gold, stocks, bonds, and the performance of energy sectors [26]. - **Core Similarities and Differences between the Current Conflict and Historical Oil Crises**: The core conduction logic is the same as historical oil crises, but there are five fundamental differences, which determine that the upper limit of the impact on the global economy and asset markets is significantly lower than the two comprehensive oil crises in the 1970s [28][29]. 3. Scenario Deduction of the Current Conflict - **Benchmark Scenario**: The conflict is unlikely to escalate into a large - scale ground war. It will go through three stages: the stage of expectation - reality deviation, the stage of diplomatic negotiation, and the stage of long - term low - intensity confrontation. Asset prices will follow the six asset - pricing laws, and there are risks such as Trump's statement reversal, passive - rise selling pressure, and navigation - repair disappointment [32][35][36]. - **Tail Extreme Risk Scenario**: The trigger premise is that Trump's cease - fire statement is not implemented, Israel unilaterally escalates the war, and Iran conducts asymmetric counter - attacks, leading to long - term interruption of oil supply. The war will go through three stages, and asset prices will follow the pricing laws of a comprehensive oil crisis, with risks such as the failure of Trump's statement, oil - price over - increase, and policy - tightening over - expectation [37][39][42]. - **Intermediate Transition Scenario**: Israel unilaterally promotes a small - scale escalation of the war, and the US refuses to be involved in a ground war. The conflict maintains a low - intensity mode, and asset price fluctuations are between the benchmark scenario and the tail extreme scenario, with risks such as ambiguous statements, losses in the volatile market, and policy swings [43][44]. 4. Global Core Risk Warnings - Trump's statement is changeable, which will cause extreme fluctuations in global asset prices [46]. - There is an extreme deviation between market expectations and reality, which will lead to significant expectation - correction in the market [46]. - Israel may take unilateral escalation actions, triggering the tail extreme scenario [46]. - Asset prices are over - adjusted and trading is irrational, with a high risk of losses from chasing rises and selling falls [46]. - The medium - and long - term pricing laws are invalid in the short - term trading stage [47]. 5. Comprehensive Judgment and Risk - Control - Oriented Strategy Recommendations - The probability of the current conflict escalating into a new round of oil crisis is low. The benchmark scenario is a long - term low - intensity confrontation pattern. In the short term, risk control should be the top priority, with strict control of positions, avoiding chasing rises and selling falls, and flexible position adjustment [48].

Report Industry Investment Rating - Not provided Core Viewpoints - Yesterday, oil prices fluctuated significantly. The morning saw a more than 30% increase, followed by a sharp decline in the afternoon. The turning point was mainly due to G7 countries considering releasing 400 million barrels of strategic reserves. Additionally, Trump said the Iran war might end soon. If the war ends, there's no need for Iran to block the Strait of Hormuz, and oil and gas navigation will recover. However, although Trump's TACO expectations have increased, the war isn't completely over, so the oil market will continue to have high volatility [2]. Summary by Relevant Catalogs Market News and Important Data - The settlement price of U.S. crude oil futures was $94.77 per barrel, up $3.87 or 4.26%. The settlement price of the April diesel futures contract on the New York Mercantile Exchange was $3.5866 per gallon. The SC crude oil main contract closed up 0.33% at 749 yuan per barrel [1]. - Japanese Finance Minister Katahira Satsuki said that G7 energy ministers are expected to meet tonight to discuss the release of oil reserves [1]. - U.S. President Trump said the U.S. military action against Iran will "soon" end. He also mentioned that he knew oil and gas prices would rise, and the price increase was lower than his expectation. He was "disappointed" with the new Iranian leader. If Iran disrupts oil supply, the U.S. will strike harder and will lift some sanctions to lower oil prices. He also threatened Cuba and said the U.S. will transport 100 million barrels of oil from Venezuela [1]. - Trump said the U.S. will temporarily lift some oil - related sanctions to ensure sufficient oil supply and lower oil prices. The price increase was not as serious as he worried. He didn't give specific details. Last week, the U.S. issued a 30 - day temporary exemption allowing the sale of Russian oil stranded at sea to India [1]. - Russian President Putin said that oil production relying on transportation through the Strait of Hormuz may soon be completely interrupted. He also pointed out that price increases may be temporary. Russia should adjust its direction, target new markets in need of increased oil and gas supply, and is willing to cooperate with European countries on oil and gas supply if they show clear signals of stability [1]. - Bank of America abandoned its previous prediction of two 25 - basis - point interest rate cuts by the Bank of Canada this year. It now expects the Bank of Canada to keep interest rates unchanged until 2026. A 10% continuous increase in oil prices is expected to boost Canada's GDP growth by 0.3 percentage points and CPI growth by 0.4 percentage points in the next 12 months. The Bank of Canada is not expected to raise interest rates as price pressure will be offset by the strong appreciation of the Canadian dollar [1]. Investment Logic - Yesterday's large - scale oil price fluctuations were mainly due to G7's consideration of releasing strategic reserves and Trump's statement about the possible end of the Iran war. The oil market will maintain high volatility as the war is not over [2]. Strategy - Due to the high volatility of oil prices in the short - term affected by geopolitical situations, the risk of participating in the crude oil market is high. It is recommended to use options to hedge risks [4]. Risks - Downside risk: The Middle East war eases, and the Strait of Hormuz resumes navigation [4]. - Upside risk: The suspension of navigation in the Strait of Hormuz exceeds expectations [4].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the energy sector, including ADNOC Gas, ADNOC Drilling, ADNOC Distribution, and Saudi Aramco, among others [1]. Core Insights - The geopolitical tensions in the Middle East, particularly between the US and Iran, are expected to impact the oil market primarily through a geopolitical risk premium estimated at $5-10 per barrel, which is significantly lower than the premiums observed during past crises [5][12]. - Iran's oil exports are currently around 1.5 million barrels per day, and any short-term disruptions could be compensated by the spare capacity of core OPEC producers, especially Saudi Arabia and the UAE [5][6]. - The report highlights that the core OPEC countries hold approximately 4 million barrels per day of spare capacity, which can mitigate temporary declines in Iranian exports [6]. Company Summaries - ADNOC Gas: Strong performance with a target P/E of 15.7 for 2026E and 14.9 for 2027E [1]. - ADNOC Drilling: Expected to maintain robust performance with a target P/E of 16.1 for 2026E and 14.9 for 2027E [1]. - ADNOC Distribution: Achieved record EBITDA and expanded its gas station network to over 1,000 locations [3]. - Borouge: Exceeded expectations with industry-leading EBITDA margins [3]. - Saudi Aramco: Continues to perform well with a target P/E of 16.4 for 2026E and 15.8 for 2027E [1].

研究报告 Research Report 70 90 110 130 150 170 2024/4/15 2024/7/15 2024/10/15 2025/1/15 S&P 500 MSCI China Tadawul FTSE ADX 资料来源 Factset, HTI Related Reports Middle East Energy Strategy: Middle East Geopolitical Escalation: Oil Market Impact 新能源及工业周报(10/06-10/12)：铀期货价格触及今年高点，IEA 将 2030 年美国可再生能源容量增长的预期下调 50% (13 Oct 2025) 新能源及工业周报(09/29-10/05)：DOE 公布"先进核燃料产线试 点"；Crusoe Abilene 数据中心园区投入使用，赋能 Stargate 项目(6 Oct 2025) 美联储鹰派降息，美国 AI 工业与能源行业影响或为短期(20 Dec 2024) （本报告为 2026 年 3 月 2 日发布的英文报告的翻译版，以原稿为 准） 中东能源战略 中东能源战略：石油市场 ...

Group 1: Oil Price Impact on Inflation - The ongoing US-Iran conflict has raised concerns about oil supply, pushing global oil prices above $110 per barrel, which heightens stagflation fears and will directly impact the US CPI in March and beyond[1] - In a baseline scenario, if oil prices remain at $100 per barrel, with a 50% transmission rate to gasoline prices, the year-end CPI growth rate is projected to be 3.48%[1] - In a risk scenario, if oil prices stay at $150 per barrel with a 100% transmission rate, the year-end CPI growth rate could reach 7.15%[1] Group 2: Transmission Mechanism of Oil Prices - Oil prices primarily affect the US CPI through retail gasoline prices, with a transmission rate of approximately 50%[1] - Historical data shows that during periods of rising oil prices, the transmission to gasoline prices is faster than during declines, exemplified by the 2022 Russia-Ukraine conflict where the transmission coefficient reached 100%[1] - The "second-round effect" of rising oil prices can lead to persistent inflation, as evidenced by studies indicating that oil price increases can gradually elevate overall CPI over several quarters[1] Group 3: Market Expectations and Risks - Market expectations for a ceasefire in the US-Iran conflict are uncertain, with a 55% probability of a ceasefire by April 30 and 70% by June 30[2] - If the conflict persists and oil production is disrupted, there is a risk of oil prices exceeding $150 per barrel, which would significantly impact US inflation and delay potential interest rate cuts by the Federal Reserve[1] - The current geopolitical situation and its unpredictability necessitate a comprehensive assessment of the tail risks associated with rising oil prices on US inflation[1]

Core Viewpoint - The article discusses the dramatic fluctuations in oil prices due to geopolitical tensions and statements from U.S. President Trump, highlighting the volatility in the energy market and its implications for global financial markets [4][10]. Group 1: Oil Price Fluctuations - Oil prices surged to nearly $120 per barrel amid escalating tensions in the Middle East, only to plummet back to around $85 within 24 hours, reflecting a drop of over $35 [6][9]. - The rapid price changes were triggered by Trump's comments suggesting that the conflict with Iran might soon end, which led to a significant reversal in market sentiment [12][17]. Group 2: Market Reactions - Following Trump's statements, the Nasdaq index rebounded by 1.4%, and the Dow Jones experienced a dramatic recovery of over 1000 points, indicating a strong market reaction to the news [17]. - The volatility in oil prices also affected U.S. Treasury yields, which initially rose before falling back, demonstrating the interconnectedness of oil prices and broader financial markets [19][20]. Group 3: Geopolitical Context - The U.S. is concerned about rising oil prices due to their potential impact on inflation and political support for the administration, especially with midterm elections approaching [25][28]. - Trump's remarks about the military situation in Iran and the potential easing of oil-related sanctions were aimed at stabilizing the market and preventing further price increases [14][24]. Group 4: Supply Chain Issues - Despite the market's optimistic response, significant logistical challenges remain, with oil transport through the Strait of Hormuz down by 90%, leading to a daily supply reduction of 18% globally [39]. - Middle Eastern oil producers are facing storage capacity issues, prompting production cuts, as seen with Kuwait's announcement of a reduction from 100,000 to nearly 300,000 barrels per day [40][41]. Group 5: Market Structure and Investor Behavior - The extreme volatility in oil prices is partly due to a crowded short position among hedge funds, which forced many to cover their shorts when prices began to rise [32][33]. - Retail investors have been heavily involved in trading oil ETFs, leading to significant trading volumes and speculative behavior, likening their actions to meme stock trading [30][36].

Domestic Market Overview - The domestic market experienced fluctuations and a rebound, with the Shanghai Composite Index closing at 4096.6 points, down 0.67%, and the Shenzhen Component Index at 14067.5 points, down 0.74% [1][10] - Among 30 first-level industries, 7 saw an increase, with coal, computer, and electric equipment & new energy leading the gains, while communication, transportation, and machinery faced significant declines [1][10] - The total trading volume of the A-share market reached 26,706 billion, showing an increase compared to the previous day [1][10] Overseas Market Overview - All three major U.S. stock indices closed higher, with the Dow Jones up 0.5%, the S&P 500 up 0.83%, and the Nasdaq up 1.38% [2][10] - Notable gainers included Caterpillar, which rose over 3%, and Nvidia, which increased by more than 2% [2][10] - The Nasdaq China Golden Dragon Index rose by 1.76%, with Kingsoft Cloud surging over 19% and BrainCo rising more than 10% [2][10] News Highlights - The 2026 national legislative highlights include the formulation of laws related to state-owned assets, bankruptcy, and tax management, as well as laws aimed at strengthening the financial sector and anti-corruption measures [12][13] - Oil prices are set to increase, with a rise of 0.55 yuan per liter for 92 gasoline, resulting in an additional cost of 27.5 yuan for a full tank [14] - The National Bureau of Statistics reported that the Consumer Price Index (CPI) rose by 1.0% month-on-month and 1.3% year-on-year in February, while the Producer Price Index (PPI) saw a month-on-month increase of 0.4% and a year-on-year decrease of 0.9% [16][19]

1. Report Industry Investment Rating - All varieties in the report are rated as "volatile" [1][3][4][7][8] 2. Core Views of the Report - The conflict between the US, Israel and Iran has led to significant fluctuations in oil prices, and the situation of the Strait of Hormuz will affect the pricing of crude oil. In the current week, oil prices will still fluctuate significantly [1][3] - The increase in asphalt prices is driven by the rise in oil prices. The geopolitical conflict restricts the procurement of heavy - crude oil, but the terminal demand has not started substantially, resulting in a "strong - cost and weak - demand" game in the asphalt market, and the increase may be less than that of other oil products [3] - The prices of polyester products have risen, and the cost increase is the main concern. If the geopolitical situation continues to ferment, there is still room for upward movement in polyester varieties, but factors such as the new Iranian leadership and the G7's discussion on releasing strategic oil reserves may cause oil price adjustments [4] - Rubber is in the low - production season at home and abroad, and the probability of a smooth tapping in China in mid - to - late March is relatively high. The downstream start - up repair power is strong, and the rubber price is expected to fluctuate. The price of butadiene rubber is strong due to the sharp rise in raw materials [7] - The supply of methanol is in a high - level shock, and the demand is at a low level. The decline in arrivals in March will support the price, but the low load of MTO devices will put pressure on inventory reduction. The Iranian situation is unclear, which may cause large - scale fluctuations in the market [7] - For polyolefins, the planned maintenance of upstream devices increases, and the downstream demand has room for growth. The market maintains a de - stocking rhythm, but short - term geopolitical risks increase volatility [8] - For PVC, the geopolitical situation has a greater impact on the ethylene - method production, but the profit of the calcium - carbide method is strong. The supply is expected to remain high, the demand will gradually recover, and the price is expected to maintain a bottom - level shock [8] 3. Summary According to Relevant Contents 3.1 Research Views 3.1.1 Crude Oil - On Monday, the WTI April contract rose by $4.26 to $94.77 per barrel, a 4.26% increase; the Brent May contract rose by $6.27 to $98.96 per barrel, a 6.76% increase; SC2604 closed at 749.1 yuan per barrel, up 2.5 yuan per barrel, a 0.33% increase [1] - The statements from Iran, the US President, and the Russian President have different impacts on oil prices. The conflict situation and the situation of the Strait of Hormuz need time to be observed, and oil prices will fluctuate significantly this week [1][3] 3.1.2 Fuel Oil and Asphalt - The main asphalt contract BU2604 on the Shanghai Futures Exchange rose 8.99% to 4075 yuan per ton on Monday, driven by the sharp rise in oil prices [3] - Geopolitical conflicts restrict the procurement channels of heavy - crude oil for local refineries, and the raw - material arrival cost continues to rise, which may restrict the asphalt production plan. However, the terminal demand has not started substantially, resulting in slow digestion of social inventory [3] 3.1.3 Polyester - Many polyester varieties had their daily limit up on the previous trading day. TA605 closed at 6316 yuan per ton, up 7%; EG2605 closed at 4597 yuan per ton, up 5.03%; the PX futures main contract 605 closed at 9028 yuan per ton, up 4.13% [4] - The cost increase is the main concern. Whether polyester varieties can continue to rise depends on factors such as geopolitical development, the start - up situation of domestic suppliers, and downstream feedback [4] 3.1.4 Rubber - On Monday, the main rubber contracts (RU2605, NR, BR) all rose. The price of butadiene increased significantly, with the enterprise ex - factory price increasing by 2900 - 3400 yuan per ton, a 22% - 25% increase from the previous day [7] - Rubber is in the low - production season, and the probability of a smooth tapping in China in mid - to - late March is relatively high. The downstream start - up repair power is strong, and the rubber price is expected to fluctuate [7] 3.1.5 Methanol - On Monday, the Taicang spot price was 2865 yuan per ton, the Inner Mongolia north - line price was 2360 yuan per ton. The supply is in a high - level shock, and the demand is at a low level [7] - The decline in arrivals in March will support the price, but the low load of MTO devices will put pressure on inventory reduction. The Iranian situation is unclear, which may cause large - scale fluctuations in the market [7] 3.1.6 Polyolefins and PVC - For polyolefins, the planned maintenance of upstream devices increases, and the downstream demand has room for growth. The market maintains a de - stocking rhythm, but short - term geopolitical risks increase volatility [8] - The price of PVC in the East, North, and South China markets has been significantly increased. The geopolitical situation has a greater impact on the ethylene - method production, but the profit of the calcium - carbide method is strong. The supply is expected to remain high, the demand will gradually recover, and the price is expected to maintain a bottom - level shock [8] 3.2 Daily Data Monitoring - The report provides the basis price data of various energy - chemical products on March 9 and 6, 2026, including spot price, futures price, basis, basis rate, and their changes and historical quantile information [9] 3.3 Market News - The G7 finance ministers have stated that they are ready to take necessary measures, including releasing reserves, to support global energy supply and will continue to monitor the situation [13] - Russian President Putin said that an energy crisis has arrived, and the war between the US, Israel and Iran has triggered a global energy crisis. The oil production relying on the Strait of Hormuz may stop completely [13] 3.4 Chart Analysis - **4.1 Main Contract Prices**: The report provides the price trend charts of main contracts of various energy - chemical products from 2022 to 2026, including crude oil, fuel oil, asphalt, LPG, PTA, etc. [15][17][19][21][24][25][26] - **4.2 Main Contract Basis**: It provides the basis trend charts of main contracts of various products, including crude oil, fuel oil, low - sulfur fuel oil, asphalt, etc. [31][32][35][37][38] - **4.3 Inter - period Contract Spreads**: It presents the spread trend charts of inter - period contracts of various products, such as fuel oil, PTA, ethylene glycol, PP, etc. [39][41][44][45][47][49][50] - **4.4 Inter - variety Spreads**: It shows the spread and ratio trend charts between different varieties, such as crude oil internal - external spreads, fuel oil high - low - sulfur spreads, etc. [53][55][57][58] - **4.5 Production Profits**: It provides the production profit trend charts of some products, such as LLDPE, PP, PTA, etc. [59][60][62] 3.5 Team Member Introduction - The report introduces the members of the Everbright Futures Energy - Chemical Research Team, including the deputy director Zhong Meiyan, the energy - chemical research director Du Bingqin, the natural rubber/polyester analyst Di Yilin, and the methanol/propylene/pure benzene PE/PP/PVC analyst Peng Haibo, along with their work experience, honors, and professional qualifications [65][66][67][68] 3.6 Contact Information - The company's address is Unit 703, 6th Floor, No. 729 Yanggao South Road, China (Shanghai) Pilot Free Trade Zone. The company phone is 021 - 80212222, the fax is 021 - 80212200, the customer service hotline is 400 - 700 - 7979, and the postcode is 200127 [70]

Core Viewpoint - Iran's Islamic Revolutionary Guard Corps announced that it will not allow "enemies and their allies" to export oil from the region in the event of an attack on Iran [2]. Group 1 - Iran activated its air defense system in response to potential threats [2].

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The impact of crude oil prices on inflation is mainly reflected in PPI, with a relatively limited impact on CPI. Every 10% adjustment in crude oil prices may drive a 0.35 - percentage - point change in PPI and a 0.1 - percentage - point change in CPI [1][10][12]. - Depending on the scenarios of the US - Iran situation (easing, maintaining, or intensifying), with assumed oil price centers of $80, $100, and $120 per barrel respectively, the PPI may turn positive year - on - year in March ahead of schedule when the oil price center is above $80 per barrel, and the CPI year - on - year central value may be driven up by 0.1 - 0.6 pct but is unlikely to exceed 2% [1][2]. - Short - term inflation expectations trading and good inflation readings may suppress bond market sentiment. However, significant oil price increases as an imported inflation factor are difficult to change the monetary policy direction and bond market trend [2][22][28]. - The current bond market adjustment is considered a temporary shock rather than a new round of continuous adjustment. New funds can gradually invest in 10y treasury bonds, and existing assets can be held, with the annual coupon strategy remaining the main line [3][30][31]. Summary According to the Directory I. Different Scenarios of the Impact of Oil Prices on Inflation (1) Impact of Oil Prices on Inflation Data - The impact of crude oil prices on inflation is mainly on PPI, and every 10% adjustment in oil prices may drive a 0.35 - percentage - point change in PPI. The elasticity of oil prices to PPI is stable around 0.35 [1][10][16]. - The impact of crude oil prices on CPI is relatively limited, and every 10% adjustment in oil prices may drive a 0.1 - percentage - point change in CPI. Domestic oil price fluctuations are significantly smaller than those of overseas crude oil prices [12][13]. - Under different scenarios of the US - Iran situation, with oil price centers of $80, $100, and $120 per barrel, the PPI may turn positive year - on - year in March ahead of schedule when the oil price center is above $80 per barrel, and the CPI year - on - year central value may be driven up by 0.1 - 0.6 pct but is unlikely to exceed 2% [16][19][20]. (2) Impact of Oil Prices on the Bond Market - Short - term inflation expectations trading and good inflation readings may suppress bond market sentiment. When the PPI month - on - month approaches or exceeds 0.5%, it may disturb bond market sentiment [22]. - Historically, when PPI year - on - year turns from negative to positive driven by supply - side and imported inflation, the upward range of 10y treasury bonds is usually within 10bp [25]. - However, significant oil price increases as an imported inflation factor are difficult to change the monetary policy direction and bond market trend. Geopolitical events in oil - exporting countries have a relatively neutral impact on 10y treasury bonds [28]. - The current bond market adjustment is a temporary shock. New funds can gradually invest in 10y treasury bonds at around 1.85%, and existing assets can be held with the annual coupon strategy as the main line [30][31]. II. February CPI: A Combination of Strong Services, Oil Prices, and Gold Prices, along with the Chinese New Year Date Shift, Led to a 1.3% Year - on - Year Increase (1) Food Items - The CPI food price increased by 1.7% in February, driving the CPI up by about 0.33 pct. Pork prices rose by 4%, and livestock meat prices rose by 2.6%, affecting the CPI to rise by about 0.11 pct [36]. - Fresh produce prices were slightly weaker than the seasonality. Aquatic products, eggs, and fresh fruits prices rose, but fresh vegetable prices decreased slightly by - 0.1%, and overall, fresh produce prices drove the CPI up by about 0.22 pct [36]. (2) Non - food Items - The CPI non - food item month - on - month increased above the seasonality to 0.8% in February, driving the CPI up by about 0.66 pct [42]. - Energy: Rising oil prices affected the CPI to rise by about 0.1 pct. In February 2026, domestic oil prices followed overseas adjustments, and the CPI transportation fuel prices rose by 2.8% [42]. - Core consumer goods: The impact on the CPI increase was about 0.02 pct, with the overall change being relatively limited, mainly contributed by the gold price. Gold prices may have affected the CPI to rise by about 0.04 pct, while household appliances decreased significantly, dragging down the CPI [44]. - Services: Prices increased above the seasonality, affecting the CPI to rise by about 0.54 pct, accounting for more than 50% of the monthly contribution. Travel - related service prices increased above the seasonality due to the long Chinese New Year, and other service consumption also benefited from the festival effect [49]. III. February PPI: Obvious Imported Inflation, with a Month - on - Month Increase Maintained at 0.4% and a Narrowed Year - on - Year Decline to - 0.9% (1) Overall - The PPI month - on - month increase was maintained at 0.4% in February, and the mining industry became the leading sector for price increases again. The production materials price increased by 0.5%, and the living materials price remained flat [51]. (2) By Industry - In February 2025, the number of industries with rising prices among industrial producers decreased from 13 to 11 [56]. - Support factors: Imported non - ferrous metal and crude oil industrial chains, as well as high - end manufacturing such as electrical machinery and electronic equipment [57][63]. - Drag factors: Seasonal price - cutting factors. During the production off - season, coal and power prices decreased [63].