China’s National General Public Budget Revenue Up 2.6% Year-on-Year in July; Oil Prices Continue to Weaken, Futures for Plastics Show Broad Decline

1. Overnight Crude Oil Market Update

The Russia-Ukraine peace talks continue to send positive signals, the geopolitical situation is expected to further ease, and international oil prices have declined. NYMEXCrude Oil FuturesThe September contract fell by $1.07 per barrel to $62.35, a week-on-week decrease of 1.69%; ICE Brent crude futures October contract fell by $0.81 per barrel to $65.79, a week-on-week decrease of 1.22%. China's INE crude oil futures October contract fell 0.1 yuan to 485.1 yuan per barrel, with the night session down 4.2 yuan to 480.9 yuan per barrel.

Future Market Forecast

2. Macroeconomic Developments

In July, the Ministry of Finance released data showing that the national general public budget revenue was 2,027.3 billion yuan, a year-on-year increase of 2.6%, marking the highest growth rate of the year. Among this, tax revenue was 1,801.8 billion yuan, an increase of 5%. In the first seven months of this year, the national general public budget revenue was 13,583.9 billion yuan, a year-on-year increase of 0.1%, with the cumulative growth rate turning positive for the first time; expenditure was 16,073.7 billion yuan, a year-on-year increase of 3.4%.

The National Teleconference on Promoting the Nationwide Old-for-New Exchange of Consumer Goods was held in Beijing. The meeting emphasized the need to steadily optimize policies, effectively implement policies to boost consumption increments, and accelerate the cultivation of new growth points in the consumer market.

The central bank has introduced an additional 100 billion yuan in relending funds for supporting agriculture and small businesses. This is to guide and encourage financial institutions to increase credit support for business entities, especially small and micro enterprises, individual businesses, as well as agricultural and farming enterprises and farmers in disaster-affected areas such as Beijing, Hebei, Jilin, Shandong, and Gansu.

The Ministry of Industry and Information Technology and other departments jointly held a symposium on the photovoltaic industry to make arrangements.Further regulate the competitive order of the photovoltaic industry。

In July, South Korea's automobile export value increased by 8.8% year-on-year, achieving growth for the second consecutive month. Exports to the European Union soared by 32.7%. Exports to the United States decreased by 4.6% year-on-year, marking the fifth consecutive month of decline, although the rate of decline slowed significantly compared to June's 16%.

The governments of Japan and the United States plan to hold close consultations on the specific implementation of $550 billion in investments in the U.S. Since the investment targets involve important sectors such as semiconductors, pharmaceuticals, steel, and shipbuilding, both sides will establish a mechanism to review national interests.

◎ U.S. Treasury Secretary Bessent:Will begin meeting with 11 candidates for Federal Reserve Chair around September 1; India's arbitrage through Russian oil is unacceptable.。

◎U.S. Secretary of Commerce Gina Raimondo has confirmed that the government is seeking to acquire a 10% stake in Intel, stating that it does not seek corporate governance rights. Reportedly, the U.S. is also considering expanding the "subsidies-for-equity" approach to other chip companies. Additionally, SoftBank Group has invested $2 billion to acquire a stake in Intel.

The United States has included 407 types of steel and aluminum derivative products in the tariff list.

Xiaomi Group’s revenue and profit both reached record highs in the second quarter.

3. Morning Market Trends of Plastics

The overall commodity market is cooling down, and oil prices continue to fluctuate lower. Overnight, the main contracts of domestic plastic futures were all in the red.

The plastics 2509 contract was quoted at 7,278 yuan/ton, down 0.57% from the previous trading day.

The PP2509 contract was quoted at 6,993 yuan/ton, down 0.50% from the previous trading day.

The PVC2509 contract is quoted at 4,968 yuan/ton, down 1.02% compared to the previous trading day.

The styrene 2507 contract was quoted at 7,172 yuan/ton, down 0.75% from the previous trading day.

4. Market Forecast

The on-site PE facilities are operating steadily, with no shutdowns or restarts, and the overall production capacity remains at the current level. The downstream sector is experiencing a demand off-season, providing very limited demand support. Terminal product companies are affected by the off-season factors, resulting in insufficient purchasing momentum, with many opting for on-demand procurement, maintaining only essential replenishment, and showing low enthusiasm for receiving goods. In this scenario, high-level transactions face significant challenges, and market transactions are mostly negotiated flexibly based on order quantities. However, the traditional peak consumption season of "Golden September and Silver October" is approaching, leading to a shift in market expectations, with a potential increase in order volume, which could drive the release of polyethylene procurement demand, providing a temporary boost to the market and alleviating the current weak demand situation. Overall, in the short term, due to stable supply and the lingering effects of the downstream off-season, demand-side support remains weak, and market transactions are likely to continue to be based on order quantity negotiations. But with the approach of "Golden September and Silver October," there is an expectation of demand improvement, and polyethylene market prices may seek upward opportunities amid fluctuations. However, there is some inventory backlog from earlier, and new capacity is gradually being released, which will limit the extent of price increases. It is expected that the polyethylene market will exhibit a fluctuating upward trend in the short term, but the overall increase will be limited.

PP: In terms of crude oil, the supportive factors for the market remain relatively stable. Sanctions by the United States on oil-producing countries will continue to provide some support to the market. Coupled with the stable operation of the US dollar market price as an external reference, this helps to suppress excessive market declines. However, bearish pressures cannot be ignored. The easing of geopolitical tensions, OPEC+ production increases, and the ongoing impact of global economic weakness continue to be felt. The domestic market's own weak consolidation pattern has not yet been broken, and low trading activity is limiting market recovery. Additionally, the anticipated restart of the Haitai Petrochemical facility today is expected to increase supply. Although the inventories of polyolefins from the two major oil companies have decreased, they remain at high levels, which suppresses the market. Overall, in the short term, the market lacks clear directional guidance, and prices are likely to fluctuate within the existing range.

PVC: On the supply side, PVC plant operating rates remain at high levels, while demand continues to be relatively weak. In terms of exports, on August 14, 2025, the Indian Ministry of Commerce and Industry issued an announcement, making a final affirmative anti-dumping ruling on PVC Suspension Resins originating in or imported from Mainland China, Indonesia, Japan, South Korea, Taiwan region of China, Thailand, and the United States. It recommended continuing to impose anti-dumping duties on the products from the aforementioned countries and regions for another five years. For Mainland China, the duty was generally raised by $46-52/ton compared with previous levels, exceeding market expectations. Changes in exports may further disrupt demand. Overall, the PVC spot market is expected to remain weak in the short term.