32GB Memory Sticks Rise to 3800 Yuan, Shanghai Index Breaks Below 4000 Points on Friday | Financial Daily Commentary

Source: Wu Xiaobo Channel CHANNELWU

China’s 3-month LPR remains unchanged for ten consecutive months

On March 20, the People’s Bank of China authorized the National Interbank Funding Center to announce that the one-year Loan Prime Rate (LPR) for March is 3%, unchanged from the previous value. The five-year LPR is 3.5%, also unchanged from the previous value. The LPR has remained stable for ten months in a row. The last adjustment was in May 2025, when both the 1-year and above 5-year LPRs were lowered by 10 basis points.

Latest data from the central bank shows that in January 2026, the weighted average corporate loan interest rate was about 3.2%, down 2.4 percentage points from the peak since the current rate-cut cycle began in late 2018. This Wednesday, the Party Committee of the People’s Bank of China held an expanded meeting, stating that it will guide and regulate interest rates based on changes in the economic and financial situation and macroeconomic operation, strengthen the implementation and supervision of monetary policy, standardize financing intermediary costs, and promote low social financing costs. (Comprehensive from the official website of the PBOC)

｜Comment｜The central bank has kept policy interest rates unchanged for ten months, demonstrating strong strategic resolve. Earlier this year, domestic manufacturing activity declined, and domestic demand recovery faced pressure. However, China’s exports remain high-speed, and price levels are reasonably recovering. Overall, there is no urgent need for the central bank to cut interest rates. Additionally, conflicts in the Middle East have heightened global inflation expectations, and the monetary policies of Europe and the US are signaling a hawkish shift, raising concerns about exchange rates for China’s monetary policy adjustments.

Currently, the central bank’s moderately loose monetary policy remains unchanged. The financing costs for the real economy domestically are already low, but banks’ net interest margins have yet to recover. As high-interest-rate deposits are gradually replaced by low-interest-rate products, banks’ interest payment pressures are passively easing. The mid-year may present a window for slight rate cuts by the central bank.

Refined oil prices may rise to the “9 yuan era” across the board

On March 20, with international oil prices rising, according to the current domestic refined oil adjustment mechanism, industry estimates suggest that at 24:00 on March 23, the domestic refined oil prices will see the sixth adjustment this year. According to Zhuo Chuang Information, the retail price of refined oil in China is expected to increase by about 2,000 yuan per ton. If implemented at this level, 92-octane gasoline in China will cost over 85 yuan.

For daily travel, assuming private cars drive 2,000 km per month with an average fuel consumption of 8 liters per 100 km, the fuel cost per vehicle will increase by about 138 yuan before the next price adjustment. For logistics, considering heavy trucks driving 10,000 km per month with a fuel consumption of 38 liters per 100 km, the fuel cost per vehicle will increase by approximately 3,553 yuan. (Xinhua Finance)

｜Comment｜The last time domestic refined oil prices exceeded 9 yuan was during the Russia-Ukraine conflict in 2022. Recently, tensions in the Middle East have escalated, with the Strait of Hormuz being temporarily closed, pushing international crude oil prices sharply higher again. Domestic refined oil prices are linked to international crude oil prices, based on the average price over the entire adjustment cycle, so a further increase is highly likely next week. Before the March 9 price adjustment, many gas stations experienced overnight queues for refueling, and this may happen again soon.

As a key raw material for industrial production, rising crude oil prices will not only affect refined oil prices but also increase costs for various industrial products. If passed on to consumers, this could trigger a broad price increase and pose import-driven inflation risks. The renewed conflict in the Middle East underscores the strategic importance of energy security, making the development and promotion of alternative energy sources especially urgent.

Memory modules of 32GB surged from 800 yuan to 3,800 yuan

On March 20, due to explosive demand from AI applications, memory prices continue to rise. Merchants in Shenzhen Huaqiangbei electronics market said that at the cheapest, Kingston 16GB basic RAM sticks (entry-level memory) were around 200 yuan last April or May, now they are about 800 yuan; 32GB memory, previously 800 yuan, now may cost around 3,800 yuan.

The price increase of memory modules has also affected various storage devices, with hard drives and memory cards seeing significant price hikes. Previously, Western Digital and Seagate, two major hard drive manufacturers, announced that their full-year capacity for 2026 was already sold out. Since March, domestic brands like OPPO, Honor, and vivo have raised their smartphone prices, partly due to the continuous surge in costs for high-speed storage hardware and other key components. (CCTV Finance)

｜Comment｜This round of memory price hikes started last year and has continued, with the increase far exceeding market expectations and affecting a broader range of products. The huge demand for memory in AI data centers has led storage giants to shift capacity toward high-bandwidth memory and chips, causing a severe contraction in general memory supply, which is the direct reason for the price rise. Although some storage devices do not share capacity with memory modules, they are also in demand as substitutes, pushing their prices higher. Downstream, smartphones and computers face pressure, potentially leading to product price increases or reduced specifications, and consumers should adjust expectations accordingly.

The strong storage cycle driven by AI is undoubtedly making storage manufacturers very profitable. However, companies with high demand and requirements for storage devices may face significant cost pressures. Since expanding storage capacity takes time, the current price hike trend may be difficult to end in the short term. Still, it’s important to recognize that memory is essentially a consumer product; chasing high prices for stockpiling could entail significant risks if the cycle turns.

Tesla plans to purchase 20 billion yuan worth of photovoltaic equipment in China

On March 20, it was reported that Tesla is seeking to purchase about $2.9 billion (roughly 20 billion yuan) worth of photovoltaic manufacturing equipment from Chinese suppliers. This move aims to support Elon Musk’s goal of adding 100 GW of photovoltaic manufacturing capacity in the US. It is understood that Tesla’s team visited several domestic photovoltaic equipment manufacturers before the Spring Festival in 2026.

Chinese suppliers are required to deliver these photovoltaic panels and battery manufacturing equipment by this fall. Two insiders said that the equipment will mainly be shipped to Texas. Currently, only about 10% of the total 1,300 GW power generation capacity in the US is from photovoltaics. Building 100 GW of photovoltaic capacity within a few years is a formidable challenge. (Wall Street Journal)

｜Comment｜During Tesla’s rapid expansion, Chinese suppliers helped Tesla overcome “capacity hell.” China’s photovoltaic supply chain has a leading advantage globally. As Tesla seeks to expand its photovoltaic industry in the US, partnering with Chinese companies is a natural choice. Moreover, China’s upstream and downstream photovoltaic industries are currently in overcapacity, enabling quick response to Tesla’s large-scale demand and offering lower prices than international peers.

Amid fervent construction of computing centers, the US power grid’s gap is widening. Tesla, already involved in electric vehicles and energy storage, is now entering photovoltaic manufacturing to complete its energy ecosystem—from production and storage to usage. Purchasing photovoltaic equipment from China is just the first step; subsequent industry chain integration and product manufacturing in the US will require substantial investment, posing a significant challenge to Tesla’s cash flow.

Alibaba’s Q4 revenue grows 2% year-over-year

On March 19, Alibaba Group released its financial report for the third quarter of fiscal year 2026 (calendar year 2025 Q4), showing that the company achieved revenue of 284.84 billion yuan, up 2% year-over-year; net profit attributable to ordinary shareholders was 16.32 billion yuan, down 67%; non-GAAP net profit was 16.71 billion yuan, also down 67%. The most notable growth came from cloud and AI businesses. Alibaba Cloud’s revenue increased 36% year-over-year to 43.284 billion yuan, with AI-related product revenue maintaining triple-digit growth for the tenth consecutive quarter.

Pingtouge Semiconductor made its first appearance in Alibaba’s financial report, revealing that the company has mass-produced its self-developed Pingtouge GPU, supporting end-to-end AI workloads from training and fine-tuning to inference. As of February 2026, the self-developed GPU chips have been delivered in a total of 470,000 units. In the future, Pingtouge may consider an IPO. (CaiLian News)

｜Comment｜Alibaba’s Q4 performance shows a multi-pronged approach, with net profit declining due to investments in new businesses, while AI and cloud services have become new pillars of growth. The e-commerce sector was relatively weak in the last quarter, with consumer enthusiasm for “Double 11” gradually cooling. Alibaba slightly reduced subsidies for Taobao Flash Sale, but expenses remain high. Additionally, increased promotional investments in apps like Gaode Map and Qianwen have put short-term pressure on profits but also opened up future revenue growth potential.

Alibaba Cloud continued rapid growth in Q4. With large-scale deployment of “Lobster” applications, Alibaba Cloud has proactively raised service prices, likely contributing more to profits. Pingtouge’s self-developed chips have gained broad recognition from external clients. The company’s early investments in computing hardware and AI large models have positioned Alibaba as a leader in domestic AI competition.

Google develops Mac version of Gemini app

On March 20, it was reported that Google is developing a Gemini AI app specifically for Apple’s Mac series, currently in internal testing under the code name “Janus.” This week, Google has started sending early test versions of Gemini for Mac to selected testers, covering core AI functions such as image generation, video creation, music production, spreadsheet analysis, and mathematical calculations. The app also supports real-time web search, conversation history, personalized services, and deep analysis of media documents.

Notably, Google is testing a “desktop intelligence” feature that allows Gemini to access Mac system apps like Calendar and Reminders, extracting relevant data to provide more targeted responses. Previously, OpenAI’s ChatGPT and Anthropic’s Claude had launched Mac versions of their apps. (Jiemian News)

｜Comment｜Google’s previous AI app strategy focused on mobile, leaving the desktop market to OpenAI and Anthropic. The web version of Gemini cannot actively extract data from devices or access screen information, limiting user needs for AI smart applications. By deep integration with Apple’s ecosystem through recent AI collaborations on Siri, Google aims to create a system-level AI assistant for Mac, competing for professional users.

For Apple, cooperation with Google is more of a stopgap. Due to repeated setbacks in AI app development, Apple can only temporarily rely on external solutions to meet user demands. To uphold its privacy policies, Apple prefers to utilize device’s own computing power rather than uploading data to the cloud. Currently, this approach faces many difficulties.

Live pig average price falls below 10 yuan/kg

On March 19, data showed that the nationwide average price for external three-variant live pigs was 9.95 yuan per kilogram, officially falling below the 10 yuan mark. The lowest was in Xinjiang at 9.3 yuan/kg, the highest in Guangdong at 10.82 yuan/kg. According to Shanghai Steel Union data, as of March 12, the average loss per pig for self-breeding farms was 265.22 yuan, and for external piglets, 155.46 yuan, indicating the breeding industry is now in full loss.

The Ministry of Agriculture and Rural Affairs’ Veterinary Bureau held multiple meetings on pig capacity regulation, including reducing breeding sows to cut pork production capacity. This year’s No. 1 document shifted from “monitoring and regulating pig capacity for steady development” last year to “strengthening comprehensive regulation of pig capacity.” (Cailian News)

｜Comment｜In 2019, under African swine fever, pork prices soared, and pig farms profited greatly, attracting large social capital into pig breeding. Since 2021, domestic pig supply quickly shifted from shortage to oversupply. Although some regulation of breeding sows has been implemented, improvements in breeding technology have significantly increased piglet production efficiency, leading to more supply. Meanwhile, recent rises in feed prices like soybean meal and corn have increased costs. The long-term oversupply has squeezed profit margins, leading to widespread losses.

Leading domestic pig farms have achieved large-scale breeding with cost advantages. As the industry faces overall losses, it’s a good time for top companies to expand market share. However, recent regulatory guidance has become more rigid, requiring reductions in annual slaughter volumes, which may signal a turning point for pig prices.

Market opens higher but falls back below 4000 points on Friday

On March 20, the market showed a morning rally followed by a retreat, with the Shanghai Composite Index falling below the half-year moving average and breaking the 4,000-point level. The ChiNext Index hit a new high for the year during the session but quickly retreated. The market showed clear sector divergence, with small and micro-cap stocks falling more than 3%. Total trading volume was 2.29 trillion yuan, up 175.9 billion from the previous day. Over 4,700 stocks declined for two consecutive days. In sectors, power and energy storage concepts were active, and computing hardware concepts rose during the session. Declining sectors included chemicals, and leasing of computing power also weakened.

At close, the Shanghai Composite was at 3,957.05 points, down 1.24%, with a turnover of 964.9 billion yuan; Shenzhen Component Index at 13,866.2 points, down 0.25%, with 1.322 trillion yuan traded; ChiNext at 3,352.1 points, up 1.3%, with 663.3 billion yuan traded. (Sina Finance)

｜Comment｜On Friday, the two markets continued their weak trend, with only slight rebounds near midday. The Shanghai Index fell below 4,000 points. The market was affected by Tesla’s procurement plans for Chinese photovoltaic equipment, with the photovoltaic sector rebounding in the afternoon. Most sectors remained in correction, and the previously strong cloud computing and AI-related sectors saw quick profit-taking. Market confidence remains weak, and most sector movements are not strongly linked to news. Consumer sectors, which performed poorly earlier, showed relative resilience, while growth sectors accumulated profit-taking, leading to larger declines.

Whether rebounding or correcting, trading activity throughout the week remained subdued. Under the stockpile of existing funds, only quantitative funds were relatively active. The lack of trading capital resulted in relatively smooth movements across most sectors and stocks.

Not investment advice

Chief Editor | Wei Yingjie | Editor | He Mengfei

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