June china manufacturing pmi returns to expansion zone! crude oil night session plunges again, plastic main contracts mostly slightly down

1. Overnight Crude Oil Market Dynamics

Navigation through the Strait of Hormuz is gradually resuming, and concerns over supply risks continue to ease, causing international oil prices to fall. NYMEXCrude oil futuresThe WTI crude oil futures August contract fell by $1.25/bbl to $69.50/bbl, down 1.77% month-on-month; the ICE Brent crude futures August contract fell by $0.23/bbl to $72.92/bbl, down 0.31% month-on-month. China’s INE crude oil futures August 2026 contract rose by 0.3 to RMB 462.1/bbl, and fell by 5.4 to RMB 456.7/bbl in night trading.

Market Outlook Forecast

The progress of navigation through the Strait of Hormuz remains critically important. Although the U.S. special envoy and the Iranian foreign minister are both in Qatar, Qatari officials said on Tuesday that the United States and Iran had no high-level meeting planned in Doha that day. The failure of the talks to take place as scheduled has heightened market caution. Iran’s Foreign Ministry said there are no meetings between Iran and the United States scheduled for the next few days. Iran has taken a hard line, determined to uphold its rights to manage the Strait of Hormuz, and the differences between the U.S. and Iran remain very clear. With the original claim, promoted by Trump, that the U.S. and Iran would meet in Qatar on Tuesday having been proven false, the situation appears increasingly delicate. After Iran attacked merchant oil tankers over the weekend, the number of vessels transiting the strait fell again. Markets still believe the geopolitical contest between the U.S. and Iran is relatively manageable, but as time goes on, the feasibility of implementing the memorandum’s contents will face a test.

At this stage, oil prices indicate that supply pressure has outweighed the impact of declining inventories. If this situation persists until incremental supply begins to halt the inventory decline and stabilize stocks, it would be bad news for oil prices. Oil prices have closed with consecutive small doji-like candles, volatility has declined, and amid weak performance, the market is waiting for the final outcome. Pay attention to timing and participate cautiously.

II. Macroeconomic Dynamics

Middle East situation - ①Iran’s Foreign Ministry: There are basically no plans to hold meetings with the U.S. at any level in the coming days. Talks with mediator Qatar on implementing the U.S.-Iran agreement may be held in Doha on July 1, with topics including the release of frozen assets.

② Oman is reportedly proposing a toll-charging scheme for the Strait of Hormuz, citing models such as the one used for the Strait of Malacca.

③ Iranian Parliament Speaker Mohammad Bagher Ghalibaf: It is necessary to gradually enhance the prosperity and traffic capacity of the Strait of Hormuz.

Trump's 927-page financial report reveals over $1 billion in "fundraising," including income from World Cup tickets and settlement fees.

3、Federal Reserve's Harker: Inflation remains too high, may need to consider raising rates; futures indicate an 80% probability of a Fed rate hike in September.

4. It is reported that SK Hynix has submitted an application for listing on Nasdaq.

Reports indicate that OpenAI has found an optimization plan that can reduce AI inference costs by half. It is reported that the United States will lift export controls on the AI model Fable on the evening of the 30th local time.

6. After the UAE withdrew from OPEC, its oil exports hit a record high of 3.7 million barrels per day.

Recently, Russia’s average daily crude oil exports rose to 4.13 million barrels, the highest level since the outbreak of the Russia-Ukraine conflict.

8、U.S. Treasury Secretary Bessent: I would not be surprised if the June employment data is very strong. We will look into whether oil companies are engaging in price manipulation.

9、MIIT official: Step up efforts to tackle key challenges in materials such as lithium-rich manganese-based cathodes, silicon-based anodes, and solid-state electrolytes.

10、National Bureau of Statistics: In June, the manufacturing PMI stood at 50.3%, up 0.3 percentage points from the previous month and returning to expansion territory.

11. Ministry of Finance: From January to May, the total operating revenue of state-owned and state-controlled enterprises nationwide fell 0.7% year-on-year, while total profits increased 3.5% year-on-year.

12. The Ministry of Industry and Information Technology and seven other departments: Promote integrated planning and coordinated construction of industrial internet infrastructure, intelligent computing facilities, supercomputing facilities, and other computing infrastructure.

3. Plastic Market Futures Dynamics

Oil prices rebound hits a snag! Domestic plastic futures main contract.Slight fluctuations：

The plastic 2609 contract was quoted at 6,916 yuan/ton, down 0.30% from the previous trading day.

The PP2609 contract was quoted at 7,274 yuan/ton, down 0.67% from the previous trading day.

The PVC2609 contract is quoted at 4433 yuan/ton, up 0.57% from the previous trading day.

The Styrene 2607 contract was quoted at 7,303 yuan/ton, down 0.11% from the previous trading day.

4. Market Forecast

As the month comes to a close, petrochemical plants are beginning their accounting clearing work, leading to a temporary halt in the release of many cargoes. The tightening of available goods in the market has alleviated some of the pressure from previous supply backlogs, creating an opportunity for merchants to support prices. With the reduction in supply, industry participants are increasingly optimistic, raising their external quotes in an attempt to push prices up. In contrast, the overall demand from downstream processing is weak, with manufacturers only replenishing small amounts based on daily production consumption and showing little interest in bulk stockpiling. In the face of rising market prices, downstream players are adopting a cautious wait-and-see approach, slowing down their purchasing pace and unwilling to buy at higher prices, which has directly led to a gradual cooling of overall transactions. The trade segment is flexibly adjusting the sales rhythm with the market trend, and competitively priced low-cost goods are more likely to facilitate transactions. Relying solely on the favorable news of tightening supply is unlikely to stimulate enthusiasm for terminal purchases. Judging from the current situation on both the supply and demand sides, it is difficult for polyethylene prices to show a clear upward or downward trend in the short term. While the tight supply can support the price floor and prevent significant declines, the persistent weakness in terminal demand continues to suppress the potential for price increases. The market is likely to maintain a narrow range of fluctuations in its operational rhythm.

PP: The market is under pressure from weakening demand caused by the off-season in end-user consumption, while rising expectations of further Federal Reserve rate hikes are also weighing on the overall valuation of commodities. With multiple bearish factors resonating, support from crude oil costs has clearly weakened. In the PP market, however, futures posted a low-open, high-close trend. Supported by relatively tight spot circulation at month-end, spot traders moderately raised their offers, and spot prices edged slightly higher. Nevertheless, the market’s core weakness still lies on the demand side: downstream factories show limited purchasing willingness, actual receiving capacity remains weak, and sluggish follow-up on rigid demand directly constrains the upside room for spot prices. Overall, geopolitical positives are insufficient to offset the pressure from off-season demand weakness and macroeconomic headwinds. In the short term, the polypropylene market is likely to remain range-bound. The cost side lacks sustained upward momentum, while spot prices are only marginally supported by tight supply, and weak demand is unlikely to sustain a stronger upward trend, leaving both upside and downside relatively limited.

PVC: The rise in futures prices has boosted sentiment in the spot market’s quotations and, to some extent, tested the operating bottom of both the futures and spot markets. At present, there are not many variable factors on the supply and demand side, while expectations for continued inventory accumulation in social stocks remain, which also limits the room for a price rebound. Overall, in the short term, the PVC spot market may move away from the bottom and consolidate after rising.