【Overseas Highlights】China-U.S. Economic And Trade Negotiations Yield Results, $30 Billion Goods Mutual Tariff Reduction! Japan Faces Naphtha Shortage Crisis

International Headlines Overview:

Raw Materials News: Iran Conflict Pushes Japan into “Naphtha Crisis”

Medical News - Kenvue partners with Greyparrot to accelerate the transformation of AI technology in medical packaging circularity.

Recycling News - Macron Launches New Plastic Recycling Initiative

Packaging News: Novvia Group Acquires APC Packaging, Continuing to Strengthen Its Beauty Packaging Business

Macroeconomic NewsAfter four years of negotiations, the United Kingdom has reached a trade agreement with Gulf countries.

Price InformationThe central parity rate of the RMB against the U.S. dollar was set at 6.8349, up 48 basis points.

The following are details of international news:

Iran conflict pushes Japan into “naphtha crisis”

Several media outlets recently reported that the fighting in Iran has disrupted shipping through the Strait of Hormuz, leaving Japan, which is highly dependent on imported energy, troubled by shortages of naphtha, a petroleum derivative.

BASF Launches a Cost-Cutting Revolution! Core Business Cost Reduction Target of 20% by 2029

On May 20, BASF officially announced the launch of the CoreShift program, which is part of the company’s new phase of the Winning Ways strategy. Based on 2024 figures, the company plans to reduce the net cash fixed costs of its core businesses by up to 20% by 2029.

The CoreShift plan aims to further deepen existing reform initiatives by adopting a global cross-business sector coordination transformation model. This includes further streamlining operational models and organizational structures, unifying global business processes, implementing standardized information technology solutions, and increasing the application of artificial intelligence technology across the entire group.

BASF said it has established a core transformation office to specifically advance the implementation of the plan, coordinating all core businesses, service units, and corporate headquarters in carrying out cross-segment transformation projects.

China-U.S. trade talks concluded, with reciprocal tariff reductions on $30 billion worth of goods and a tariff ceiling established; textile companies may be the biggest beneficiaries.

On May 20, the Ministry of Commerce released an authoritative interpretation by the head of the Department of American and Oceanian Affairs of the preliminary outcomes of the China-U.S. economic and trade consultations. This top-tier economic and trade negotiation, spanning from May 12 to 15 and moving from consultations in South Korea to a leaders’ meeting in Beijing, has finally reached core consensus—setting a ceiling on tariffs, mutual tariff reductions on $30 billion worth of goods, and a breakthrough in agricultural trade. Each of these points precisely addresses pain points in the textile industry chain, making it a veritable “timely rain” for the sector!

This achievement is by no means a short-term easing, but a milestone event that will restructure the global textile supply chain and reshape the landscape of China-U.S. textile trade. From raw materials to exports, from costs to orders, the entire industry chain will see systematic benefits.

Macron launches a new plastic recycling initiative.

French President Emmanuel Macron wants France to catch up in plastic recycling, as the country currently has to pay huge taxes on waste packaging that ultimately becomes rubbish and is either landfilled or incinerated. Speaking yesterday at a circular economy event in Paris, Macron said: “We need to explain clearly to the public that we pay the European Union €1.5 billion every year because we have failed to meet the commitments we set for ourselves.” The levy, introduced in 2021, is a “own resources” mechanism whose proceeds go into the EU budget. Under the rules, member states must pay €0.80 to the EU for every kilogram of plastic packaging sold that is not recycled.

Macron has asked his government to step up efforts through “concrete measures” to achieve the 2030 recycling target. By then, 55% of plastic packaging must be recycled. France is considering two main strategies: first, improving the collection system to recycle an additional 225,000 tons of plastic per year; and second, promoting reuse.

Eastman’s methanolysis recycling facility in Tennessee earns ISO 59014 certification

Most of the polyester waste, such as plastic packaging collected from the streets that is difficult to recycle, ultimately ends up being landfilled or incinerated. This has long been a major shortcoming in the physical recycling system.

Eastman’s methanolysis recycling facility located in Kingsport, Tennessee, directly addresses this industry pain point. At present, the site has already achieved this throughSCS Global Services CompanyAfter review, successfully obtained ISO 59014 certification. This certification is valid until March 1, 2029, during which annual surveillance audits will be conducted to ensure compliance with material traceability.

Malaysia hopes to reduce its dependence on imported plastics and PET.

On May 20, Malaysia’s Deputy Minister of Investment, Trade and Industry, Sim Chee Keong, said at an exhibition that Malaysia must strengthen the resilience of its local supply chain and develop its recycling industry, rather than relying entirely on imported plastics and polyethylene terephthalate (PET). He pointed out that conflicts in the West Asia region have triggered supply disruptions, causing costs to rise for local recycling companies, manufacturers, and factories that depend on imported plastics and PET. “We can no longer rely on imported materials from abroad; we must increase domestic production capacity. This exhibition is crucial for cooperation between local recyclers and producers,” he said.

Novvia Group Acquires APC Packaging, Continues to Strengthen Its Beauty Packaging Business

Novvia Group acquires APC Packaging, expanding its beauty packaging business lineup. Following a series of recent strategic acquisitions, it further strengthens its presence in the skincare and cosmetics market.

This company, located in Fort Lauderdale, Florida, has mature experience in the sustainable high-end packaging sector and will empower Novvia's continuously expanding consumer goods business segment.

Novvia Group, a global company backed by investment firm Kelso & Company and focused on the distribution of rigid packaging containers and life sciences packaging, has completed its acquisition of APC Packaging. Headquartered in Fort Lauderdale, Florida, APC Packaging specializes in premium, sustainable, end-to-end beauty packaging solutions. The financial terms of the transaction were not disclosed. The acquisition further strengthens Novvia’s market position in the premium beauty and personal care packaging sector.

Kenvue partners with Greyparrot to accelerate the transformation of circularity in medical packaging using AI technology.

Healthcare giant Kenvue has partnered with Greyparrot to launch a global collaboration, leveraging artificial intelligence to accelerate the transition toward circular packaging.

Both parties officially announced the cooperation on May 20, leveraging Greyparrot's Deepnest intelligent platform to help Kenvue move beyond just theoretical concepts.Recyclable DesignConceptualize and establish an empirical basis for judgment based on actual measurement data from a real recycling system.

This collaborative project will assess the real-world recyclability performance of the packaging of major consumer brands under its umbrella, including Tylenol, Neutrogena, Listerine, Aveeno, and Band-Aid, within large-scale commercial recycling sorting facilities.

Overseas Macro Market:

[After four years of negotiations, the UK has reached a trade agreement with Gulf countries] The UK has signed a long-awaited trade agreement with the Gulf Cooperation Council amid escalating geopolitical tensions and economic pressures, deepening relations with these oil-rich nations. The signing of this free trade agreement marks the end of four years of negotiations between the UK and the GCC. The GCC member countries include Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain. "The Gulf countries are important economic partners for us, and this agreement will deepen our relationship, enhance mutual trust, and open up new opportunities for trade and investment," said UK Prime Minister Starmer.

Japanese super-long-term government bond yields fall as investors remain optimistic that the U.S. and Iran may reach an agreement

Japanese super-long-term government bond yields fell as investor optimism remained high that the US and Iran may reach an agreement to end hostilities. Japan’s 20-year government bond yield fell 3.5 basis points to 3.705%; the 30-year government bond yield fell 6 basis points to 4.04%; and the 40-year government bond yield fell 7 basis points to 4.25%.

According to a CBS report on the 20th, two anonymous U.S. officials said that the Trump administration has begun drafting military action plans targeting Cuba, and U.S. intelligence agencies are also studying Cuba’s possible response to U.S. military operations.

[JPMorgan CEO Dimon: Interest rates could rise sharply, and inflation may become so high that people are unwilling to hold long-term securities] JPMorgan CEO Jamie Dimon said that interest rates could rise substantially from current levels, a warning sign for bond investors as yields hit multi-year highs. He said rates could go much higher than they are today. We may have moved from an era of excess savings to one of insufficient savings. I don’t know when the world will start to fear this, but the shock will come when inflation becomes so high that people no longer want to hold long-term securities.

[UAE’s oil pipeline bypassing the Strait of Hormuz nearly half completed] Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company of the UAE, said on the 20th that the UAE is building an east-west oil pipeline that bypasses the Strait of Hormuz. About 50% has been completed, and it is expected to be completed and put into operation by 2027.

Price Information:

The central parity rate of the RMB against the US dollar is reported at 6.8349, an increase of 48 points; the previous trading day's central parity rate was 6.8397, the official closing price of the previous trading day was 6.8060, and the night session price from the previous day closed at 6.7972.

[Upstream Raw Material USD Market Prices]

On May 20, ethylene CFR Northeast Asia was stable at USD 1,100/ton, while CFR Southeast Asia was at USD 1,170/ton.

The FOB price of propylene in Northeast Asia stabilized at 1,230 USD/ton in South Korea, and the CFR price stabilized at 1,250 USD/ton in China.

North Asia refrigerated cargo CFR: propane USD 970–976/ton; butane USD 1,070–1,076/ton.

The import price of South China frozen goods in June is as follows: propane $982-992/ton; butane $1032-1042/ton.

Taiwan refrigerated cargo CIF prices: propane at USD 970–976/ton; butane at USD 1,070–1,076/ton.

[LLDPE USD Market Price]

Film: USD 1,330/ton (CFR Huangpu);

[HDPE USD Market Price]

Film: US$1,330/ton (CFR Huangpu);

Hollow: USD 1,400/ton (CFR Yantian);

Injection molding: 1380 USD/ton (CFR Yantian);

[LDPE USD Market Price]

Film: US$1,660/ton (CFR Huangpu);

[PP USD Market Price]

Homopolymer: USD 1,400/ton (CFR Huangpu);

Co-polymer: $1560/ton (CFR Nansha);

Membrane material: $1630/ton (CFR Huangpu);

Transparent: US$1,580/ton (CFR Huangpu).