After Volatile Swings, Oil Prices End Higher; Plastic Futures Edge Up Across the Board

1. Crude Oil Market Dynamics

On September 2nd, the ongoing Russia-Ukraine conflict has brought potential supply risks, coupled with the continuation of U.S. sanctions on certain oil-producing countries, leading to an increase in international oil prices. The NYMEX crude oil futures for the October contract rose by $1.58 to $65.59 per barrel, a 2.47% increase from the previous period; the ICE Brent crude futures for the November contract increased by $0.99 to $69.14 per barrel, a 1.45% increase from the previous period. China's INE crude oil futures for the 2510 contract rose by 6.2 to 489.8 yuan per barrel, with a night session increase of 5.6 to 495.4 yuan per barrel.

Market Outlook

On Tuesday, oil prices continued to surge with a strong bullish candlestick. Behind this sharp rise was a turbulent wave of volatility, indicating that more influencing factors are affecting the crude oil market, and that oil price trends are facing an increasingly complex situation. Such movements once again let investors experience the roller-coaster nature of an uncontrollable market. The intraday fluctuations reflect the current instability in the oil market, especially since the final surge in oil prices was driven by a broader market rebound, while the inherent momentum was relatively limited. Interestingly, while oil prices rose, the Brent time spread weakened significantly—a divergence that is thought-provoking. Meanwhile, European diesel saw notable gains due to Houthi attacks on an Israeli oil tanker. On the geopolitical front, issues like the Middle East (Yemen’s Houthis), Russia-Ukraine tensions, and on the macro front, European bonds and US tariffs, are all exerting a complex influence on the market. The oil market is once again entering a relatively chaotic phase, which is expected to keep producing volatile swings. It is advisable to patiently wait for clearer developments and participate cautiously.

Section 2: Macroeconomic Market Trends

Donald Trump: An emergency meeting will be held on Wednesday regarding the tariff ruling. An appeal to the Supreme Court could be filed as early as Wednesday. If the tariff appeal is rejected, the tariffs will have to be withdrawn. If the tariff ruling is unfavorable, trillions of dollars will have to be refunded. The Supreme Court will be urged to expedite the decision. The stock market is down because it needs the tariff policy.

Concerns about the UK's fiscal situation, among other factors, have weighed on the UK bond market.The yield on 30-year UK government bonds has risen to its highest level since 1998, and the pound has experienced a sharp decline.。

3、Officials from Japan's ruling Liberal Democratic Party have successively expressed their intention to resign.Prime Minister Shigeru Ishiba apologized for the Liberal Democratic Party’s defeat in the recent House of Councillors election.

China has decided to implement a trial visa-free policy for holders of ordinary passports from Russia from September 15, 2025 to September 14, 2026.

In August, the China Passenger Car Association reported that the wholesale sales of new energy passenger vehicles by manufacturers nationwide reached 1.3 million units, a year-on-year increase of 24%.

3. Plastic Market Trends

Overnight international oil prices rose, and the main plastic futures contract edged up.

The plastic 2601 contract is quoted at 7,278 yuan/ton, up 0.23% from the previous trading day.

The PP2601 contract is quoted at 6,974 yuan/ton, up 0.30% from the previous trading day.

The PVC2601 contract was quoted at 4,920 yuan/ton, up 0.57% from the previous trading day.

The styrene 2501 contract is quoted at 7,018 yuan/ton, up 0.72% from the previous trading day.

4. Today's Market Forecast

In the short term, the support from the cost side has weakened for PE. On the supply side, some enterprises are undergoing short-term maintenance, resulting in little overall change in supply, while inventory has slightly declined. On the demand side, the downstream is gradually entering the traditional peak season, and orders for product enterprises have somewhat recovered. Therefore, it is expected that the polyethylene market will primarily experience narrow fluctuations today.

PP: From the supply side, the commissioning of two new units in Daxie, along with reduced maintenance of existing units, has further increased supply pressure. The market atmosphere has not significantly improved with the arrival of the peak season, as the increase in downstream orders is limited and factories have insufficient willingness to restock. The future trend will largely depend on whether downstream demand can maintain a high growth rate. In the short term, the market is expected to fluctuate mainly around 6800-7050 yuan/ton.

PVC: The PVC spot market remains in a stalemate, with the spot fundamentals showing a slight increase in supply expectations. Additionally, new production capacities continue to be launched this month, and output is expected to maintain an upward trend. Domestic demand is anticipated to pick up, while exports are focused on fulfilling previous orders. The industry inventory still faces pressure from accumulation. Short-term cost bottom support remains strong, coupled with the impact of industrial policies on cost expectations. Futures prices are expected to remain firm. It is forecasted that the cash price for five-type carbide-based PVC in the East China region will be in the range of 4650-4780 yuan/ton.