International Oil Prices Fall, Plastic Market Weakens Slightly

1. Overnight Crude Oil Market Dynamics

On Sunday evening, as all OPEC+ member countries unanimously agreed on a decision to increase production within 10 minutes, it was decided to increase oil production by 1.65 million barrels per month until August 2026, further solidifying the downward trend in oil prices.

On Friday night, oil prices plummeted, with the decline once approaching 3%, pointing directly to a downward breakout. Ultimately, NYMEX crude oil futures October contract settled at $61.87, down $1.61 per barrel, a decrease of 2.54% compared to the previous session; ICE Brent crude oil futures November contract settled at $65.50, down $1.49 per barrel, a decrease of 2.22%. China's INE crude oil futures contract 2510 fell by 1.3 to 482.3 yuan per barrel, with the night session dropping 10.4 to 471.9 yuan per barrel.

Future Market Outlook

Geopolitical and macroeconomic factors have caused considerable disruptions to oil prices this year, leading to hesitations and fluctuations in investment decisions regarding oil price forecasts. The performance of oil prices this year reflects this, with most sudden fluctuations caused by unexpected geopolitical events or U.S.-initiated policies such as tariffs and sanctions. However, these fluctuations ultimately did not change the overall downward trend of the oil price center throughout the year. This points to the truth that the most crucial factor in the ultimate direction of oil prices is OPEC+'s decision to increase production starting in April, followed by accelerated production increases. This has relegated other factors to secondary importance, with the increased supply pressure being the core driver determining oil prices.

In fact, since the ceasefire in Iran at the end of June, the spread in the crude oil market has been continuously declining from the annual high, and the signs of weakening have become further evident recently. SC crude oil once again led the global crude oil market in breaking downward. Everything points to a downward choice in oil prices under pressure. With OPEC+ deciding to continue increasing production, it is highly likely that oil prices will hit new annual lows for the remainder of the year.

2. Macroeconomic Market Trends

1. August Non-Farm Payrolls: ①The increase in non-farm employment was significantly below expectations, with June's data revised down to negative, marking the first contraction since 2020; the unemployment rate hit a nearly four-year high.② White House economic adviser Hassett: Employment data is expected to be revised upwards. Better data adjustments are needed as the revisions have been consistently large. Expressing doubts about the quality of employment data. Currently, there are no plans to reform the Federal Reserve. ③ Senate Democratic Leader Schumer, citing the non-farm payroll report, stated that Democrats will push for a vote in the coming weeks to overturn Trump's import tariffs. ④ Trump: Powell should have cut interest rates a long time ago. ⑤ U.S. Labor Secretary Dremer: The Federal Reserve should have taken action earlier. ⑤ U.S. Treasury Secretary Besent:The revised 2024 employment positions may decrease by 800,000.

2. Federal Reserve: ①Trump announced the final candidates for the Federal Reserve Chair: Hassett, Walsh, and Waller are shortlisted, while Treasury Secretary Besent voluntarily withdrew from the selection.② The U.S. Senate Republicans plan to amend the rules to expedite the confirmation of Federal Reserve Board nominees.

3、Trump: Preparing to impose second-stage sanctions on Russia.

4. President Trump signed an executive order adjusting the scope of tariff policy implementation. The executive order stipulates that after reaching a framework agreement or final agreement with foreign trade partners, the United States can adjust tariffs based on the agreement, including reducing reciprocal tariffs on certain goods to zero. However, before the final agreement is signed, the tariff scope is usually not narrowed, nor are tariffs related to Section 232 (tariffs on steel and aluminum derivatives) modified. Goods eligible for zero reciprocal tariffs include products that cannot be produced in the United States or are insufficiently produced to meet domestic demand, specific agricultural products, aircraft and parts, as well as non-patented items for pharmaceutical applications.

5、Japanese Prime Minister Shigeru Ishiba announces resignation from the position of President of the Liberal Democratic Party.Will not participate in the Liberal Democratic Party leadership election.

The details of the US-Japan trade agreement have been revealed: a $550 billion investment will be decided by Trump, and Japan is given only a 45-day period to implement it.

7、OPEC+ member countries agreed to increase oil production by 137,000 barrels per day in October.

The spokesperson of the Ministry of Foreign Affairs announced: At the invitation of Brazilian President Lula, President Xi Jinping will attend the BRICS Leaders' Online Summit via video in Beijing on September 8 and deliver an important speech.

According to statistics from the State Administration of Foreign Exchange, as of the end of August 2025, China's foreign exchange reserves stood at $3,322.2 billion, an increase of $29.9 billion from the end of July, representing a rise of 0.91%. The steady progress and strong resilience and vitality of China's economic performance provide support for maintaining the basic stability of the foreign exchange reserves scale.

3. Plastic Market Dynamics

On Friday, international crude oil prices declined, and futures prices for plastic-related products also showed a weak trend.

The plastic 2601 contract is quoted at 715 yuan/ton, down 0.26% from the previous trading day.

The PP2601 contract is reported at 6,939 yuan/ton, down 0.17% from the previous trading day.

The PVC2601 contract is quoted at 4,866 yuan/ton, down 0.41% from the previous trading day.

The styrene 2510 contract is quoted at 7,050 yuan/ton, down 0.20% from the previous trading day.

4. Today's Market Forecast

PP: Currently, the demand side is slowly recovering. Existing orders from downstream factories are sustaining operations, but the recovery of new orders will take some time. Although the number of recent maintenance shutdowns has increased again, there is still a gap between the rate of demand growth and the increase in supply. The spot market is weak, compounded by the decline in crude oil prices, which weakens cost support. The market lacks strong drivers, and it is expected that the polypropylene market will experience fluctuations and consolidation today.

In the short term, on the supply side, there is an increase in enterprise maintenance, while the import of spot resources has increased, leading to a possible rise in inventory. On the demand side, downstream is gradually entering the traditional peak season, and product companies' orders have somewhat rebounded, but no significant increase is observed. It is expected that the polyethylene market may mainly experience narrow fluctuations today.

PVC: The short-term maintenance impact is expected to cause a slight decrease in production month-on-month before rebounding. Combined with limited changes due to new production capacity, the domestic demand peak season is arriving, yet export policy restrictions limit the increase. Overall, the supply-demand contradiction is expected to slightly decrease, and the industry's inventory accumulation speed is expected to slow down. In the short term, cost support is relatively strong, and fluctuations in the PVC spot market are expected to be limited.