[Special Plastics Monthly Report] Macro/Oil: Oil Game Intensifies, January Macro Environment Still Dominated by "Weak Reality, Strong Expectation"

[Macroeconomic Section]

In December 2025, both domestic and international macroeconomic conditions are characterized by "weak domestic demand, intensified external pressure, and policy support." Domestically, downward economic pressure has become more apparent. From January to November, the cumulative year-on-year growth rate of fixed asset investment declined to -0.8%, with real estate development investment dropping by 10.3%, continuing to exert a drag effect. The growth rate of total retail sales of consumer goods fell to 3.9%, indicating weak consumer willingness. Although the Central Economic Work Conference in December set the tone to "enhance macroeconomic regulation," emphasizing "expanding domestic demand" and "resolving real estate risks," while proposing to plan a series of major projects to support the current economic operation, specific fiscal tools (such as the scale of special government bonds and detailed real estate relief measures) have yet to be implemented, and the market remains cautious about the effectiveness of these policies. The Loan Prime Rate (LPR) has remained unchanged for the seventh consecutive month (1-year at 3.0%, 5-year at 3.5%), indicating that monetary policy is maintaining a cautious balance between stabilizing the exchange rate and expanding credit.

Overseas, although the Federal Reserve maintained interest rates at its December meeting, the dot plot suggested three rate cuts by 2026, reinforcing the expectation of global liquidity easing. However, the stronger-than-expected U.S. retail data for November, combined with a rebound in the manufacturing PMI, weakened the recession trade logic. More noteworthy is the sharp rise in geopolitical risks: the U.S. seized Venezuelan oil tankers consecutively in early December, the EU announced an extension of sanctions against Russia until July 2026, the Russia-Ukraine conflict shows no signs of easing, and the Middle East situation is tense due to Israel's potential strike plans against Iran. Amid multiple disruptions, the stability of the global supply chain is once again being tested, driving up risk aversion sentiments.

Looking ahead to January 2026, the pace at which domestic policies are implemented will become a key variable. If special bonds are issued in advance and funds for the three major real estate projects are accelerated, it may temporarily boost demand in infrastructure and completion sectors, benefiting downstream PP/PE industries (such as pipe and profile materials). However, most terminal factories will enter holiday mode before the Spring Festival, limiting actual purchasing momentum. In overseas markets, attention should be given to whether OPEC+ will adjust its production strategy at its January meeting and whether the U.S. will intensify tariff policies against China due to the upcoming elections. Overall, the macro environment in January will be dominated by "weak reality, strong expectations," making it difficult for the polyolefin market to show a clear trend and more likely to exhibit a volatile pattern.

[Crude Oil Section]

In December 2025, the international crude oil market experienced a rebound driven by geopolitical risk premiums, but upward momentum was consistently constrained by the fundamental pressure of oversupply. At the beginning of the month, WTI and Brent were approximately $55.5 per barrel and $60 per barrel, respectively. Subsequently, due to a series of escalating events such as the U.S. seizure of a Venezuelan oil tanker, Ukraine's attack on a Russian Caspian oil platform, and Israel's plans to strike Iran, concerns over supply disruptions quickly intensified. As of December 27, the main WTI contract settled at $58.01 per barrel (a monthly increase of 4.6%), Brent settled at $62.07 per barrel (a monthly increase of 3.5%), and INE crude oil simultaneously rebounded to 441.3 yuan per barrel. It is noteworthy that this round of increases was mainly driven by risk premiums — the IEA projects a global crude oil surplus of 2.3 million barrels per day in 2025, expanding further to 3.8 million barrels per day in 2026, indicating that the fundamentals have not substantially improved.

Structurally, the Brent time spread has significantly strengthened, reflecting disruptions in spot supply in Europe and globally, while the WTI time spread has remained almost unchanged, highlighting the relaxed supply and demand within the United States. Meanwhile, the price of Russian Urals crude oil, affected by sanctions, has fallen to $34 per barrel, and the ESPO discount has widened to over $10. The global crude oil market is exhibiting a "hot and cold" split pattern.

Looking ahead to January 2026, the crude oil trend will depend on the interplay between geopolitical risks and fundamentals. On one hand, OPEC+ has clearly announced a pause in production increases for Q1 2026, and Saudi Arabia has significantly lowered its official selling price to Asia to maintain market share, indicating a potential marginal tightening on the supply side. On the other hand, the start of fuel stocking demand for China's Spring Festival travel and the issuance of import quotas to independent refineries may temporarily support Asian buying demand. However, the continuous decline in the number of U.S. shale oil rigs (down 8% year-on-year) and the capacity release from non-OPEC countries (Brazil, Guyana) will continue to constrain the upward space for oil prices. Overall, it is judged that crude oil in January may fluctuate within the $60–$65 per barrel range, providing limited support for polyolefins on the cost side, making it difficult to drive a trend increase, and more likely to cause short-term market sentiment disturbances.