Trump Cancels Meeting With Putin, United States (US) Increases Sanctions on Russia! Oil Prices Surge 4%, Plastic Market Rebound Imminent!

I. Crude Oil Market Dynamics

U.S. crude oil futures closed up 3.74% at $59.38 per barrel; Brent crude oil futures rose 3.54% to $63.49 per barrel. U.S. Treasury Secretary Yellen stated that she expects to significantly strengthen sanctions against Russia. Meanwhile, last week, U.S. EIA crude oil inventories decreased by 961,000 barrels, providing positive support for oil prices from both supply and demand sides.

Future Market Outlook

On Wednesday, during the day, SC crude oil took the lead and saw a significant rise, marking the largest single-day gain in October. This is just the beginning. In the early hours, following Trump's announcement of the cancellation of his meeting with Putin in Budapest, the U.S. Treasury increased sanctions against Russia, leading to further rises in oil prices in Europe and the U.S., exceeding 4%. European diesel increased even more, soaring by 7%! The escalation of geopolitical tensions and the upgrade of sanctions against Russia have, to some extent, alleviated the previously persistent pressure of oversupply in the market. This week, a series of positive news has emerged, finally consolidating and contributing to the surge in oil prices on Wednesday. The oil market situation is warming up, maintaining support at this year's low points, and the risk of breaking below those levels has temporarily dissipated. In the short term, the rebound in oil prices is expected to strengthen, but specific market developments need to be monitored for the tangible impacts of sanctions. In the medium to long term, the substantial pressure of oversupply remains significant, and the rebound is still insufficient to alter the bearish outlook for the oil market.

II. Macroeconomic Market Dynamics

According to the latest news from CCTV, on the 22nd local time,The U.S. Treasury Department announced sanctions against two major Russian oil companies, including Rosneft and Lukoil.The U.S. Treasury Department also sanctioned a series of subsidiaries of these two companies in Russia, and any entity that is 50% or more owned, directly or indirectly, by these two companies will be sanctioned.

The EU member states approve the 19th round of sanctions against Russia.

On October 22 local time, Denmark, the rotating presidency of the European Union, announced that EU member states have approved the 19th round of sanctions against Russia. The sanctions include a ban on the import of Russian liquefied natural gas. Additionally, the sanctions impose new travel restrictions on Russian diplomats and include 117 ships from Russia's "shadow fleet" on the list.

Trump says the meeting with Putin in Budapest is canceled.

On October 22, local time, U.S. President Trump stated that he deemed it "inappropriate" to meet with Russian President Putin, so he canceled the meeting with Putin in Budapest. Trump said he believes it is time to impose sanctions on Russia, and he hopes the sanctions will not last too long. Trump mentioned that every conversation with Putin is pleasant, but no progress has been made. Although it seems that both parties are unable to achieve their goals, meetings will be held again in the future.

The Ministry of Industry and Information Technology Holds Expert Symposium on Industrial Economic Outlook

According to a report from the Ministry of Industry and Information Technology on October 22, on October 21, Xin Guobin, a member of the Party Leadership Group and Vice Minister of the Ministry of Industry and Information Technology, presided over an expert symposium on the outlook for the industrial economy in Beijing. The meeting pointed out that 2026 marks the beginning of the "15th Five-Year Plan," and maintaining the stable operation of the industrial economy is a significant responsibility. It is necessary to firmly implement the decisions and deployments of the Central Committee, effectively carry out key tasks in the field of industry and information technology, focus on adapting to demand changes by investing more in services for people's livelihoods, continuously stimulate consumption potential through quality supply, and strengthen comprehensive industry governance. Research should be enhanced to propose precise and effective policy measures, further invigorate market vitality, boost development confidence, enhance endogenous momentum, consolidate the steady and positive trend of the industrial economy, and strive to achieve a good start to the "15th Five-Year Plan."

Shenzhen has released the Action Plan for Promoting High-Quality Development of Mergers and Acquisitions in Shenzhen (2025-2027), aiming to comprehensively improve the quality of listed companies in the jurisdiction by the end of 2027. The plan aims for the total market value of domestic and overseas listed companies to exceed 20 trillion yuan and to cultivate 20 companies with a market value of over 100 billion yuan.

According to the Shanghai Municipal Statistics Bureau, in the first three quarters, Shanghai's GDP was 4.07 trillion yuan, an increase of 5.5% year-on-year. The total output value of industries above designated size grew by 5.7%, and fixed asset investment increased by 6%. Imports and exports amounted to 3.34 trillion yuan, a year-on-year increase of 5.4%, with the growth rate accelerating by 0.9 percentage points compared to the first eight months.

The Beijing Municipal Bureau of Statistics disclosed that in the first three quarters, Beijing's GDP reached 3.84 trillion yuan, with a year-on-year increase of 5.6%. The added value of industrial enterprises above designated size grew by 6.5% year-on-year, fixed asset investment increased by 9%, and total market consumption rose by 0.5% year-on-year.

3. Plastic Market Dynamics

Overnight international crude oil surged by 4%, while domestic chemical products mainly rose in the night session, with the main contracts for plastic-related futures showing slight gains.

The plastic 2601 contract is quoted at 6908 yuan/ton, an increase of 0.57% compared to the previous trading day.

The PP2601 contract reported at 6,598 yuan/ton, up 0.40% from the previous trading day.

The PVC2601 contract is quoted at 4,708 yuan/ton, up 0.19% from the previous trading day.

The styrene 2601 contract is quoted at 6459 yuan/ton, up 0.28% from the previous trading day.

4. Today's Market Forecast

PE: On the supply side, Zhejiang Petrochemical's low-pressure and Lanzhou Petrochemical's high-pressure facilities have restarted, and the impact of maintenance continues to diminish. The restart of Zhenhai's low-pressure facility is expected to be moved forward by 10 days. With the expected increase in supply, the market maintains an active selling attitude. Under the backdrop of increased operations in downstream factories, there is a just-in-time demand support. With both positive and negative factors combined, the market decline might narrow. Overall, considering that the current product prices are already at a relatively low phase, the room for further decline is relatively limited, with a magnitude of 20-80 yuan/ton.

PP: The "15th Five-Year" meeting policy is about to be announced, and market expectations are high, driving a recovery in market sentiment. Upstream maintenance is at a high level, slightly easing supply-side pressure. However, downstream enterprises are not very motivated in production, leading to slow raw material consumption, and prices lack strong upward momentum. It is expected that the market will fluctuate within a narrow range tomorrow, around 6500-6650 yuan/ton.

PVC: In the short term, upstream maintenance of PVC is gradually completing, and the long-term market supply is expected to rise again to a high level, with weekly production estimated to approach 500,000 tons. Additionally, new facilities are gradually entering trial production this month. In the face of increasing upstream supply, domestic market demand remains stable, while northern demand is expected to improve as weather impacts weaken. Exports are also expected to remain positive this month. Overall, the long-term supply pressure is slightly greater than demand, putting downward pressure on spot prices. Macroeconomically, performance in the short term is not promising, only stabilized within a price range during the day, supported by cost expectations in the black products sector. In East China, the cash market price for calcium carbide method PVC is between 4,550 and 4,700 yuan/ton.