U.S.-China Relations: Ministry of Commerce Issues Statements; Oil Market Declines as WTI Crude Falls Below $60; Plastic Market Sees Red

I. Crude Oil Market Dynamics

On November 5th, due to the increase in U.S. commercial crude oil inventories and ongoing market concerns about oversupply risks, international oil prices fell. NYMEX crude oil futures for the December contract fell by $0.96 per barrel to $59.60, a decrease of 1.59% compared to the previous period; ICE Brent oil futures for the January contract fell by $0.92 per barrel to $63.52, a decrease of 1.43% compared to the previous period. China's INE crude oil futures for the 2512 contract fell by 3.1 to 462.1 yuan per barrel, and the night session saw a further drop of 4.4 to 457.7 yuan per barrel.

Market Outlook

From the current market performance, it can be seen that although investors have adjusted their assessments of future oil price movements, the sanctions against Russia and OPEC+'s decision to pause production increases in the first quarter of next year have somewhat alleviated expectations of oversupply. However, the overall judgment remains that the crude oil market will continue to face pressure from supply surplus for the foreseeable future, with more emphasis placed on slightly raising the targets for oil price declines. In the short term, the tug-of-war within the oil price range indicates that funds need to observe changes in the supply and demand structure of the crude oil market following the sanctions against Russia, including obtaining guiding information from inventory and physical market supply and demand. From this week's performance in the Middle Eastern market, there has been some cooling, while EIA weekly data shows a rebound in crude oil inventories, but a significant reduction in refined oil inventories, particularly the decline in gasoline inventories, has allowed gasoline to perform better than crude oil. Meanwhile, diesel has been influenced by the European market, making the overall performance of refined oil in the European and American markets significantly stronger than that of crude oil.

However, with the further weakening of the European and American crude oil spreads this week, it indicates a lack of upward momentum for crude oil. If the market experiences an unexpectedly large inventory build-up, it will continue to dampen market confidence and drive oil prices lower. While maintaining a bearish outlook, it is also necessary to be cautious of the potential impact of a possible war risk in Venezuela under the backdrop of geopolitical tensions. Oil prices have not completely escaped the range-bound pattern, but there are signs of weakening in the tug-of-war process. Overall, after the tug-of-war, it is still highly probable that the oil price will be pressured downward within the year. It is recommended to focus on seizing the opportunity to short at highs, and pay attention to timing.

Section 2: Macro Market Trends

On November 4th, Li Chenggang, the International Trade Negotiation Representative and Vice Minister, met with the U.S. Agricultural Products Trade Delegation in Beijing. The two sides exchanged views on China-U.S. economic and trade relations, agricultural products trade, and other topics.

Foreign Ministry spokesperson Mao Ning hosted a regular press conference yesterday. A reporter asked a question stating that recently U.S. Treasury Secretary Besent claimed that China is an unreliable partner, while just a few days ago, U.S. President Trump had concluded and highly praised talks with Chinese leaders. Mao Ning stated that China's policy towards the United States remains stable, and we consistently view and handle China-U.S. relations based on the three principles of mutual respect, peaceful coexistence, and win-win cooperation. At the same time, we are also steadfast in safeguarding our sovereignty, security, and development interests. Maintaining a healthy and stable development of China-U.S. relations is in the fundamental interests of the peoples of both countries and is the general expectation of the international community.

The Customs Tariff Commission of the State Council, based on the recommendation of the Ministry of Commerce, has decided that starting from November 10, 2025, the current anti-dumping duty rate applied to imported non-dispersion shifted single-mode optical fibers originating from the United States will no longer apply to imported related cutoff wavelength shifted single-mode optical fibers originating from the United States.

The spokesperson of the Ministry of Commerce answered questions from reporters regarding the adjustment of the export control list measures, stating that in order to implement the consensus reached during the Sino-US Kuala Lumpur economic and trade consultations, starting from November 10, 2025, export control measures will be lifted for 15 US entities listed in Announcement No. 13 of 2025. Meanwhile, the suspension of related measures for 16 US entities in Announcement No. 21 will continue for another year.

The spokesperson of the Ministry of Commerce answered questions from reporters regarding the adjustment of the unreliable entity list measures, stating that in order to implement the consensus reached during the China-U.S. Kuala Lumpur economic and trade consultations, it has been decided to cease the measures against certain U.S. entities on the unreliable entity list announced on March 4 starting from November 10, 2025, and to continue suspending the related measures announced on April 4 for another year.

The U.S. Supreme Court tariff case debate begins.Chief Justice of the conservatives and others questioned the reasonableness of the tariffs, reducing Trump's chances of winning. Besent remains optimistic about winning the case.

The Democratic Party easily defeated the Republican candidates, winning the gubernatorial elections in Virginia and New Jersey.Trump attributes election loss to government shutdown, again calls for ending "lengthy debates," also says US stocks will hit new highs, expects third-quarter GDP growth of 4.2% or higher.。

3. Plastic Market Dynamics

Overnight international crude oil closed lower, and the main contracts for plastic-related futures were all in the red.

The plastic 2601 contract is priced at 6898 yuan/ton, down 0.20% from the previous trading day.

The PP2601 contract is reported at 6576 yuan/ton, down 0.41% from the previous trading day.

The PVC2601 contract is quoted at 4,685 yuan/ton, an increase of 0.06% compared to the previous trading day.

The Styrene 2601 contract is quoted at 6476/ton, a decrease of 0.83% compared to the previous trading day.

4. Today's Market Forecast

PP: The stocking phase for the Double Eleven shopping festival is nearing its end, but the actual demand is below expectations, and it doesn't significantly alleviate the market's supply-demand imbalance. With the upcoming output from Guangxi Petrochemical's new 400,000-ton facility, the pressure on the supply side is expected to increase, leading to cautious market sentiment. Although it is anticipated that the East China polypropylene market will fluctuate around 6,400-6,550 yuan/ton today.

PE: The inevitability of continued supply recovery has led to strong bearish sentiment in the market. Industries such as agricultural film and packaging, which are in peak season, are expected to continue until early November. Short-term rigid demand for restocking provides strong support, while the decline in some import offers has narrowed and the number of offers has decreased. Multiple factors are limiting the extent of the decline. It is expected that polyethylene prices will slightly decrease by about 10-30 yuan/ton today.

PVC: The fundamentals of the PVC spot market remain stagnant. The scale of maintenance among upstream production enterprises is limited. Although the load of some enterprises has slightly decreased, the overall production is expected to maintain a slight upward trend. Domestic market demand is stable, with an increase in procurement at lower-end prices. Foreign trade exports are currently in a wait-and-see state. From the perspective of supply and demand, there is slight pressure, and the focus of spot prices is trending weaker. Coupled with the recent lackluster support from costs and macro expectations, PVC price ranges continue to dip lower. In the East China region, the cash-in warehouse price for acetylene-based type 5 PVC is fluctuating in the range of 4,520-4,650 yuan/ton. Be wary of policy and other intra-day fluctuations.