U.S. Threatens Tariff Increase on China, Ministry of Commerce Responds! Crude Oil Breaks and Plummets, Plastic Market Under Pressure

1. Overnight Crude Oil Market Dynamics

Weighed down by a dimmed demand outlook, international crude oil prices plunged.WTI Crude OilContinuing to decline, it fell below the $58 mark, ultimately closing down 5.32% at $57.879 per barrel, hitting a new low in five months and marking the largest single-day drop since June 23.Brent Crude OilFinally closed down 4.48% at $62.04 per barrel.

Future Market Forecast

On Friday, WTI crude oil plummeted, ultimately falling over 5% and breaching the $60 mark. Due to Trump's remarks, core assets such as the stock market, crude oil, and copper all dropped more than 4%, marking a tsunami impact on the financial market from great power rivalry after a six-month interval. Over the weekend, Trump's actions made investors realize the contradictions in great power competition, as the gradual reduction of interdependence in Sino-U.S. relations is an irreversible trend. However, regarding Trump's renewed tariff threats on Friday, the market generally expects this to be similar to the tariff battle in April, with a short-term escalation likely followed by a potential de-escalation. Given that Trump still holds expectations for a meeting with Chinese leaders at the end of the month, there remains a possibility of fluctuations in economic and trade frictions.

The question of how the crude oil market will digest the pressure of oversupply in the fourth quarter remains a major uncertainty. With oil prices easily falling below the $60 mark again, the low point from the first half of the year has become an immediate target, increasing the likelihood of refreshing the year's low. For those considering bottom-fishing, especially for China, which relies heavily on imports, it is certainly necessary. However, in terms of market dynamics, the opportunity for oil price increases should be discussed only after this current decline has run its course. Additionally, factors such as geopolitical developments and macro-level great power competition will continue to bring disruptions to the market. As the oil price center shifts downward, it will maintain a high volatility characteristic, so attention to timing is essential.

II. Macroeconomic Trends

The U.S. Bureau of Labor Statistics will.The September CPI report will be released on October 24 at 8:30 AM (Beijing time 8:30 PM).。

Gaza Situation - ①Hamas: Will fully retaliate if Israel resumes military actions.A Hamas official stated that the faction is prepared to relinquish control over the Gaza Strip.

The Sharm El Sheikh Peace Summit will be held in Egypt on the 13th, and it is reported that both Hamas and Israeli representatives have stated they will not attend.

Trump will visit Cairo and Jerusalem to celebrate the ceasefire and hostage release agreement.

3、Pakistan and Afghanistan exchange fire in the border area.Pakistan closes border crossings with Afghanistan. Trump: I've heard there is a "war" between Pakistan and Afghanistan, and I will do my best to resolve the issue.

4. Iranian Officer: Whether to block the Strait of Hormuz depends on the extent of external pressure on Iran.

5、The US threatens to impose a 100% tariff on China.Ministry of Commerce: China's position on the trade war is consistent; we do not want to fight, but we are not afraid to fight.

6. Response from the Ministry of CommerceCharging special port fees for American vesselsThe relevant countermeasures aim to maintain a fair competitive environment in the international shipping and shipbuilding markets, and are considered an act of "self-defense."

The Ministry of Commerce answered reporters' questions regarding recent Chinese foreign trade policies and measures: China's export controls do not prohibit exports, and applications that meet the regulations will be granted approval.

3. Plastic Market Dynamics

International oil prices have plunged, and the main contracts of plastic futures collectively closed lower overnight.

The plastic 2601 contract is quoted at 7045 yuan/ton, down 0.40% from the previous trading day.

The PP2601 contract is quoted at 6721 yuan/ton, down 0.43% from the previous trading day.

The PVC2601 contract is quoted at 47,136 yuan/ton, down 0.40% from the previous trading day.

The styrene 2511 contract is quoted at 6758 yuan/ton, down 0.43% from the previous trading day.

Section 4: Market Forecast

PP: It is expected that the market will weakly retreat in the near term to deplete inventory, followed by a rebound opportunity. The price of wire drawing in East China is expected to be mainly around 6600-6750 yuan/ton.

After the holidays, there is an expectation of inventory accumulation in the market. The market may adopt a strategy of trading price for volume, leading to relatively pressured prices, which are likely to fluctuate downward, with an expected range of about 20-100 yuan/ton.

PVC: Although there are increasing maintenance activities in downstream PVC, the overall production capacity remains high, and market supply capability is still sufficient. Domestic demand is expected to remain stable, while foreign trade faces policy-related instability. Industry inventory is expected to continue the trend of accumulation, putting pressure on the spot market price. In terms of policy, the short-term outlook is not favorable, combined with weak cost fluctuations, leading to low transaction volumes in the PVC spot market, with prices remaining within a range of fluctuations.