U.S. Threatens to Cut Off Aircraft Parts Supply to China! Oil Prices Rebound and Close Higher, Domestic Plastic Futures See Slight Increase

I. Overnight Crude Oil Market Dynamics

The pressure brought by U.S. tariff and trade policy is expected to ease, combined with ongoing geopolitical instability, leading to a rise in international oil prices. NYMEXCrude oil futuresThe 11 contract rose by $0.30/barrel to $57.82, a month-on-month increase of +0.52%; the ICE Brent crude oil futures for the 12 contract rose by $0.31/barrel to $61.32, a month-on-month increase of +0.51%. China's INE crude oil futures for the 2512 contract fell by 2.9 to 436.2 yuan/barrel, with a night session increase of 2.8 to 439 yuan/barrel.

Future Market Forecast

On Tuesday, oil prices edged up slightly, but this modest increase came after a night of intense volatility. Just as the need for a correction of the oversold condition in oil prices began to emerge, the market experienced a significant emotional upheaval. On Tuesday night, the precious metals market experienced a sharp dive, with gold plummeting by 6% at one point, marking the largest single-day drop in this super bull market, while silver plunged more than 8% at one point. The dramatic market sentiment fluctuations swept across commodities, and the rebound in oil prices was also noticeably affected, experiencing intense volatility from a substantial intraday rebound to a swift plunge. However, oil prices ultimately climbed again and closed higher. The market has been curious about how the high gold-to-oil ratio would correct itself, and it seems the market has chosen to let gold retreat first.

2. Macroeconomic Trends

1、Citi turns bearish on gold prices, expecting them to fall to $4,000 within the next three months.

2. OpenAI: Launches ChatGPT Atlas, an AI-driven web browser built on ChatGPT.

In September, Canada's core inflation indicators rose across the board, slightly reducing the probability of a rate cut by the Bank of Canada in October.

4、According to reports, Europe and Ukraine are planning...The point of the Russia-Ukraine peace plan is to negotiate based on the current front lines.Trump stated that he has not yet made a decision on the Russia-Ukraine issue.

5、Foreign media: Russia reiterated its stance of full control over the Donbas to the United States last weekend.European leaders from multiple countries issued a joint statement supporting the immediate freezing of the current front line in Ukraine.

6. According to The Information: NVIDIA is in talks to provide a loan guarantee for OpenAI.

7. Reuters Survey:The Federal Reserve is expected to cut interest rates two more times this year.The interest rate path in 2026 is highly uncertain.

8Trump stated that he will visit China early next year. The Ministry of Foreign Affairs responded: There is currently no information available.

Minister of Commerce Wang Wentao held a video conference with Maroš Šefčovič, the European Commission's Commissioner for Trade and Economic Security.

10、Wang Wentao had a conversation with the Dutch Minister of Economic Affairs, Micky Adriaansens, where they exchanged views on issues including Nexperia.

The Ministry of Commerce held a special session for policy interpretation at a roundtable meeting for foreign-funded enterprises: Appropriately approving compliant trade to maintain the stability of global industrial and supply chains.

The U.S. side threatens to cut off the supply of aircraft parts to China, to which the Ministry of Foreign Affairs responds: Tariff wars and trade wars do not serve the interests of either party.

3. Early Morning Dynamics of the Plastic Market

Oil prices rebound and close higher! Overnight domestic plastic futures main contracts saw slight increases in some areas.

The plastic 2601 contract was quoted at 6881 yuan/ton, up 0.17% compared to the previous trading day.

The PP2601 contract reported 6,581 yuan/ton, up 0.14% compared to the previous trading day.

The PVC2601 contract is quoted at 4696 yuan/ton, down 0.06% from the previous trading day.

The styrene 2511 contract is quoted at 6,447 yuan/ton, up 0.09% from the previous trading day.

Section 4: Market Forecast

PE: The current PE market is experiencing increased pressure on the supply side, compounded by a lack of effective support on the demand side, leading to a noticeable imbalance between supply and demand forces. On one hand, a 300,000-ton PE plant by Zhejiang Petrochemical is expected to resume production today, directly increasing the market's spot supply. Meanwhile, petrochemical inventories remain at high levels, ensuring ample market supply, both of which intensify the pressure on the supply side. On the other hand, with the "Double Eleven" shopping season approaching, there is some expectation of increased demand for downstream products. However, this demand remains at the "expectation stage," and the willingness of downstream companies to follow through with purchases is insufficient, with most maintaining a wait-and-see attitude. This makes it difficult for the demand side to effectively support the market. Additionally, the market has not yet seen clear bullish or bearish signals, further reinforcing participants' cautious sentiment. Overall, in the short term, the polyethylene market is expected to exhibit a weak and stable trend.

PP: The current PP market is facing a complex situation with both bullish and bearish factors. On the positive side, the continuation of U.S. sanctions on oil-producing countries and the uncertainty of geopolitical situations provide some cost support for the PP market. Meanwhile, the Fourth Plenary Session of the Central Committee is being held, and there is strong market expectation for policy support, which may also have a positive impact on the market. However, the bearish factors in the market should not be ignored. OPEC+ maintains its stance on increasing production, leading to a significant drop in international crude oil futures prices, weakening the cost support for PP. The global economy is underperforming, resulting in dull downstream demand, and downstream PP factories generally show low purchasing enthusiasm. In addition, the destocking pace of the two oil companies is slow, resulting in significant supply-side pressure, and Shaoxing Sanyuan's PP plant, with a capacity of 200,000 tons, is planning to shut down today, which will reduce market supply to some extent but is unlikely to change the overall loose supply pattern. Overall, in the short term, the polypropylene market is expected to maintain a weak operation trend. Although there are positive policy expectations, market prices are unlikely to stabilize until actual demand shows significant improvement. However, if the subsequent policy support is strong, it may boost market sentiment to some extent. It is essential to focus on the implementation of policies and changes in supply and demand.

PVC: From the supply side, as PVC facility maintenance gradually concludes, the supply volume continues to recover to a high level. On the demand side, no significant improvement is observed as both the futures and spot markets remain at low levels. Traders' basis quotations are largely stable, with some minor adjustments, but downstream purchasing enthusiasm is low, resulting in sluggish spot transactions. On the cost side, the ex-factory price of calcium carbide has been slightly raised, while oil prices have fallen to their lowest level since early May due to increased investor concerns about a global oil supply surplus, and the worsening U.S.-China trade tensions further exacerbate concerns about economic slowdown and weak energy demand. Currently, there are few guiding factors from policy, news, or supply and demand levels. Overall, it is expected that the PVC spot market will continue to adjust at low levels in the short term.