International Oil Plummets, Plastic Futures Drop

I. Overnight Crude Oil Market Dynamics

5/6: A report suggests that the US and Iran are about to reach a memorandum of understanding to formally end the conflict, causing a sudden easing of geopolitical tensions and a drop in international oil prices. NYMEX crude oil futures for June fell 7.19 dollars per barrel to 95.08, a decrease of 7.03% from the previous session; ICE Brent crude oil futures for July fell 8.60 dollars per barrel to 101.27, a decrease of 7.83% from the previous session. China's INE crude oil futures for June fell 16.8 to 667.3 yuan per barrel, and fell another 34.1 to 633.2 yuan per barrel during the night session.

Market outlook

Although U.S.-Iran negotiations have shown some positive signals, challenges to reaching an agreement remain, which is why oil prices, after a sharp drop, have recovered nearly half of their losses—awaiting the final outcome.The top priority at present is to guard against the risk of a sharp oil price decline resulting from a U.S.-Iran agreement.The U.S.-Iran negotiations are expected to resume as early as next week in Islamabad. When asked about the specific timeframe for reaching an agreement, Trump estimated “one week.”

II. Macroeconomic Market Dynamics

2. Federal Reserve - Al-Musalam: There are plausible scenarios indicating,The interest rate needs to remain stable over a period of time.Risk is shifting towards inflation. Gursby: The impact of the Iran war is more like an inflation shock.

2. Middle East situation - ① U.S. media Axios reports thatThe U.S. and Iran are close to reaching a one-page, 14-point memorandum aimed at ending the conflict and opening a 30-day negotiation window.Iranian media stated that parts of the report are speculative. The Iranian Ministry of Foreign Affairs said it is assessing the U.S. view on Iran’s 14-point proposal and has not yet responded.

② Trump: If Iran complies with its obligations, Operation "Epic Wrath" will end; otherwise, bombing will resume. The U.S. and Iran held "very productive" talks within the past 24 hours. The conflict with Iran is "very likely to end," and both sides are close to reaching an agreement. There is no deadline set for resolving the Iran issue, and the expected timeframe for finalizing a deal is within one week.

③ It is reported that U.S. Special Envoy for Middle East Issues Witkoff recently held indirect talks with Iranian officials.

A senior Iranian official said Axios' report is more of a U.S. wish list than reality.

The French aircraft carrier "Charles de Gaulle" is heading to the Red Sea to prepare for escort missions in the Strait of Hormuz.

3、Wang Yi Holds Talks with Iranian Foreign Minister Araghchi。

The Foreign Ministry: Both China and the U.S. sides are maintaining communication regarding President Trump's visit to China.

5. The Ministry of Foreign Affairs stated that China will continue its efforts to ease tensions across the Taiwan Strait and will also continue to fully safeguard the safety of Chinese-funded vessels and Chinese crew members.

III. Plastic Market Dynamics

International oil prices plummeted, and plastic futures turned uniformly green.

Plastic quoted at 8270 RMB/ton, down 2.40% from the previous trading day.

PP was quoted at 8712 yuan/ton, down 2.21% from the previous trading day.

PVC is quoted at RMB 5,220 per ton, down 1.62% from the previous trading day.

Styrene quoted at 9561 yuan/ton, down 3.21% from the previous trading day.

Four, Today's Market Forecast

PP: With more maintenance shutdowns and load reductions, the operating rate continues to decline, strengthening the support from the supply side. However, the downstream sector has a low acceptance of high-priced goods and is adopting a wait-and-see attitude. It is expected that the prices of drawing filament in East China will be strong and stable today.

PE: In the short term, numerous units are scheduled for shutdowns in early May. Although overseas offers have increased compared to earlier periods, arrivals at ports remain limited, providing supply-side support. Post-holiday restocking sentiment persists on the demand side, with the market primarily focused on absorbing recent price increases.

PVC: After the holiday, the spot supply and demand of PVC remain weak on both sides. The domestic market's replenishment demand after the holiday is weak, but production reduction and accelerated maintenance, combined with continued strong exports, have kept the expectation of inventory reduction in the industry, and the market cost support remains strong. PVC prices remain stable, and short-term prices are expected to remain in a range fluctuation, with a slight increase test.