[Monthly Report on Plastics] Macro/Oil: Global Macro Economy Continues Divergent Pattern, Crude Oil Likely to Maintain Wide Fluctuation in December

[Macroeconomic Section]

In November, the global macroeconomic landscape continued to show a differentiated pattern under the persistent pressure of high interest rates. On the overseas front, US economic data presented a mixed picture; while the labor market remained resilient, the manufacturing PMI continued to be in contraction territory, coupled with a decline in consumer confidence, which reinforced market expectations of the Federal Reserve's "higher for longer" stance. The European economy, on the other hand, is mired in difficulties, with core countries like Germany experiencing sluggish growth, and the European Central Bank struggling to balance anti-inflation measures with economic stability. Against this backdrop, the outlook for global demand is overshadowed, placing continuous pressure on commodity markets.

Domestically, the foundation for economic recovery remains fragile. Although the official manufacturing PMI slightly rebounded above the threshold in October, the new orders index showed weak performance, indicating insufficient domestic demand momentum. Real estate investment and sales data continue to decline, becoming a major drag on the economy. In response to this situation, the central government has been intensively releasing signals to stabilize growth. In late November, the State Council executive meeting outlined a package of incremental policies, emphasizing the need to "strengthen macroeconomic regulation" and specifically mentioning the importance of "effectively boosting the capital market." The market widely expects that more specific measures regarding fiscal stimulus, real estate relief, and consumer spending will be introduced during the Central Political Bureau meeting and the Central Economic Work Conference in December. In addition, although the policy guidance on "anti-involution" has not yet been translated into specific details, it has already had a profound impact on market sentiment, directing funds from excess capacity sectors toward high-quality development.

Looking ahead to December, the core variable in the macro environment lies in the pace and intensity of domestic policy implementation. If fiscal measures can effectively take effect, coupled with further optimization of real estate policies, there is hope for a temporary improvement in market pessimism, providing cost support for industrial products. However, the high interest rate environment overseas is unlikely to reverse in the short term, and the trend of weakening external demand will continue to limit the rebound's magnitude. Therefore, the macro environment in December may present a pattern of "domestic easing and external tightening." For the polyolefin market, the interplay between cost support and weak demand will dominate the price range.

[Crude Oil Section]

In November, the international crude oil market exhibited a weak and volatile trend overall. At the beginning of the month, oil prices attempted to rebound driven by optimistic expectations of deeper production cuts from OPEC+. However, weak real demand quickly dampened market enthusiasm. On one hand, global manufacturing activity continued to be sluggish, especially with economic data from China and Europe falling short of expectations, suppressing industrial oil demand. On the other hand, U.S. commercial crude oil inventories have accumulated beyond expectations for several consecutive weeks, highlighting the weakness in domestic demand. The relaxed supply-demand fundamentals have left oil prices lacking upward momentum.

At the same time, negative macroeconomic factors remain persistent. Federal Reserve officials have repeatedly emphasized the necessity of maintaining high interest rates, and a strong U.S. dollar puts pressure on commodities priced in dollars. Geopolitically, although the situation in the Middle East continues to be disruptive, its actual impact on supply has been limited, and the risk premium has not effectively materialized. Throughout the month, the main Brent crude oil contract fluctuated between $72 and $78 per barrel, ultimately closing lower for the month, reflecting the market's uncertainty between reality and expectations.

Looking ahead to December, the crude oil market will enter a key observation window. In the first half of the month, the OPEC+ ministerial meeting will be held, and whether there will be adjustments to the current production cut agreement will be the core driver of short-term price fluctuations. In the middle to latter part of the month, market focus will shift to the Federal Reserve's interest rate meeting in mid-December, as its guidance on future interest rate paths will determine the direction of macro sentiment. For the polyolefin industry chain, crude oil, as the most direct cost anchor, is crucial for the trends in December. If OPEC+ can release stronger signals for production cuts, or if domestic macro policies exceed expectations and improve demand prospects, oil prices are likely to stabilize or even rebound, thereby providing cost support for polyolefins. Conversely, if the logic of demand falsification continues to strengthen, oil prices may continue to decline, dragging down the entire chemical products sector. Therefore, the crude oil market is likely to maintain wide fluctuations in December, with direction to be determined by key events.