Trump Claims US-Iran Negotiations Have Entered Final Stage, International Oil Prices Plummet, Plastics Futures All Dip

1. Overnight Crude Oil Market Dynamics

On 5/20, reports said that the U.S.-Iran talks had made new progress, easing market concerns and pushing international oil prices lower. NYMEX crude oil futures, the rolled July contract, fell by USD 5.89/bbl to USD 98.26/bbl, down 5.66% from the previous period. ICE Brent crude futures, the July contract, fell by USD 6.26/bbl to USD 105.02/bbl, down 5.63% from the previous period. China’s INE crude oil futures, the 2607 contract, rose by RMB 9.0 to RMB 682.8/bbl, while in night trading it fell by RMB 35.8 to RMB 647/bbl.

Market Forecast

Although oil prices fell sharply on Wednesday, the outlook for U.S.-Iran talks remains highly uncertain. Against the backdrop of Iran’s tough stance and insistence on its core demands, there is still a wide gap between its position and Trump’s requirements. Judging from Trump’s recent remarks, he appears more inclined to resolve the U.S.-Iran issue without reigniting war. Iran’s response in the coming days will be crucial. The sharp drop in oil prices has, for now, priced in the possibility of a breakthrough in the current negotiating deadlock. However, if Trump insists on making no concessions to Iran, the chances of reaching an agreement do not look high, and the final outcome of the talks could see a dramatic reversal. The crude oil market still faces a complex situation, and under the influence of Trump’s contradictory and chaotic statements, market trends could shift at any time. Oil prices still do not lack the potential for sharp volatility. Strengthen risk control and participate cautiously.

II. Macroeconomic Trends

1. Situation in the Middle East —

①Trump said that U.S.-Iran negotiations have entered the final stage and that he is willing to wait a few more days, but sanctions will not be eased before an agreement is signed.

The Iranian president met with the Pakistani interior minister to discuss issues such as indirect negotiations between Iran and the United States.

③Foreign media: The phone call between U.S. and Israeli leaders was tense, with Trump insisting on a diplomatic solution to the Iran issue and Netanyahu strongly opposing it.

Sources: The United States has shown limited flexibility but will not make concessions on nuclear demands and the Strait issue.

⑤ Iran: In the past 24 hours, 26 vessels have passed through the Strait of Hormuz.

⑥ Sources: Pakistan’s Chief of Army Staff may visit Iran to announce the final version of the agreement text; the next round of talks will be held in Islamabad after the end of May.

⑦ Iran confirms it has received the U.S. proposal and is reviewing it. U.S. media: Mediators have drafted a U.S.-Iran letter of intent, aiming to launch 30 days of negotiations.

2. The heads of state of China and Russia signed a joint statement on further strengthening comprehensive strategic coordination and deepening good-neighborly and friendly cooperation between the two countries.

3、Xi Jinping on the Middle East situation: A comprehensive ceasefire brooks no delay, resuming hostilities is even more inadvisable, and adhering to negotiations is particularly important.

4、Ministry of Commerce: China and the United States have, in principle, agreed to discuss under the framework of the Trade Council a reciprocal tariff reduction arrangement covering products of equal value, each amounting to US$30 billion or more.

5、Foreign media: OpenAI is expected to file for an IPO as early as Friday.

6、SpaceX officially files for IPO: Q1 revenue of $4.7 billion.

Nvidia's Q1 revenue and Q2 outlook both beat expectations, yet its stock remained flat in after-hours trading.

8. Samsung Electronics' labor union has postponed its strike and will vote on a tentative wage agreement from May 23 to 28.

9、"Fed's 'mouthpiece' comments on April meeting minutes: discussions on rate cuts are nearly concluded, and the Fed is beginning to seriously consider the possibility of rate hikes."

III. Plastics Market Futures Dynamics

Late at night, international oil prices plunged sharply, and the main domestic plastic futures contracts all turned red.

The plastic 2609 contract is quoted at 8053 yuan/ton, a decrease of 1.06% from the previous trading day.

The PP2609 contract was quoted at 8,899 yuan/ton, down 1.00% from the previous trading day.

The PVC2609 contract was quoted at 4,928 yuan/ton, down 1.28% from the previous trading day.

The Styrene 2607 contract was quoted at 9,318 yuan/ton, down 0.86% from the previous trading day.

4. Market Outlook Forecast

PE: In the short term, producers are becoming more willing to actively destock, while a slight decline in downstream operating rates and a wait-and-see sentiment are dampening raw material procurement. Amid the supply-demand tug-of-war, polyethylene prices may have further downside potential.

PP: Under the new maintenance and restart game, the overall loss has increased, and the supply side has seen a further reduction. The spot price has strong bottom support, while downstream buyers are adopting a wait-and-see attitude towards high-priced sources, resulting in generally average overall transactions.

PVC: The PVC industry is facing unfavorable policies and poor performance of petrochemical raw material prices, leading to weak supply and demand expectations. The spot prices are maintaining a trend of fluctuating downward. In the short term, there is insufficient cost support, and the market lacks positive stimuli for improvement. Spot prices are expected to continue to exhibit weak fluctuations and seek lower levels.