Trump Says He Would Not Rule Out Meeting Iran’s Supreme Leader if a Deal Is Reached; Crude Oil Falls More Than 3% Intraday, Plastic Markets Turn Red Across the Board

I. Crude Oil Market Dynamics

On June 4, the U.S. released positive signals regarding U.S.-Iran negotiations, easing geopolitical tensions and supply concerns, leading to a decline in international oil prices. NYMEX crude oil futures for July fell by $2.98 to $93.04 per barrel, a decrease of 3.10%; ICE Brent crude futures for August dropped by $2.78 to $95.03 per barrel, a decrease of 2.84%. China's INE crude oil futures for June rose by 4.3 to 608.3 yuan per barrel, while the night session fell by 13.2 to 595.1 yuan per barrel.

Outlook for the market

There is tremendous uncertainty in both the geopolitical landscape and the supply-demand outlook, and the market needs to wait for clearer guidance. In the near term, the first thing to watch is whether Trump’s claim that a deal with Iran would be reached before the weekend is actually fulfilled. A tug-of-war is emerging between the risk of inventories hitting bottom and weak demand under high oil prices. In the medium term, attention should remain on when continued inventory draws may trigger market panic. Iran remains firmly unwilling to relinquish control over the Strait of Hormuz, and the actual navigation conditions through the strait will also need more time to become clearer. We believe oil prices still have a strong chance of testing the upper resistance of the high-end range, but given the uncertainty surrounding geopolitical developments, it is important to manage timing carefully and strengthen risk controls.

II. Macroeconomic Market Dynamics

U.S. initial jobless claims rose by 13,000 last week to 225,000, exceeding economists’ expectations and marking the highest level since February this year. The data also showed that U.S. Challenger job cuts totaled 97,000 in June, of which 38,600 layoffs were due to AI, accounting for 40%.

The World Economic Forum released a report stating that, driven by geopolitical tensions, concerns over economic security, and shifts in trade relations among major economies, geoeconomic fragmentation will accelerate in 2025 and 2026, and is expected to cost the global economy between $213 billion and $307 billion each year.

The central bank will conduct 500 billion yuan in outright reverse repo operations on June 5, with a maturity of three months. In June, 800 billion yuan of three-month outright reverse repos will mature. After the operation on June 5, there will be a net withdrawal of 300 billion yuan, marking the central bank’s fourth consecutive month of reduced rollover for three-month outright reverse repos.

◎ Trump:The final negotiation phase to end the Iran war is currently underway. If Iran kills American soldiers, it will be a sufficient reason to restart the conflict.Trump also informed the mediators.Refuse to release funds to Iran before signing the agreement.。

◎ Iranian Revolutionary Guard Corps:A ceasefire on all fronts, including Lebanon, is the preliminary condition for ending the war with the United States.。

Arab media: Discussions on an agreement to unfreeze Iranian funds have entered the final stage.

The Israeli army has begun withdrawing from the town of Debbin in southern Lebanon.Hezbollah: It rejects the outcome of the so-called direct talks between Lebanon and Israel and is only concerned with a comprehensive ceasefire.。

◎ Zelensky publicly addressed an open letter to Putin, proposing a meeting; Putin said he was willing to hold talks with the Ukrainian side on the basis of the Anchorage meeting.

3. Plastic Market Trends

Geopolitical tensions have eased somewhat, leading to a more than 3% drop in crude oil during the day. The main contracts for plastic-related futures showed a sea of red in the night session.

The plastics 2609 contract was quoted at 7,915 yuan/ton, down 0.14% from the previous trading day.

The PP2609 contract was quoted at 8,674 yuan/ton, down 0.49% from the previous trading day.

The PVC2609 contract was quoted at 4,791 yuan/ton, down 1.38% from the previous trading day.

The Styrene 2607 contract was reported at 8,682 yuan/ton, down 1.26% from the previous trading day.

IV. Today's Market Forecast

PP：The market is expected to fluctuate with a downward bias, as the weak supply and demand fundamentals remain in intense contention. Cost-side variables have become a key benchmark guiding the market, while support from oil-based production costs is expected to soften. The easing of spot tightness has also helped relieve supply-demand pressure in the market.

PE：Overall supply and demand data have weakened compared with the previous period, and polyethylene prices are expected to continue declining in the next period.

PVC：The PVC spot market continues to operate under weak fluctuations. With expectations of increased PVC supply and lackluster demand, the price focus in the spot market is under pressure and tends to decline. In the short term, the pace of inventory reduction in the industry is slowing down, and in the context of poor expectations for policy support in the long term, the price focus in the spot market is expected to remain weak and downward.