United States Lifts Iran Maritime Blockade! International Oil Prices Plunge Nearly 6% In One Day! PP And Styrene Under Pressure Weaken

I. Overnight Crude Oil Market Developments

Reports indicate that the United States has begun lifting its maritime blockade on Iran and partially easing sanctions, further alleviating market concerns and weighing on international oil prices. The NYMEX WTI crude oil futures July contract fell USD 4.70/bbl, or 5.82%, to USD 76.05/bbl; the ICE Brent crude oil futures August contract fell USD 4.21/bbl, or 5.06%, to USD 78.96/bbl. China’s INE crude oil futures 2608 contract fell RMB 12.1 to RMB 529.7/bbl, and dropped RMB 20.8 in night trading to RMB 508.9/bbl.

Future market outlook

After geopolitical risks ease, the market will closely watch the progress of traffic resuming in the Strait of Hormuz, which will have a huge impact on the recovery of supply. In order to rush oil shipments, reports say that 69 tankers are already heading to the Middle East region. Kpler believes that before these tankers enter the area to load cargo, the 118 tankers currently stranded in the Middle East Gulf will be cleared first within 10 to 15 days — they have already been loaded and contracted, and all that remains is a safe passage and acceptable war-risk insurance. This all hinges on one premise: the geopolitical situation does not deteriorate further, and the Strait of Hormuz can reopen smoothly. Any party tearing up the terms would send the market sharply backward at once.

Oil prices have basically fallen back to pre-war levels. Market recovery has been much faster than the changes in supply and demand fundamentals in the crude oil market. Expectations have already been fully priced in, and what comes next is to watch the actual progress of recovery on the supply and demand side. In addition, on the geopolitical front, differences between Iran and Israel, as well as the extent to which the agreement is implemented, remain factors that worry the market. The next 60 days covered by the agreement will still be critical for the crude oil market. The pace of oil price movements remains highly uncertain, and prices may still experience sharp fluctuations at any time. Pay attention to timing and participate cautiously.

II. Macroeconomic Dynamics

1. Trump: PrepareLet the exemption for sanctions on Russian oil expire.。

2. The European Parliament voted to pass legislation related to the EU-US trade agreement.

3. World Gold Council Survey:More central banks have announced plans to increase their gold reserves.

4. It is reported that SK Hynix will pass it on.Proposed shareholder return plan of 100 trillion wonOfficial response: We have never discussed a project of that specific scale.

5. SpaceX acquired Anysphere, the developer of Cursor, for $60 billion. On Tuesday, SpaceX's market value briefly exceeded that of Amazon and Microsoft, making it the fourth largest company in the world by market capitalization. Elon Musk's personal wealth surged to $1.4 trillion.

6. The Bank of Japan raised its target interest rate from 0.75% to 1.00%, in order toHighest level in 31 yearsThe central bank decided to start from.Starting from April next year, the reduction in bond purchase scale will be suspended.

After three consecutive interest rate hikes in Australia this year, the central bank has decided to hold steady for the first time, but stated that further rate increases may be necessary.

8. Middle East situation — ① Trump saidThe negotiations for the US-Iran agreement have entered the second phase.The United States will not invest any funds in Iran.

② Israeli media: Some U.S. military refueling aircraft have begun withdrawing from Israel.

③ Saudi Arabian TV released the terms of the 14-point memorandum of understanding between Iran and the United States, which are more detailed than the version released by Iran’s Mehr News Agency.

Iranian Speaker of Parliament Qalibaf statedIsrael must withdraw its troops from Lebanon.。

⑤The U.S. was reportedly unwilling to let Israel review the U.S.-Iran memorandum of understanding.。

6. Advisor to the spokesperson of Iran’s Foreign Ministry: Iran’s missile program and its support for regional allies are not negotiable.

⑦ U.S. media:The United States will allow Iran to immediately resume oil export sales.。

⑧ Vance:Exempt from paying the Strait of Hormuz transit feeIt has been explicitly written into the agreement; Trump may decide to announce the agreement before Friday.

9. Iranian Vice President: Iran will maintain control over the Strait of Hormuz.Vessels passing through shall pay a service fee.。

10. Sources: The $300 billion private fund does not involve government funds, and the fund has already secured more than half of its committed capital from investors, including U.S. companies.

⑪ Iranian Foreign Minister: Negotiations between the United States and Iran will begin on the day the two countries sign a memorandum of understanding.

9. Ministry of Foreign Affairs: Security and freedom of navigation in the Strait of Hormuz serve the interests of all parties.

Director Zheng Zhanjie chaired a symposium for private enterprises to gather opinions and suggestions on systematically advancing the construction of the "Six Networks."

11. China Central Depository & Clearing Co., Ltd.:The service fee for the settlement of the current bond transactions conducted by market makers through market making will be reduced from 80% to 75%.。

12. National Bureau of Statistics: In May, the value added of industrial enterprises above designated size grew by 4.5%; from January to May, total retail sales of consumer goods increased by 1.4%.

III. Plastics Market Futures Dynamics

Oil prices have plunged continuously, with WTI already down to the $75 mark! The main domestic plastics futures contractFall more, rise less.：

The September 2609 plastics contract was quoted at 7,486 yuan per ton, up 0.03% from the previous trading day.

The PP2609 contract was quoted at 7,973 yuan/ton, down 1.05% from the previous trading day.

The PVC2609 contract was quoted at 4,665 yuan/ton, up 0.24% from the previous trading day.

The Styrene 2607 contract was quoted at 7,897 yuan per ton, down 1.47% from the previous trading day.

IV. Market Outlook

PE: Recently, the National Development and Reform Commission, together with multiple departments, issued a three-year action plan for energy-saving and carbon-reduction upgrades in key industries. Ethylene, as a core chemical feedstock category, has been included in the regulatory list. In the long term, this policy will promote the optimization and upgrading of industry capacity, but in the short term, it is unlikely to change the current weak pattern of the polyethylene market. At present, the overall macro environment remains under pressure, while cost support from upstream feedstocks has weakened sharply in succession. The combination of these two bearish factors has directly intensified pessimistic sentiment among market participants. To quickly recover funds and reduce inventory pressure, traders have had no choice but to actively lower offers and make concessions to facilitate sales. However, even as merchants continue to cut prices, procurement demand from downstream factories still fails to keep pace. With limited end-user orders and weak purchasing capacity, only a small number of scattered transactions are seen in the market. Most participants are reluctant to replenish stocks rashly and instead choose to wait and see until the market bottoms out and stabilizes. Taking all factors into account, the current market lacks effective positive drivers to support a price rebound, and the dual pressure from costs and demand is unlikely to dissipate in the short term. It is expected that the polyethylene market will continue to operate on a weak note, with only brief and limited upticks possible when crude oil futures stage a temporary rebound, making it difficult for a sustained upward trend to emerge.

PP: The current polypropylene market is characterized by a mix of bullish and bearish factors, with cost-side influences pulling in both directions. The supportive bullish factor comes from several countries in the Middle East, which, under market pressure, have implemented substantial production cuts. In addition, the shipping channel through the Strait of Hormuz has not yet been fully cleared, to some extent tightening global crude oil supply. However, the bearish pressures are more concentrated. On the one hand, the ceasefire period between the United States and Iran has continued, and the U.S. has signaled that the strait will remain open for navigation over the long term, causing the geopolitical risk premium to continue fading. On the other hand, refineries across Asia have cut operating rates, while expectations of further Federal Reserve rate hikes have intensified. These factors have jointly driven international crude oil prices lower for several consecutive sessions, directly weakening cost support for PP feedstock. In light of geopolitical developments, the U.S. has stated that it will allow Iran to carry out low-intensity uranium enrichment activities, and there remains uncertainty over the signing of the relevant agreement on the 19th. The market has already priced in expectations of normalized passage through the channel in advance, putting further pressure on crude oil and transmitting bearish sentiment to the chemical futures market, leading to a broad pullback in PP futures. On the demand side, the industry is currently in its traditional off-season. Downstream end-user new orders are following through sluggishly, and processors are resistant to high raw material prices, generally making only small purchases as needed. Inventory turnover pressure among distributors has increased, forcing them to proactively lower quotations and offer discounts to stimulate sales, with spot prices falling in line with the futures market. Overall, the short-term polypropylene market lacks a catalyst for a rebound. The weak trend in crude oil will continue to drag on costs, and demand is unlikely to recover quickly during the off-season. It is expected that the market will remain in a volatile downward trend, with only brief and modest rebounds in the event of unexpected geopolitical disruptions. The overall tone is still biased to the downside.

PVC: The supply and demand situation for PVC remains a problem from earlier periods. As time goes on, the maintenance of PVC plants is gradually coming to an end; however, current prices are at a low level, which may affect the enthusiasm of production enterprises to operate. On the demand side, it mainly maintains a just-in-demand nature. There is limited support for PVC prices in the fundamentals. Overall, in the short term, the PVC spot market may continue to adjust weakly at low levels.