The impact of the 91% reduction in tariffs between China and the United States on global chemical raw material prices

The impact of the 91% reduction in tariffs between China and the United States on global chemical raw material prices

On May 12, the joint statement of the high-level economic and trade talks between China and the United States was released. The two sides agreed to significantly reduce the level of bilateral tariffs. The United States canceled a total of 91% of the additional tariffs, and China correspondingly canceled 91% of the counter-tariffs; the United States suspended the implementation of 24% of the "reciprocal tariff", and China also suspended the implementation of 24% of the counter-tariffs. China also correspondingly suspended or canceled non-tariff countermeasures against the United States. The two sides will establish a mechanism to continue to negotiate on economic and trade relations.

Against this background, crude oil and chemical raw materials were greatly boosted that day. The June WTI crude oil spot contract on the New York Mercantile Exchange closed up $0.93/barrel to $61.95/barrel, an increase of 1.52%; domestic commodity futures closed up across the board, styrene rose more than 4%, PX0> paraxylene rose more than 3%, ethylene glycol, and PVC also rose. The market's bullish sentiment has heated up, but in the long run, it is still necessary to pay attention to policy implementation and improvement in terminal demand.