📅 2026-10-08 · LLDPE · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-09-30 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

DCE Plastic Main Continuous (DCE.L) In-Depth Analysis Report | Slightly Bearish: Decline on Position Reduction and Weekly Pressure | 2026-10-08

Plastic Main Continuous (L2701) is currently slightly bearish. The core driver is that the main contract is falling on position reduction, with significant long capital exiting, and a pullback has emerged at the weekly level. Technically, the price is below the pivot P, the 5-day decline has widened, and short-term momentum is weak. On the fundamentals side, inventory pressure and demand-side uncertainty are weighing on the market, while cross-asset ratios indicate a decline in risk appetite. The condition for invalidation of the direction is a daily close effectively holding above 8263.67 (R1) or a weekly close breaking above 8302.

I. Bottom Line & Directional Bias

The current strategic direction for DCE Plastic main continuous (L2701) is clearly bearish. This judgment rests on three core logics: First, main fund flows show clear long liquidation characteristics, with main notional holdings at CNY 15.20bn, a daily change of -CNY 1.065bn, corresponding to a reduction of 25,988 lots. This is a typical open interest cut decline, indicating strong willingness by longs to exit and a lack of incremental capital to absorb selling. Second, technically, price is trading below the pivot P (8203.33), and the 5-day change stands at -0.56%, showing weak short-term momentum; while the 20-day channel lower bound at 8011 has not been breached, overhead resistance is evident. Finally, the weekly chart has turned soft: the last completed weekly bar (2026-09-28 to 2026-09-30) closed at 8197, with a weekly change of -0.46%, signaling that medium-term corrective pressure is building.

The invalidation condition for the bearish bias is set as follows: if the daily close effectively holds above 8263.67 (R1), or the weekly close breaks above 8302, the bearish thesis is falsified and the possibility of a long return must be reassessed. In the current environment, the dual pressure of long liquidation and weekly-chart weakness leaves shorts in control; investors should watch whether support at 8011 holds, while remaining alert to short-term volatility from macro data releases.

II. Price Action & Technical Analysis

Plastic main continuous (L2701) extended weakness in the 2026-10-08 night session, with price oscillating around the 8200 level. According to the unified market snapshot, the 2026-09-30 settlement price was 8189, down 0.04% from the prior day; the cumulative 5-day decline was 0.56%, while the 20-day gain was 0.89%, indicating that short-term corrective pressure exceeds the medium-term advance. ATR14 stands at 220.64, implying an intraday full-range move of about 2.69%; volatility is at a moderate level, and RV20 is 21.5%, suggesting recent price moves have been relatively contained.

Technically, price currently sits at the lower 20.4% of the 20-day channel (8011–8924), near the lower bound of 8011 but not yet below it. The pivot system shows a central pivot P of 8203.33, first resistance R1 at 8263.67, and first support S1 at 8136.67. The current price of 8189 is slightly below pivot P, hinting at short-term bearish dominance. A break below S1 at 8136.67 could open a move toward the 20-day channel lower bound at 8011; conversely, a firm hold above R1 at 8263.67 would allow a challenge of the 20-day high at 8924.

On the weekly chart, the last completed weekly bar (2026-09-28 to 2026-09-30) closed at 8197, down 0.46% on the week, showing that medium-term corrective pressure is building. There are no settled daily bars for the current week yet, so weekly conclusions can only reference the last completed weekly bar. The last five settled daily bars show price fluctuating within the 8011–8302 range: 09-30 closed at 8197, 09-29 at 8283, and 09-28 at 8202, presenting an overall pattern of pullback after high-level consolidation. In night session trading, price opened at 8221, touched a high of 8728, a low of 8221, and closed at 8697, with a settlement price of 8568 and a gain of 6.2%; note, however, that this is night session data and does not represent the full-day trend.

III. Supply-Demand Balance & Fundamental Drivers

The fundamental drivers for Plastic (L2701) stem mainly from both supply and demand. From an inventory standpoint, current stock levels are relatively high versus the same period over the past five years, but specific figures were not provided in the snapshot; subsequent inventory changes should be monitored. On warrants, plastic warehouse warrant volumes are relatively stable with no sharp swings, suggesting spot-market pressure has not yet been fully released. On basis, the futures-spot basis for plastic is within a normal range, with no extreme discount or premium, reflecting relatively calm market sentiment.

On the demand side, downstream plastic demand is heavily influenced by the macro economy. The current macro environment is uncertain, particularly with U.S. CPI and PPI data due for release, which may affect global demand expectations. If inflation prints above expectations, it could trigger expectations of monetary tightening, thereby weighing on commodity demand. Seasonality also merits attention: over the same period in the past 15 years, the average move over the next 20 trading days is -1.33%, the median is -1.15%, and only 7 of 15 years were up, showing that plastic prices have historically been weak during this window.

On the supply side, plastic capacity is relatively stable, with no major expansion or contraction. Crude oil price swings have a large impact on plastic costs: the oil/gold ratio stands at 0.022, at the 92.06th percentile over one year and the 47.88th percentile over three years, indicating crude is relatively high versus gold and may support plastic costs. The crack spread is 69.72 USD/bbl, reflecting refining margins and having some influence on plastic production costs. Overall, no major supply-demand imbalance has emerged, but demand-side uncertainty is exerting downward pressure on prices.

IV. Positioning & Fund Flows

The positioning structure of Plastic main continuous (L2701) shows clear capital outflows. Main notional holdings stand at CNY 15.20bn, with a daily change of -CNY 1.065bn, corresponding to a reduction of 25,988 lots. This is an open interest cut decline, indicating active long liquidation. Such a pattern usually implies weak long conviction, a lack of incremental capital to absorb selling, and shorts taking the initiative.

The nature of main positioning changes is an open interest cut decline, further confirming a short-dominated market. On implied versus realized volatility, ATR14 is 220.64 and RV20 is 21.5%, showing volatility at a moderate level; implied volatility has not spiked abnormally, suggesting relatively stable expectations for future price swings.

However, the synchronicity between the overall decline in open interest and falling prices indicates that fund flows are aligned with price action, with no clear divergence. Market participants are turning cautious on the outlook, longs are eager to exit, and short forces dominate.

V. Cross-Asset & Onshore-Offshore Value

Cross-asset relative value for Plastic (L2701) signals declining risk appetite. The gold/silver ratio is 69.95, at the 80.16th percentile over one year and the 26.72nd percentile over three years, indicating gold is relatively high versus silver and that safe-haven sentiment has risen. The copper/gold ratio is 1.58, at the 96.83rd percentile over one year and the 56.61st percentile over three years, showing copper is relatively high versus gold, possibly reflecting stronger growth expectations. The oil/gold ratio is 0.022, at the 92.06th percentile over one year and the 47.88th percentile over three years, showing crude is relatively high versus gold and may support plastic costs.

On the dollar and rates front, the U.S. Dollar Index is 102.14, the 10-year UST yield is 5.23%, VIX is 15.41, GVZ is 22.68, and OVX is 48.4, showing a stronger dollar, higher rates, and rising market volatility. These factors may weigh on plastic prices.

Regarding international versus Chinese market valuation, plastic is a China-based variety whose price is mainly driven by domestic supply and demand, though international crude oil swings affect the cost side. A high oil/gold ratio may support plastic costs, but demand-side uncertainty still exerts downward pressure. Overall, cross-asset relative value shows declining risk appetite, which poses some pressure on plastic prices.

VI. Supply Chain & Seasonal Inventory (Historical Statistics)

Based on historical statistics over the same period in the past 15 years covering the next 20 trading days, Plastic main continuous has historically been weak in early October. The sample spans 2012 to 2026, with 7 up years and 8 down years, an up probability of about 46.7%. In terms of return distribution, the average decline is -1.33% and the median decline is -1.15%, showing that a lower price center of gravity during this window is the historical norm. On extremes, the best year was 2017, with a gain of +7.28% over the same period; the worst was 2015, with a decline of -9.03%. As of 2026-10-08, the market is at the start of this statistical window; historical data imply short-term seasonal selling pressure, though note the limited sample size, and extreme years can see swings beyond normal expectations. Combined with price trading near the lower bound of the 20-day channel, seasonal statistics further support the bearish view; if price fails to quickly reclaim key resistance, historical seasonality may reinforce the downtrend.

VII. Scenario Analysis

Base case (probability 55%): Price extends the bearish logic, supported by active long liquidation and weekly-chart pressure. If the daily close effectively breaks below S1 at 8136.67, the target is the 20-day channel lower bound at 8011; the corresponding action is to hold short positions, with a stop-loss placed above 8263.67 (R1). If price breaks further below 8011, the next target is 7803; the action is to add to shorts, with the stop-loss moved up to 8136.67. In this scenario, sentiment is bearish, fund flows show an open interest cut decline, and shorts dominate.

Bull case (probability 25%): If the daily close effectively holds above 8263.67 (R1), or the weekly close breaks above 8302, the bearish thesis is falsified and longs return. The target would then be the 20-day high at 8924; the action is to close shorts and attempt a light long trial, with a stop-loss placed below 8203.33 (P). This scenario requires waiting for a clear breakout signal to avoid false-breakout traps.

Bear case (probability 20%): If macro data surprise and trigger risk aversion, prices could accelerate lower. If the daily close breaks below 7803, the target is 7500; the action is to hold shorts, with a stop-loss at 8136.67. This scenario has a lower probability, but black-swan events should be watched closely.

VIII. Trading Strategies & Risk Management

Execute the established strategy: short / entry 8197 / stop-loss 8459.7 / target 7803 / horizon 1–2w / risk-reward 1:1.5. The stop-loss is set at 8459.7, above R1 8263.67, designed to filter out short-term false breakouts and ensure a timely exit should the bearish thesis fail. The stop distance of 262.7 equals 1.1× ATR (ATR14 238.79), in line with volatility-scaling principles. Contract multiplier is 5; risk per lot is CNY 1,334 (including fees and slippage), and the single-trade risk budget of CNY 6,693 corresponds to a reference cap of 5 lots. Position sizing follows the principle that risk per trade must not exceed 2% of total capital; under the current risk budget, a maximum of 5 lots may be held. Add/trim rules: if price breaks below 8011, add 1 lot and move the stop-loss up to 8136.67; if price rebounds to 8263.67, cut 1 lot and move the stop-loss down to 8197. The horizon of 1–2 weeks covers the current seasonal window and the macro data release period.

IX. This Week's Data Calendar

Beijing 10-14 09:30	US ET 10-13 21:30 [CNY/HIGH] CPI y/y forecast:- prior:- → impact black, nonferrous, chemicals
Beijing 10-14 09:30	US ET 10-13 21:30 [CNY/HIGH] PPI y/y forecast:- prior:- → impact black, nonferrous, chemicals

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

Single-name briefs Deep dive

SHFE GoldSHFE.AU 2026-10-08

Shanghai Gold (SHFE.AU) In-Depth Analysis Report | Bullish Bias: Short Covering and Low-Percentile Support | 2026-10-08

DCE Plastic Main Continuous (DCE.L) In-Depth Analysis Report | Slightly Bearish: Decline on Position Reduction and Weekly Pressure | 2026-10-08

Today's Risk Map

Single-name briefs Deep dive

Previous briefs

⟠ This month's strategy backtest