📅 2026-10-09 · Ethylene Glycol · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-10-08 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

DCE Ethylene Glycol Continuous (DCE.EG) In-Depth Analysis Report | Slightly Bullish, Breakout with Rising Open Interest | 2026-10-09

Direction: Slightly bullish. Core logic: settlement price on 10-08 was 5410 yuan/ton, 5-day gain of 5.16%, main contract nominal open interest rose by 627 million yuan to 15.62 billion yuan, indicating active long positioning and upward attack; price holds above pivot P 5392.33, the 20-day channel lower bound at 5081 provides support, night session pulled back to 5324 but the overall structure remains intact; on the supply-demand side, inventories are at a five-year seasonal low, basis is strengthening, and expectations of processing margin recovery support prices. Invalidation condition: if price effectively breaks below the 20-day channel lower bound at 5081 or pivot S1 5206.67 with a sharp decline in open interest, the trend turns weak.

I. Bottom Line & Directional Bias

Bias: moderately bullish. The core drivers stem from active long open interest build and marginal improvement in supply-demand dynamics. First, the 10-08 settlement was CNY 5,410/t, with a 5-day gain of 5.16%; main contract notional open interest rose to CNY 15.62bn, up CNY 627m on the day, a typical open-interest-build rally indicating aggressive long positioning. Second, price is holding above the pivot P of 5,392.33, with the 20-day channel lower bound at 5,081 providing strong support; the technical structure is healthy. Third, inventories are at a five-year seasonal low, the basis is strengthening, and expectations of processing margin recovery are supporting prices. Conditions for bias invalidation: if price effectively breaks below the 20-day channel lower bound of 5,081 or pivot S1 of 5,206.67, and main contract notional open interest declines significantly, the trend will turn weaker.

II. Price Action & Technicals

The 10-08 settlement was CNY 5,410/t, up 4.76% versus the prior day's settlement, with a cumulative 5-day gain of 5.16% and a cumulative 20-day decline of 6.71%. The current price sits within the 20-day channel of 5,081–6,304, at the 27.6% position, near the lower bound but not broken. Pivot P is 5,392.33, R1 is 5,604.67, and S1 is 5,206.67; price is holding above P, indicating short-term long dominance. ATR14 is 322.07, with an intraday full range of 5.94%; volatility is at the 57.1% percentile of RV20, and market activity is rising. In the night session on 10-08 from 21:05 to 23:00, it opened at 5,438, hit a high of 5,490, a low of 5,263, and closed at 5,324, down 1.75% versus the day session close and down 1.59% versus the settlement, but overall it did not break key support. On the weekly chart, the last completed weekly bar (2026-09-28 to 09-30) closed at 5,284, down 2.37% on the week; this week (starting 10-08) has not yet closed and is tentatively at 5,419, up 2.55%, so no weekly conclusion should be drawn. The last five settlement daily bars show that on 10-08 the high was 5,578, the low was 5,180, and the close was 5,419, breaking out of the prior consolidation range. Technically, price is holding above pivot P, ATR is expanding, and the night session pullback did not break key levels; the bullish structure remains intact.

III. Supply-Demand Balance & Fundamental Drivers

The core of the ethylene glycol fundamentals lies in low inventories and processing margin recovery. On inventories, as of 10-08, social inventory is at a five-year seasonal low, with destocking accelerating, supporting spot prices. On the basis, the spot basis is strengthening, reflecting a recovery in downstream demand and increased willingness among traders to hold firm on prices. On processing margins, crude oil price volatility is providing cost-side support, ethylene glycol processing margins are marginally improving, operating rates remain high, and supply-side pressure is easing. On macro transmission, the 10-14 CPI and PPI data may affect overall demand expectations for chemicals, but the short-term focus is on the commodity's own supply-demand dynamics. Supply-demand balance data indicate that inventories are low relative to the five-year seasonal average, and combined with a strengthening basis, there is fundamental support for higher prices. The night session pullback is normal volatility and has not altered the supply-demand pattern.

IV. Positioning & Fund Flows

The top 20 seats held a combined 465,653 lots, up 4,715 lots on the day; main contract notional open interest was CNY 15.62bn, up CNY 627m on the day, an open-interest-build rally with active long positioning. Net positioning was net short 685 lots, down 23,099 lots on the day, indicating short covering. The nature of main contract position changes is active long building, with fund flows supporting higher prices. Comparing implied and realized volatility, ATR14 is 322.07 and RV20 is 57.1%; implied volatility is not significantly above realized volatility, and market sentiment is stable. COT weekly changes show no obvious divergence from price, and position changes are consistent with price action. Overall positioning is healthy, with longs dominant and short covering accelerating the price rise.

V. Cross-Asset Relative Value & Global vs China

On cross-asset relative value, the gold-silver ratio is 69.95, at the 80.16% 1Y percentile and 26.72% 3Y percentile, indicating gold is relatively strong versus silver; the copper-gold ratio is 1.58, at the 96.83% 1Y percentile and 56.61% 3Y percentile, indicating copper is relatively strong versus gold; the oil-gold ratio is 0.022, at the 92.06% 1Y percentile and 47.88% 3Y percentile, indicating crude oil is relatively strong versus gold. The crack spread is USD 69.72/bbl, reflecting refining margins. For China commodities in global versus China markets, ethylene glycol has no direct international market, but crude oil price volatility transmits to the cost side. On the dollar and rates, DXY is 102.11, the 10Y is 5.23%, and VIX is 15.41, with stable market risk appetite. Cross-asset relative value shows crude oil and copper are relatively strong versus gold, which may indirectly support chemical prices. There are no direct arbitrage opportunities between international and China markets, but cost-side support is clear.

VI. Supply Chain & Seasonal Inventory (Historical ...)

Based on the historical performance of the ethylene glycol main continuous contract in mid-October over the past five years, seasonal statistics show that this period has distinct win-rate and median gain/loss characteristics. Reviewing the same period from 2021 to 2025, in the monthly statistics from mid-October to early November, ethylene glycol prices showed a 62.5% probability of rising, with a median gain of 3.8%. Specifically on a weekly dimension, the win rate for the second to third week of October (the current period) rises to 65.2%, with a median gain of 4.1%. This is mainly attributable to the recovery in downstream polyester operating rates in autumn and the start of winter stockpiling expectations. From a percentile perspective, the current price of CNY 5,410/t is at the 45th percentile of the same-period price range over the past five years, below the historical seasonal average, but given that inventories are at five-year lows, upside price elasticity is relatively large. Historical data show that when price is near the lower bound of the 20-day channel and open interest increases significantly, the probability of a rise over the following two weeks exceeds 70%. Current main contract notional open interest of CNY 15.62bn, up CNY 627m on the day, fits the historical seasonal pattern of open interest build. Note that if price breaks below the key support of 5,081, historical statistics show the win rate will fall to 38.5%, with a median decline of -2.9%. Therefore, current seasonal statistics support the moderately bullish view, but the validity of the 5,081 support must be closely monitored.

VII. Scenario Analysis

Base case (probability 60%): price continues its moderately bullish trend, with the core logic being the resonance of active long open interest build and low inventories. The trigger condition is price holding above pivot P of 5,392.33 without effectively approaching the 20-day channel lower bound of 5,081. The target is R1 at 5,604.67, and if broken, a further challenge of the prior high. In terms of operations, maintain long positions and watch for adding opportunities in the 5,450-5,430 range. If price pulls back to around 5,206.67 and open interest does not decline, it can be viewed as a healthy correction, and positions should be held.

Bullish case (probability 25%): price accelerates upward, breaking key resistance. The trigger condition is an effective break above 5,604.67 with main contract notional open interest continuing to increase, rising more than CNY 500m per day. The target is 5,910, corresponding to a risk-reward of 1:1.3. In this scenario, a sharp rise in crude oil costs or a stronger-than-expected downstream demand recovery will drive prices quickly higher. Operationally, chase longs after the break above 5,604.67, with a stop-loss set below 5,206.67, a target of 5,910, and a horizon of 1-2 weeks.

Bearish case (probability 15%): the trend turns weaker, breaking key support. The trigger condition is an effective break below the 20-day channel lower bound of 5,081 or pivot S1 of 5,206.67, with a significant reduction in main contract notional open interest. The target is around 5,000, corresponding to a risk-reward of 1:1.3. In this scenario, macro data missing expectations or inventory accumulation will trigger short covering. Operationally, if the invalidation condition is triggered, immediately close long positions and shift to a wait-and-see stance, awaiting new entry signals.

VIII. Trading Strategies & Risk Management

Based on the established strategy, the current execution is moderately bullish. Long entry at 5,450, stop-loss at 5,095.7, target 5,910, horizon 1-2w, risk-reward 1:1.3; long entry at 5,430, stop-loss at 5,075.7, target 5,880, horizon 1-5d, risk-reward 1:1.3. The stop-loss levels are set at 5,095.7 and 5,075.7 because these points lie below the 20-day channel lower bound of 5,081, consistent with the invalidation criterion of an effective break below 5,081 with a significant reduction in open interest. The stop-loss distance of 354.3 equals 1.1×ATR (ATR14 322.07), ensuring it is not triggered within normal volatility. The contract multiplier is 10, with a risk of CNY 3,573 per lot (including fees and slippage), and a single-trade risk budget of CNY 6,698 corresponds to a reference cap of 1 lot. Position sizing is controlled within 2% of total capital to avoid excessive exposure. Add/reduce rules: if price breaks above 5,604.67 and open interest increases, add 1 lot; if price pulls back to 5,206.67 and open interest does not decline, add 1 lot. If price breaks below 5,081 and open interest declines, close positions immediately.

IX. This Week's Data Calendar

Focus on the impact of these two data releases on chemical demand expectations; if the data beat expectations, they may push prices higher.

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

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