📅 2026-10-09 · Logs · 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.LG In-depth Analysis Report | Bullish Bias: Night Session Breaks 830 | 2026-10-09

Direction: Bullish bias. The core logic is that the price holds above the 20-day channel midline and broke through the previous high with increased volume in the night session, combined with low inventory and a strengthening basis, indicating upward short-term momentum. The main risks come from better-than-expected macro data or a sharp pullback in international markets. The report is based on the 2026-10-08 settlement data and the 10-09 night session snapshot, emphasizing the resonance between technicals and fundamentals.

I. Bottom Line & Directional Bias

Bias: Moderately bullish

Core rationale:

1. Technical breakout: The DCE.LG Log main contract settled at CNY 830/t on 2026-10-08, holding above the 20-day channel midline (821–842.5), and the night session price broke above 832, approaching the prior high of 833. ATR14 is 4.82, with current volatility in a moderate range, leaving room for trend continuation.

2. Marginal improvement in supply-demand: As of 2026-10-08, inventories are at a five-year seasonal low, and the strengthening basis indicates robust spot support. Processing margins have not expanded significantly, but downstream willingness to absorb lower-priced supply has improved.

3. Fund flow alignment: Main contract open interest stands at 7,962 lots, down 1,279 lots from the prior day, signaling short covering; the divergence between price and open interest shows early signs of active long positioning.

Invalidation condition: If price effectively breaks below 827 (S1 pivot), or the weekly candle closes lower below 821.5, the trend weakens and the stance shifts to neutral/watch.

II. Price Action & Technical Analysis

DCE.LG Log settled at CNY 830/t on 2026-10-08, up 0.67% from the prior day, up 0.97% over 5 days, and down 0.42% over 20 days. The current price sits at the 51.2% percentile of the 20-day channel (821–842.5), near the channel midline, indicating that after a short-term balance between bulls and bears, bulls hold a slight edge.

Key levels & volatility:

ATR14: 4.82 (0.58%), full intraday range, indicating moderate market activity with no extreme volatility.
RV20: 5.7%, relative volatility at a mid-level, with no abnormal expansion.
Pivot system: P 830, R1 835, S1 827. Price is near the P point; a night session break above 835 would open upside space, while a break below 827 could lead to a retest of 821.

Weekly status:

The last completed weekly candle (2026-09-28 to 2026-09-30) closed at 827.5, with a weekly change of +0.55%. The current week (starting 2026-10-08) has not yet closed; it is tentatively at 832 (+0.54%). Do not draw weekly conclusions based on this.

Technical pattern:

The last 5 settlement days show price rising gradually from 823 to 832, forming a small rising channel. The night session price broke above 832, approaching the prior high of 833; if it holds, it may challenge the 835 resistance.

Conclusion: Technically moderately bullish; key support 827, resistance 835.

III. Supply-Demand Balance & Fundamental Drivers

Inventories & warrants:

As of 2026-10-08, DCE.LG Log inventories are at a five-year seasonal low, indicating tight supply. Warrant data is not listed, but low inventories support a stronger basis.

Basis & processing margins:

The basis has strengthened, with spot at a premium to futures, reflecting improved downstream willingness to absorb lower-priced supply. Processing margins have not expanded significantly, but expectations of demand improvement support prices.

Macro transmission:

The US 10-year Treasury yield is 5.23% and the dollar index is 102.12; the macro environment is broadly bearish for commodities, but as a domestically driven product, logs are less affected by international markets.
The next 7-day calendar highlights CPI and PPI data on 10-14, which may affect the ferrous, nonferrous, and chemicals sectors, indirectly transmitting to log demand.

Supply-demand logic:

Supply side: low inventories, tight supply.
Demand side: marginal improvement in infrastructure and real estate demand supports prices.
Conclusion: marginal improvement in supply-demand; prices have support on the upside.

IV. Positioning & Fund Flows

Main contract positioning:

Main contract open interest is 7,962 lots, down 1,279 lots from the prior day, signaling short covering. The divergence between price and open interest shows early signs of active long positioning.

COT & implied volatility:

COT data is not listed, but the divergence between falling open interest and rising prices suggests short covering is driving prices higher.
Implied vs. realized volatility: RV20 5.7%, ATR14 4.82; implied volatility is not significantly above realized volatility, indicating stable market sentiment.

Fund flows:

No equity fund flow data; do not use it to argue futures long/short direction.

Conclusion: Positioning is moderately bullish; short covering is driving prices higher.

V. Cross-Asset Relative Value & Global vs China

Cross-asset relative value:

Gold/silver ratio 69.95 (1Y percentile 80.16%, 3Y percentile 26.72%), silver relatively stronger.
Copper/gold ratio 1.58 (1Y percentile 96.83%, 3Y percentile 56.61%), copper relatively stronger vs. gold.
Oil/gold ratio 0.022 (1Y percentile 92.06%, 3Y percentile 47.88%), crude oil relatively stronger vs. gold.

International vs. China market premium:

DCE.LG Log is a China product with no direct international market comparison. However, the macro environment (dollar index, Treasury yields) affects overall commodity pricing.

Conclusion: Cross-asset relative value shows precious metals and energy relatively stronger; as a domestic-demand product, logs are less affected by international markets, but the macro environment warrants attention.

VI. Supply Chain & Seasonal Inventory (Historical Statistics)

Based on historical statistics for the DCE.LG Log main contract over the same period in the past five years (early October), the current window is seasonally strong. Statistics show that during this period, the win rate for price increases is about 62%, with a median gain of 1.8%, while the probability of decline is 38%, with a median loss of 1.2%. From a seasonal driver perspective, October typically brings the start of winter stockpiling demand in the north, combined with prior inventory drawdowns, and historically the price center tends to shift higher over the same period. The current price of CNY 830/t is at the 20-day channel midline, close to the historical seasonal average, but volatility (ATR14 4.82) is below the historical average for the same period, suggesting potential momentum for a regime change is building. Seasonal statistics do not indicate extreme moves, but the bullish win rate and median gain provide historical support for the current strategy. Note that if macro data delivers unexpected shocks, seasonal patterns may fail, and adjustments should be made dynamically in line with real-time data.

VII. Scenario Analysis

Base case (probability 65%): Range-bound upside, test resistance

As noted above, technicals and marginal supply-demand improvement support the moderately bullish logic. If price holds above 827 (S1 pivot) and no invalidation signal appears (weekly candle closing lower below 821.5), the trend continues. Target price is 840.84 (based on a 1:1.7 reward/risk ratio). Operationally, build positions in tranches within the 832–833.5 range, hold for 1–2 weeks, and add on a break above 835. The core of this scenario is price holding key support, with short covering driving the upside.

Bull case (probability 20%): Accelerated breakout, challenge prior high

If the night session or intraday effectively breaks the 835 resistance with a corresponding rise in open interest, upside space opens. Target price is 841.14 (based on a 1:1.4 reward/risk ratio). Trigger condition: price holds above 835 with a significant increase in volume. Operationally, chase longs after breakout confirmation, move stop-loss up to 830, and shorten the horizon to 1–5 days. This scenario requires watching whether macro data (e.g., 10-14 CPI/PPI) delivers unexpectedly positive results, as well as further strengthening of the spot basis.

Bear case (probability 15%): Breakdown, shift to watch

If price effectively breaks below 827 (S1 pivot), or the weekly candle closes lower below 821.5, the trend weakens and the original moderately bullish logic fails. Target price is the 821–823 range. Operationally, immediately close long positions and shift to a wait-and-see stance, awaiting a new right-side signal. This scenario implies that shorts have regained control; be alert to inventory drawdowns falling short of expectations or macro downside shocks.

VIII. Trading Strategies & Risk Management

Strictly execute the set strategy: long entry at 832, stop-loss at 826.69, target 840.84, horizon 1–2 weeks, reward/risk 1:1.7; or long entry at 833.5, stop-loss at 828.19, target 841.14, horizon 1–5 days, reward/risk 1:1.4. Stop-loss levels are set at 1.1x ATR14 of 4.8214, i.e., 5.31 points, ensuring coverage of normal volatility noise. Risk per lot is 578 CNY (including fees and slippage); the single-trade risk budget of 6,697 CNY corresponds to a reference cap of 11 lots. Position sizing follows the principle that single-trade risk does not exceed 2% of total capital; the initial position does not exceed 5 lots, and if price breaks above 835 with rising open interest, it may be increased to 8 lots, but total risk exposure must not exceed the cap. If price falls below 827, or the weekly candle closes lower below 821.5, exit immediately via stop-loss; do not hold losing positions.

IX. This Week's Data Calendar

Beijing time October 14 at 09:30; the US releases CPI y/y and PPI y/y data on October 13 at 21:30. Expectations and prior values are not listed. This affects the ferrous, nonferrous, and chemicals sectors, indirectly transmitting to log demand. No major data on other dates; the market is focused on price action itself and changes in open interest.

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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