📅 2026-10-09 · PP · 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 Polypropylene Main Continuous (DCE.PP) In-Depth Analysis Report | Bullish Bias | 2026-10-09

Conclusion: Bullish bias. Polypropylene main continuous surged strongly in the night session on the basis of the 10-08 settlement at 9074; the current intraday price of 9242 is approaching the 20-day channel upper band at 9275, with active long positioning pushing the price above the 5-day high of 9257 and holding above the 9300 level. Drivers include crude crack spreads remaining at elevated levels, overall valuation repair across chemicals, and pre-holiday restocking expectations. Technically, ATR14 at 275.57 indicates rising volatility, and the night session gain of 2.61% confirms momentum. Invalidation conditions: if the night session falls back below 9150 or the daily close loses the pivot P at 9083, the trend turns weaker.

I. Bottom Line & Directional Bias

Conclusion: Moderately bullish. Polypropylene main continuous (DCE.PP) rallied strongly in the night session on top of the 10-08 settlement of 9074; the current intraday price of 9242 is approaching the 20-day channel upper bound of 9275, with active long position builds pushing the price above the 5-day high of 9257 and holding firmly above the 9300 level. Drivers stem from elevated crude cracking spreads, valuation repair across chemicals, and pre-holiday restocking expectations; technically, ATR14 of 275.57 indicates amplified volatility, and the night session gain of 2.61% confirms momentum. Direction invalidation: if the night session falls back below 9150 or the daily close loses the pivot P of 9083, the trend turns weak.

Three core reasons:

1. Strong price structure: the 10-08 settlement of 9074 is +8.27% versus 20 days ago, and the night session close of 9311 is +2.61% versus settlement; the probability of breaking above the 20-day channel upper bound of 9275 is very high, and the main contract notional open interest rose by CNY 2.798bn, reflecting active long position builds rather than short covering.

2. Macro and cost support: the oil-gold ratio of 0.022 sits at the 92.06th percentile over 1 year, and the cracking spread of USD 69.72/bbl remains elevated, providing strong cost-side support to polypropylene from crude; the dollar index at 102.11 edged lower, favorable for commodity pricing.

3. Seasonal window: over the past 12 years, the average move over 20 trading days from the same date is -2.84%, but October this year has already seen a +10.95% 5-day gain; the historical worst of -16.78% in 2021 has not materialized, and the market is in a seasonal rebound window with pre-holiday restocking expectations reinforcing it.

Direction invalidation: if the night session falls back below 9150 or the daily close loses the pivot P of 9083, the trend turns weak and requires reassessment.

II. Price Action & Technical Analysis

Polypropylene main continuous (DCE.PP) rallied strongly in the night session on top of the 10-08 settlement of 9074; the current intraday price of 9242 is approaching the 20-day channel upper bound of 9275, with active long position builds pushing the price above the 5-day high of 9257 and holding firmly above the 9300 level. Technically, ATR14 stands at 275.57 (2.98%, full intraday range) and RV20 at 34.5%, indicating significantly amplified volatility. The 20-day channel range is 8314–9275; the current price sits at the 96.6th percentile, near the channel upper bound, and if the night session continues higher, a break above 9275 could open further upside. Pivot P is 9083, R1 is 9416, and S1 is 8909; the current price lies between P and R1, and the night session close of 9311 is already near R1 of 9416—if broken, the target extends above 9416.

On the weekly chart, the last completed weekly bar (2026-09-28 to 2026-09-30) closed at 8631 with a weekly change of 0%. This week (starting 2026-10-08, 1 trading day) is not yet closed and is tentatively quoted at 9242 (+7.08%); no weekly conclusions may be drawn from it. Over the last 5 settlement daily bars, on 10-08 the day session high was 9257, low 8750, close 9242; the night session opened at 9241, high 9320, low 9152, close 9311—+0.75% versus the day session close and +2.61% versus settlement, showing strong night session momentum.

Technically, the probability of a break above the 20-day channel upper bound of 9275 is very high, and the main contract notional open interest rose by CNY 2.798bn, reflecting active long position builds rather than short covering. If the night session falls back below 9150 or the daily close loses the pivot P of 9083, the trend turns weak and requires reassessment. With volatility currently amplified, ATR14 of 275.57 implies a full intraday range of up to 2.98%, so trading should pay attention to night session volatility risk.

III. Supply-Demand Balance & Fundamental Drivers

Polypropylene's fundamental drivers mainly come from the cost side and seasonal restocking expectations. The crude cracking spread of USD 69.72/bbl remains elevated, and the oil-gold ratio of 0.022 sits at the 92.06th percentile over 1 year, indicating strong cost support from crude to polypropylene. The dollar index of 102.11 edged lower, favorable for commodity pricing. On the macro front, CPI and PPI data will be released on 10-14 and are expected to affect the ferrous, nonferrous, and chemicals sectors, but the data have not yet been released and are not included in the conclusion for now.

On supply and demand, main contract open interest on 10-08 was 646,913 lots, up 60,554 lots on the day; main contract notional open interest was CNY 29.89bn, up CNY 2.798bn on the day, reflecting active long position builds and capital inflows. Seasonally, over the past 12 years the average move over 20 trading days from the same date is -2.84%, the median -1.5%, with gains in 4 of 12 years, the best being +9.17% in 2016 and the worst -16.78% in 2021. October has already seen a +10.95% 5-day gain this year, the historical worst has not materialized, and the market is in a seasonal rebound window with pre-holiday restocking expectations reinforcing it.

If crude prices fluctuate or macro data surprise, cost-side support could be affected. The current price of 9242 is approaching the 20-day channel upper bound of 9275; if broken, the target extends above 9416. Direction invalidation: if the night session falls back below 9150 or the daily close loses the pivot P of 9083, the trend turns weak and requires reassessment.

IV. Positioning & Fund Flows

Top-20 seat positioning shows DCE.PP polypropylene total open interest of 822,397 lots, up 44,071 lots on the day; long positions of 772,719 lots, up 46,392 lots on the day; short positions of 49,678 lots, down 2,321 lots on the day; net long of 49,678 lots, down 2,321 lots on the day. The net long direction is clear, but the daily decline of 2,321 lots indicates short covering or long liquidation, which should be analyzed in conjunction with price moves. Main contract notional open interest was CNY 29.89bn, up CNY 2.798bn on the day, with open interest +60,554 lots and price change +7.8%, representing an open-interest-build rally with active long position builds rather than short covering.

Regarding COT weekly change versus price divergence, the last completed weekly bar (2026-09-28 to 2026-09-30) closed at 8631 with a weekly change of 0%. This week is not yet closed and is tentatively quoted at 9242 (+7.08%); no weekly conclusions may be drawn from it. The positioning structure shows active long position builds, with price and open interest moving in the same direction—no divergence. On implied versus realized volatility, ATR14 is 275.57 (2.98%, full intraday range) and RV20 is 34.5%; volatility has amplified, indicating an active market sentiment.

On fund flows, main contract notional open interest rose by CNY 2.798bn, reflecting active long position builds and capital inflows. If the night session falls back below 9150 or the daily close loses the pivot P of 9083, the trend turns weak and requires reassessment. Net long currently stands at 49,678 lots, down 2,321 lots on the day; attention should be paid to the impact of short covering or long liquidation on price.

V. Cross-Asset Relative Value & International vs China Markets

On cross-asset relative value, the gold-silver ratio of 69.95 sits at the 80.16th percentile over 1 year and the 26.72nd percentile over 3 years, indicating gold is relatively strong versus silver; the copper-gold ratio of 1.58 sits at the 96.83rd percentile over 1 year and the 56.61st percentile over 3 years, indicating copper is relatively strong versus gold; the oil-gold ratio of 0.022 sits at the 92.06th percentile over 1 year and the 47.88th percentile over 3 years, indicating crude is relatively strong versus gold. The cracking spread of USD 69.72/bbl remains elevated, providing strong cost support from crude to polypropylene. The dollar index of 102.11 edged lower, favorable for commodity pricing.

On international versus China market comparison, polypropylene is a China domestic product with no direct international-to-China comparison data, but the crude cost side transmits through cracking spreads. The current price of 9242 is approaching the 20-day channel upper bound of 9275; if broken, the target extends above 9416. Direction invalidation: if the night session falls back below 9150 or the daily close loses the pivot P of 9083, the trend turns weak and requires reassessment.

On the macro front, CPI and PPI data will be released on 10-14 and are expected to affect the ferrous, nonferrous, and chemicals sectors, but the data have not yet been released and are not included in the conclusion for now. Current cross-asset relative value shows strong cost-side support from crude, and polypropylene, as a chemical, benefits from cost transmission. If crude prices fluctuate or macro data surprise, cost-side support could be affected.

VI. Historical Statistics & Seasonality

Based on statistics for the same date over the past 12 years covering the subsequent 20 trading days, Polypropylene main continuous (DCE.PP) within cycles initiated on October 9 has an average return of -2.84% and a median decline of -1.5%. Historically, only 4/12 years were up years, with 2016 the best performer, recording a +9.17% gain; 2021 was the weakest, with a maximum drawdown of -16.78%. The market is currently in a seasonally bearish statistical zone, but actual price action has significantly diverged from the historical mean. As of October 8, the 5-day gain has reached +10.95% and the 20-day gain +8.27%, not only fully erasing the seasonal average decline but also far exceeding the median level. This indicates that current drivers (crude oil cost support, pre-holiday restocking expectations, and active fund open interest build) have overwhelmed seasonal resistance. The historical extreme of -16.78% in 2021 has not materialized, confirming that the current fundamental logic is stronger than seasonal inertia. The statistics show that, despite a bearish long-term seasonal bias, short-term momentum and fund flows indicate long-side dominance; historical data serve only as background reference, and actual trading should be based on the current price structure and fund flows.

VII. Scenario Analysis

Base case (probability 60%): Prices extend the modestly bullish trend, with a target of 9717. Trigger conditions: the night session holds above 9150 and the daily close stands firm above pivot P at 9083. The logic lies in crude crack spreads remaining elevated, with active long open interest build driving prices above the 20-day channel upper bound at 9275 and strong technical momentum. Trading recommendation: go long on dips near 9242, stop-loss at 8966, target 9717, horizon 1–2 weeks. If prices break above the 9416 resistance, further upside can be targeted.

Bullish case (probability 25%): Prices accelerate upward, breaking 9717 and challenging the 10000 round-number level. Trigger conditions: crude oil prices rise further, crack spreads widen above USD 70/bbl, and macro data (e.g., CPI/PPI) come in better than expected for the chemicals sector. Trading recommendation: build positions in tranches within the 9242–9300 range, move stop-loss up to 9150, target 10000. Volatility may expand further in this scenario; monitor ATR14 changes.

Bearish case (probability 15%): Prices pull back to test support, targeting 8909. Trigger conditions: the night session breaks below 9150 or the daily close loses pivot P at 9083, with long open interest build momentum fading. Trading recommendation: stay on the sidelines; if a break below 9150 is confirmed, consider a light short trial, stop-loss at 9300, target 8909. This scenario has a low probability, but invalidation conditions must be strictly monitored; switch to a defensive stance immediately once triggered.

VIII. Trading Strategies & Risk Management

Established strategy: Long / Entry 9242 / Stop-loss 8966 / Target 9717 / Horizon 1–2w / Risk-reward 1:1.7. The stop-loss is set at 8966, 276 points from the entry, equal to 1×ATR (ATR14 275.57), ensuring it is not triggered within normal volatility. Risk per lot is CNY 1,400 (including fees and slippage), and a single-trade risk budget of CNY 6,697 corresponds to a reference cap of 4 lots. Position sizing is based on risk budget control to avoid excessive exposure. Add/reduce rules: if prices break above 9416 and hold, add 1 lot and move the stop-loss up to 9242; if prices pull back near 9200 without breaking 9150, consider adding, with the stop-loss maintained at 8966. Stop-loss placement is based on ATR multiples to avoid being shaken out when volatility expands. The 1–2 week horizon covers the pre-holiday restocking window and avoids cross-month risk.

IX. This Week's Data Calendar

Beijing time October 14, 09:30: U.S. CPI y/y and PPI y/y data released on October 13 at 21:30 are expected to have a major impact on the ferrous metals, non-ferrous metals, and chemicals sectors. As the data have not yet been released, they are not incorporated into the conclusions for now, but close attention is warranted. Other events are not materially relevant; market focus is concentrated on crude oil prices and chemicals demand expectations.

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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