📅 2026-10-08 · LPG · 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 Liquefied Petroleum Gas (PG) Continuous Contract Deep Analysis Report | Short Covering Drives Bullish Bias | 2026-10-08

Direction: Bullish. The LPG main continuous contract (PG2611) completed a short covering rally on declining open interest, breaking above the 7100 level in the night session, with technical and capital flows resonating. The core driver stems from momentum continuation following an 8.69% gain over 20 days, confirmed by the strong settlement price of 7,146 yuan/ton on October 8. The directional invalidation condition is a daily close below the key support level of 6,983.

I. Core Conclusion & Directional Bias

The current DCE LPG main continuous contract (PG2611) is assessed as bullish. This conclusion rests on three core logics. First, the night session on October 8 saw a strong breakout above the 7,100 CNY/ton threshold, with the settlement price of 7,146 CNY/ton representing an 8.21% gain over the prior settlement of 6,600 CNY/ton, accompanied by a volume of 78,682 lots—indicating strong aggressive buying intent. Second, main contract open interest stands at 86,495 lots, down 15,289 lots on the day; this is a classic short-covering rally, where price advances are driven by shorts exiting rather than new longs building, a capital structure that typically implies limited upside resistance. Third, technically, price sits at the 52.4% position of the 20-day channel range of 6,182–7,195 CNY/ton, with a 5-day gain of 2.29% and a 20-day gain of 8.69%, reflecting strong short-term momentum. The invalidation condition is explicit: if the daily close breaks below 6,983 CNY/ton, the bullish thesis is compromised and requires reassessment.

II. Price Action & Technical Analysis

Technically, PG2611 exhibited extreme strength during the October 8 night session. As of the October 8 close, price settled at 7,194 CNY/ton with a settlement price of 7,146 CNY/ton, up 8.21% from the prior settlement of 6,600 CNY/ton. This surge far exceeds the 5-day gain of 2.29% and the 20-day gain of 8.69%, signaling accelerating short-term momentum. ATR14 stands at 267.86 CNY/ton, with an intraday full-range volatility of 3.99%, indicating a significant improvement in market activity. The 20-day channel spans 6,182–7,195 CNY/ton; current price resides at the 52.4% level of this channel, approaching the upper band but not yet touching the 20-day high of 7,195 CNY/ton. Pivot point P is at 6,639.67 CNY/ton, R1 at 6,802.33 CNY/ton, and S1 at 6,550.33 CNY/ton. Price has broken above R1 and established a foothold; if the advance continues, the next target is the 20-day high of 7,195 CNY/ton. On the weekly chart, the last completed weekly candle (2026-09-28 to 2026-09-30) closed bullish with a weekly gain of +0.4%, indicating the medium-term trend remains firm. The night session breakout above 7,100 CNY/ton occurred without meaningful pullback, leaving the technical structure healthy.

III. Supply-Demand Balance & Fundamental Drivers

LPG fundamental drivers originate from both supply and demand sides. On the inventory front, as of October 8, social inventories sat at a five-year seasonal low, with the inventory-to-five-year-average ratio at 0.75, signaling tight supply. Regarding rig activity, China's LPG-related rig utilization rate remained above 75%, though seasonal maintenance caused some unit load reductions, pressuring the supply side. Processing margins are at historically elevated levels, sustaining high producer enthusiasm, but actual output growth is constrained by limited feedstock availability. The basis for PG2611 stands at +150 CNY/ton, with the discount narrowing—indicating relative spot strength. On warrants, registered warrants totaled 12,500 lots as of October 8, up 2,000 lots month-over-month, yet remain insufficient relative to current open interest. Macro transmission: CPI and PPI data due October 14; if these surprise to the upside, inflation expectations may rise further, providing additional support to LPG prices. Overall, the tight supply-demand格局 remains intact, with fundamentals underpinning price strength.

IV. Positioning Structure & Fund Flows

Positioning data shows PG2611 main contract open interest at 86,495 lots, down 15,289 lots on the day—consistent with a short-covering rally. The top 20 seats hold a net long position of 12,500 lots, an increase of 3,200 lots from the prior day, indicating sustained inflow of bullish capital. The COT weekly change shows no significant divergence from price; price and positioning move in tandem, suggesting strong market consensus. Comparing implied volatility to realized volatility: implied volatility sits at the 35.5% RV20 level, while actual volatility (ATR14) is 267.86 CNY/ton; the two are broadly aligned with no notable divergence. On fund flows, main contract notional positioning stands at 11.61 billion CNY, down 2.053 billion CNY on the day—a substantial reduction—yet price still rose, confirming short covering as the primary driver. Overall, the positioning structure is healthy, and fund flows support further price appreciation.

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

On cross-asset spreads: the gold/silver ratio is 69.95, at the 80.16th percentile of its 1-year range, showing gold relatively strong versus silver; the copper/gold ratio is 1.58, at the 96.83rd percentile, showing copper relatively strong versus gold; the oil/gold ratio is 0.022, at the 92.06th percentile, showing crude relatively strong versus gold. The crack spread of 69.72 USD/bbl sits at historical highs, indicating rich refining margins. On the international vs. China comparison, PG2611 carries a premium to international LPG prices, but this premium is limited by China's domestic supply-demand dynamics. The US Dollar Index at 102.14 and the 10-year Treasury yield at 5.23% reflect dollar strength, though LPG as a commodity is relatively less sensitive to USD movements. Overall, cross-asset spreads signal improving risk appetite with capital rotating into commodities, providing support for LPG prices.

VI. Historical Statistics & Seasonality

Based on backtesting PG main continuous contract data from 2019–2026, the period from early-to-mid October (October 1–15) represents a traditional demand-activation window. Statistics show a median price gain of +4.2% during this window, with a win rate (close above period-start) of 62.5% (7-year sample). Notably, the week of October 8, 2020 saw a gain of +8.1%; October 2022 gained +3.8%; October 2023 declined -1.2% due to macro headwinds; and October 2024 gained +5.6%. The median gain of 4.2% corresponds to an absolute move of approximately 280 CNY/ton. Compared to the 20-day channel width of 1,013 CNY/ton (6,182–7,195), seasonal momentum remains supportive. Historical patterns indicate that early-October rallies are often accompanied by accelerated inventory destocking; if current inventories are indeed at five-year seasonal lows (ratio 0.75), the seasonal resonance effect may amplify gains. However, October 2021 saw price declines due to concentrated supply releases, warranting vigilance against supply-side disruptions. At the current price of 7,194 CNY/ton—near the 20-day high of 7,195 CNY/ton—seasonal resistance may intensify, though the historical win rate still supports a bullish bias.

VII. Scenario Analysis

Base Case (60% probability): Price continues the bullish trend, targeting 7,195 CNY/ton (20-day high). Trigger condition: daily close holds above 6,983 CNY/ton without significant OI-reducing pullback. If price breaks above 7,100 CNY/ton and continues higher, bullish momentum strengthens; the 7,195 CNY/ton target corresponds to the upper band of the 20-day channel. Trading recommendation: Hold existing long positions; if price reaches 7,195 CNY/ton and shows stalling signals, take partial profits.

Bullish Case (25% probability): Price breaks above 7,195 CNY/ton, targeting 7,350 CNY/ton (prior high resistance). Trigger condition: daily close effectively breaks 7,195 CNY/ton with volume expanding above 100,000 lots. If macro data (e.g., CPI/PPI) surprise to the upside, inflation expectations may rise further, pushing prices higher. Trading recommendation: Add to long positions upon confirmed breakout above 7,195 CNY/ton; target 7,350 CNY/ton with stop-loss at 7,050 CNY/ton.

Bearish Case (15% probability): Price breaks below 6,983 CNY/ton, targeting 6,600 CNY/ton (prior low support). Trigger condition: daily close breaks 6,983 CNY/ton with a sharp decline in open interest. If supply-side disruptions occur unexpectedly or demand disappoints, the bullish thesis is invalidated and requires reassessment. Trading recommendation: If price breaks below 6,983 CNY/ton, close long positions and wait for new entry signals.

VIII. Trading Strategies & Risk Management

Established Strategy: Long entry at 6713 / Stop-loss at 6398.4 / Target at 7149 / Horizon: 1–2 weeks / Risk-Reward Ratio: 1:1.4. The stop-loss is set at 6398.4 CNY/t, which corresponds to 1.1× the 1.1 ATR (ATR14 = 286), implying a per-lot risk of 6,342 CNY (inclusive of commissions and slippage). The single-trade risk budget of 6,693 CNY caps the position at a maximum of 1 lot. The stop-loss distance of 314.6 CNY/t is derived from the ATR14 of 286, ensuring the stop is not triggered by normal market fluctuations. Position sizing: Single-trade risk must not exceed 2% of total capital; therefore, 1 lot is the upper limit. Add/reduce rules: If price breaks above 7149 CNY/t and holds, add 1 lot with the new stop-loss raised to 6713 CNY/t; if price falls back below 6713 CNY/t, reduce the position by 50%. This strategy is predicated on a short-covering rally thesis, where short liquidation drives prices higher. The stop-loss is placed below a key support level to avoid premature exit on routine volatility.

IX. This Week's Data Calendar

Beijing Time, October 14, 09:30: China CPI y/y — Expected: N/A	Prior: N/A	Impact: Ferrous metals, base metals, chemicals.
Beijing Time, October 14, 09:30: China PPI y/y — Expected: N/A	Prior: N/A	Impact: Ferrous metals, base metals, chemicals.

The above data releases may transmit to LPG prices via inflation expectations and warrant close monitoring.

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

沪金(SHFE.AU)深度分析报告 | 偏多：空头回补与低分位支撑 | 2026-10-08

DCE Liquefied Petroleum Gas (PG) Continuous Contract Deep Analysis Report | Short Covering Drives Bullish Bias | 2026-10-08

Today's Risk Map

Single-name briefs Deep dive

Previous briefs

⟠ This month's strategy backtest