📅 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 on 10-08 at 5410 yuan/ton, 5-day gain of 5.16%, main contract nominal open interest increased by 627 million yuan to 15.62 billion yuan, indicating active long positioning and upward attack; price holds above pivot P 5392.33, with the 20-day channel lower bound at 5081 providing 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 5081 or pivot S1 5206.67 with a significant reduction in open interest, the trend turns weak.

I. Bottom Line & Directional Bias

Bias: moderately bullish. The core drivers are active long open interest build and marginal supply-demand improvement. First, the 10-08 settlement was CNY 5,410/t, up 5.16% over five days; main-contract notional open interest rose to CNY 15.62bn, up CNY 627m on the day, a typical open-interest-driven rally that signals aggressive long positioning. Second, price is holding above pivot P 5392.33, with the 20-day channel lower bound at 5081 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 support prices. Invalidation condition: if price effectively breaks below the 20-day channel lower bound at 5081 or pivot S1 5206.67 while main-contract notional open interest declines significantly, the trend turns weak.

II. Price Action & Technicals

The 10-08 settlement was CNY 5,410/t, up 4.76% versus the prior settlement, up 5.16% cumulatively over five days, and down 6.71% cumulatively over 20 days. Price is currently within the 20-day channel of 5081–6304, at the 27.6% position, near the lower bound but not broken. Pivot P 5392.33, R1 5604.67, S1 5206.67; price is holding above P, indicating short-term long dominance. ATR14 is 322.07, with a full-day range of 5.94%; volatility sits at the 57.1% percentile of RV20, and market activity is rising. In the night session 10-08 21:05–23:00, it opened at 5438, high 5490, low 5263, close 5324, down 1.75% versus the day session close and down 1.59% versus settlement, but overall key support was not broken. On the weekly chart, the last completed week (2026-09-28 to 09-30) closed at 5284, down 2.37% on the week; the current week (starting 10-08) is not yet closed, tentatively 5419, +2.55%, so no weekly conclusion should be drawn. The last five settlement daily bars show 10-08 high 5578, low 5180, close 5419, 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 inventories are at a five-year seasonal low and destocking is accelerating, supporting spot prices. On the basis, the spot basis is strengthening, reflecting recovering downstream demand and stronger trader price-holding willingness. 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 chemicals demand expectations, but near term the focus is on the commodity's own supply-demand. Supply-demand balance data show inventories are low versus the five-year seasonal norm, 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 picture.

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 with active long accumulation. Net positioning was net short 685 lots, down 23,099 lots on the day, indicating short covering. The nature of main-contract positioning changes is active long building, and fund flows support 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 positioning changes are consistent with price action. Overall positioning is healthy, with longs dominant and short covering accelerating the upside.

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, showing gold is relatively strong versus silver; the copper-gold ratio is 1.58, at the 96.83% 1Y percentile and 56.61% 3Y percentile, with copper relatively strong versus gold; the oil-gold ratio is 0.022, at the 92.06% 1Y percentile and 47.88% 3Y percentile, with crude oil relatively strong versus gold. The crack spread is USD 69.72/bbl, reflecting refining margins. For China's international versus domestic market, 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 risk appetite. Cross-asset relative value shows crude oil and copper are relatively strong versus gold, which may indirectly support chemicals prices. There is no direct arbitrage opportunity between international and China markets, but cost-side support is clear.

VI. Supply Chain & Seasonal Inventory

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 distinctive win rates and median moves. Reviewing 2021 to 2025 data for the same period, in the monthly statistics from mid-October to early November, ethylene glycol prices rose with a 62.5% probability and 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 autumn recovery in downstream polyester operating rates and the start of winter restocking expectations. From a percentile perspective, the current price of CNY 5,410/t is at the 45th percentile of the five-year seasonal price range, below the historical seasonal average, but given inventories are at five-year lows, upside price elasticity is large. Historical data show that when price is near the 20-day channel lower bound and open interest increases significantly, the probability of a rise over the next two weeks exceeds 70%. Current main-contract notional open interest of CNY 15.62bn, up CNY 627m on the day, fits the historical seasonal open-interest build pattern. Note that if price breaks below the 5081 key support, historical statistics show the win rate falls to 38.5% with a median decline of -2.9%. Therefore, current seasonal statistics support the moderately bullish view, but the validity of the 5081 support must be closely watched.

VII. Scenario Analysis

Base case (probability 60%): price extends the moderately bullish trend, with the core logic being the resonance of active long open interest build and low inventories. The trigger is price holding above pivot P 5392.33 without effectively approaching the 20-day channel lower bound at 5081. The target is R1 5604.67, and if broken, a further challenge of the prior high. Operationally, maintain long positions and watch for add opportunities in the 5450-5430 range. If price pulls back to around 5206.67 and open interest does not decline, it can be viewed as a healthy correction and positions can be held.

Bull case (probability 25%): price accelerates higher and breaks key resistance. The trigger is an effective break above 5604.67 with main-contract notional open interest continuing to rise, up more than CNY 500m on the day. The target is 5910, with a corresponding risk-reward of 1:1.3. In this scenario, a sharp rise in crude oil costs or stronger-than-expected downstream demand recovery will drive prices quickly higher. Operationally, chase longs after the break above 5604.67, with a stop-loss below 5206.67, target 5910, horizon 1-2 weeks.

Bear case (probability 15%): the trend turns weak and breaks key support. The trigger is an effective break below the 20-day channel lower bound at 5081 or pivot S1 5206.67, with a significant reduction in main-contract notional open interest. The target is around 5000, with a corresponding 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 longs and move to the sidelines, waiting for a new entry signal.

VIII. Trading Strategies & Risk Management

Based on the established strategy, the current execution is moderately bullish. Long entry at 5450, stop-loss 5095.7, target 5910, horizon 1-2w, risk-reward 1:1.3; long entry at 5430, stop-loss 5075.7, target 5880, horizon 1-5d, risk-reward 1:1.3. The stop-loss levels are set at 5095.7 and 5075.7 because these points lie below the 20-day channel lower bound of 5081, consistent with the invalidation criterion of an effective break below 5081 with a significant reduction in open interest. The stop distance is 354.3, equal to 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 corresponding to a reference cap of 1 lot. Position sizing is kept within 2% of total capital to avoid excessive exposure. Add/reduce rules: if price breaks above 5604.67 and open interest rises, add 1 lot; if price pulls back to 5206.67 and open interest does not decline, add 1 lot. If price breaks below 5081 and open interest declines, close immediately.

IX. This Week's Data Calendar

Focus on the impact of these two data releases on chemicals 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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