Core Viewpoint - The Dalian Commodity Exchange (DCE) has officially approved the launch of monthly average futures contracts for LLDPE, PVC, and PP, set to take effect on July 25, 2025, marking a significant upgrade in pricing mechanisms for these essential materials [16][32]. Group 1: Introduction of Monthly Average Futures - The new monthly average futures contracts will not involve physical delivery but will settle based on the arithmetic average of the settlement prices of the corresponding physical delivery futures over the month [16][32]. - This innovation aims to provide enterprises with a more stable pricing reference, aligning with the continuous production and batch purchasing needs of businesses [17][19]. Group 2: Operational Details - The trading codes for the new contracts will be structured as follows: L for LLDPE, V for PVC, and PP for PP, followed by the contract month and an "F" to denote the monthly average [21][23]. - For example, the contract L2509F represents the LLDPE monthly average futures for September 2025 [23]. Group 3: Market Demand and Benefits - There is a growing market demand for a transparent and authoritative monthly average pricing reference system, which the DCE's new futures contracts aim to fulfill [32]. - The introduction of these contracts is expected to stabilize costs for companies, allowing them to lock in monthly prices and reduce the anxiety associated with daily price fluctuations [19][32]. Group 4: Risk Management and Settlement Mechanism - The DCE has designed a detailed settlement and risk management mechanism to ensure the smooth operation of the monthly average futures [34][40]. - The settlement price will be calculated based on the average of the daily settlement prices of the corresponding physical delivery futures, with more recent prices given higher weight [38][40]. Group 5: Broader Implications - The launch of monthly average futures is not just a tool upgrade but represents a deeper evolution in futures services for the real economy, enhancing the stability of the entire industrial chain [42][45]. - This development signifies a step towards a more mature pricing system in the Chinese market, reflecting the growing importance of these materials in everyday life and their role in market pricing dynamics [45].