1. Report Industry Investment Rating - No relevant content provided 2. Core View of the Report - The launch of monthly average price futures contracts (covering LLDPE, PVC, and PP) by the Dalian Commodity Exchange is an important innovation for the futures market to serve the real economy. It fills the gap in the domestic average price futures contract type, enriches the domestic derivatives market products, and promotes the diversified and refined development of the futures market [7][12]. - Monthly average price futures can provide a price reference for the stable production and operation of the spot industry, help smooth price fluctuations, and meet the diverse risk management needs of enterprises. It simplifies the hedging process, reduces operating risks and costs, and improves the flexibility of capital use [12]. 3. Summary According to Relevant Catalogs 3.1 Average Price Futures Contract Listing - Average price futures are contracts based on the average price, settled in cash at maturity. The monthly average price futures contracts for three chemical products (LLDPE, PVC, and PP) will be listed for trading at 21:00 on October 28, 2025, with night trading available. The initial listed contracts are for the 2602, 2603, and 2604 months, and new contracts will be added monthly to cover six near - month contracts. The listing benchmark price is the settlement price on October 28, 2025 [7]. 3.2 Background of the Listing of Monthly Average Price Futures Contracts 3.2.1 International Overview of Monthly Average Price Futures - Internationally, monthly average price futures are mainly concentrated in industries where spot trading uses average price pricing, such as crude oil, petrochemical products, and non - ferrous metals. Multiple international exchanges have launched monthly average price futures to meet the pricing and hedging needs of the industry. For example, CME launched WTI crude oil monthly average price futures in 2006, ICE launched monthly average price futures contracts for Brent crude oil and natural gas in 2008, and LME launched non - ferrous metal monthly average price futures in 2014. International average price futures are divided into two types based on price sources: those using futures prices and those using spot prices [8]. 3.2.2 Plastic Product Trade Pricing Model - In international trade, plastic products such as polyethylene widely use the average price trade model. Overseas producers and traders often prefer to use the average price model to sign contracts with downstream customers. In domestic trade, the pricing models are more diverse, including "fixed price", "basis point pricing", weekly and monthly average prices. The average price trade can smooth short - term fluctuations [9][10]. 3.2.3 Domestic Chemical Futures Foundation and Conditions for Launching Monthly Average Price Contracts - The futures of polyethylene, polyvinyl chloride, and polypropylene were launched on the Dalian Commodity Exchange in 2007, 2009, and 2014 respectively. In 2024, their average daily trading volumes were 340,000 lots, 1.06 million lots, and 340,000 lots respectively, and the average daily open interests were 510,000 lots, 1.12 million lots, and 520,000 lots respectively. The proportion of legal entity customer positions in these three chemical futures was relatively high, laying a good foundation for the launch of monthly average price futures contracts [11]. 3.3 Significance of the Listing of Monthly Average Price Futures Contracts - It fills the gap in the domestic average price futures contract type, enriches the domestic derivatives market products, and promotes the diversified and refined development of the futures market. - It provides a relatively stable price reference for the market, helps smooth price fluctuations, and improves the stability of the petrochemical industry chain. In 2024, the annualized volatility of the daily prices of polyethylene, polyvinyl chloride, and polypropylene futures was 7.8%, 14.4%, and 7.4% respectively, while that of the monthly average prices was 4.3%, 7.6%, and 4.3% respectively. - It simplifies the hedging process, reduces operating risks and costs, and improves the flexibility of capital use [12]. 3.4 Settlement Method of Average Price Futures Contracts - Monthly average price futures contracts use a three - stage settlement method: before the month before the contract month, the daily settlement price is the daily settlement price of the corresponding physical delivery futures contract; in a trading day of the month before the contract month, the daily settlement price is calculated as the average of the daily settlement prices of the corresponding physical delivery futures contract in all trading days of that month, giving a higher weight to the latest trading day; on the last trading day of the monthly average price, the daily settlement price is the arithmetic average of the daily settlement prices of the corresponding physical delivery futures contract in all trading days of the month before the contract month, and cash settlement is carried out on the last trading day [13][14]. 3.5 Interpretation of the Content of Monthly Average Price Futures Contracts 3.5.1 Trading Code - The trading codes for the monthly average price futures contracts of linear low - density polyethylene, polypropylene, and polyvinyl chloride are "L Contract Month F", "PP Contract Month F", and "V Contract Month F" respectively. The contract months are from January to December. Other aspects such as trading unit, trading time, handling fee, margin, and price limit are the same as those of the corresponding physical delivery futures contracts [18]. 3.5.2 Last Trading Day and Delivery Date - The last trading day and delivery date of the monthly average price futures contracts for linear low - density polyethylene, polypropylene, and polyvinyl chloride are the last trading day of the month before the contract month. For physical delivery futures contracts, the last trading day is the 10th trading day of the contract month, and the last delivery date is the 3rd trading day after the last trading day [19]. 3.5.3 Delivery Method - The three chemical monthly average price futures contracts use cash settlement, where the exchange settles the profits and losses of both parties based on the settlement price and closes the open contracts at maturity without physical transfer [20]. 3.5.4 Position Limit - The position limits of the three chemical monthly average price futures contracts and physical delivery futures contracts are set separately. The position limit standard for the monthly average price futures contracts is set to one - fifth of the original physical delivery futures contract limit standard, and the position limit standard for the physical delivery futures contracts in non - delivery months is adjusted to four - fifths of the original standard. The position limit for individual customers in the delivery month is 0 [21].