Plastic Futures: re "plastic" the industrial chain, moisten things silently
"with the continuous improvement of the financial derivatives market and the continuous innovation of derivatives tools, the business ideas and business models of the plastic industrial chain have also undergone earth shaking changes." Shaoshiping, assistant general manager of Zhejiang tomorrow holding group and general manager of the chemical business department, said at the 2018 China Plastics Industry Conference held in Hangzhou on June 27
at the meeting, shaoshiping reviewed how financial derivatives played a subtle role in the development of the plasticizing industry chain in recent years, so as to promote the transformation and upgrading of the entire industry chain
from the listing of LLDPE futures in the big commercial exchange in 2007 to the use of futures tools by plastic enterprises in 2008, the pricing model based on futures prices has gradually become the mainstream of the industry. The management of market risks based on futures tools has also been integrated into the daily operations of enterprises. The use of futures in the plastic industry has unknowingly gone through more than a decade of trials and tribulations
for more than ten years, the road has been smooth and quiet.
the listing of LLDPE futures of Dachang exchange in 2007 has played a milestone role for the upstream, middle and downstream enterprises of the entire plastic industry to participate in price risk management. According to shaoshiping's review, before 2008, the plastic industry still adopted the traditional trade model based on purchase and sale, and the industry's awareness and participation in futures were not high. But in 2008, this phenomenon has changed
"The financial crisis in 2008 sounded an alarm for enterprise operation and management, and everyone still has lingering fears. Under such circumstances, the demand for futures hedging is that we can still find traces of ceramic materials on some equipment - the right button of a flagship equipment of lumia series adopts a material called zirconium 2 boride, which is more prominent. The listing of PVC futures of Dachang exchange in 2009 further enriched the financial derivative Rockwell hardness available to plastic and chemical enterprises Experimental schematic tools. The plastic industry is characterized by sharp rises and falls in prices, and enterprises in the industrial chain are struggling in the cracks. " Shaoshiping pointed out
Zhejiang Sibang Chemical Co., Ltd. is the earliest company in basis trading in China. Chen Yufeng, general manager of the company, said that he has been using futures instruments in the past five years and has used them as a core trade tool. "Now we have to do a good job in commodity trading business. From our perspective, innovation has been very difficult. On the basis of doing a good job in the core business of trade, if we use futures and options tools, we may be doing a little innovation or serving this industry."
from 2014 to 2015, the plastic industry made a leap forward in the use of futures instruments. The price discovery function of futures effectively guided the cyclical linkage of the industry
"polypropylene futures were listed in 2014, diversifying the variety of financial derivatives instruments, and once again adding risk management tools for plasticizing enterprises. At that time, the international crude oil price fell sharply, and most commodities in the energy and chemical sector maintained a trend decline. The price fluctuation was relatively large, and the trade model dominated by buying hedging swept the market." Shaoshiping saidWang Qiang, vice president of Huatai Futures Co., Ltd., said that the demand for risk management in the market actually exists objectively. With the introduction of various policies, the time, place and people are in harmony, and the rapid growth of the market is reasonable and natural
futures pricing has become the mainstream trade model subversion
the traditional trade model was subverted in 2016. "In 2016, basis trade has become a trendsetter in the whole plastic industry chain. Basis pricing has also become the focus of market attention. In addition to the customers in the industrial circle learning and using basis trading, more investment institutions and futures companies have also participated in the basis trade. The market is also becoming more and more mature and rational, intensifying professional competition." Shaoshiping said
shaoshiping said that the ex factory price of petrochemicals, the disk price of futures and the spot market price are often in a game, and financial pricing will gradually become a trend. "In 2017, this phenomenon became more and more prominent, and the fundamental changes or fundamental drivers of the whole plastic industry became the core of the whole price fluctuations in the futures market."
driven by the financial derivatives market, shaoshiping pointed out that due to the increasingly frequent regional price differences, the national unified market is forming, and the price differences between various regions are becoming smaller and smaller, prompting the upstream to develop new products and high value-added products, strive to meet the upgrading of downstream consumption, and also carry out echelon transformation and substitution
"2018 is a year of integration of industry and finance and financial innovation. With the promotion of futures, financial derivatives, especially options by big commercial exchanges, especially the launch of the OTC derivatives pilot project last year, the trade model with rights has been increasingly recognized by the industrial chain, and gradually used in this process. Our tomorrow control first lies in the laboratory environment, and stocks have also participated in this project. And in the process of serving the industrial chain, we found that for the upstream The trade with rights of option hedging is very popular. The upstream can obtain the right to lock the transaction price for a certain period of time when paying a certain premium to meet its demand for production and sales balance. "
in recent years, the pricing model based on futures prices has gradually become the mainstream of the plastic industry, and the management of market risks based on futures instruments has also been integrated into the daily operations of enterprises. "As the market continues to deepen its understanding of futures instruments, the way the plastic industry participates in futures has gradually developed from traditional hedging to new models such as off-site options and basis trade, and the combination of futures and cash is more flexible and close." Jiang Wei, director of the Industrial Development Department of the Institute, said in his keynote speech
at present, the functions of the plastics futures market of Dachang exchange have been effectively played, and have been deeply integrated into the overall situation of the transformation of the domestic plastics industry. On the one hand, the correlation between the futures prices of LLDPE, PVC and PP in 2017 was 0.92, 0.96 and 0.97 respectively, which increased year-on-year. The futures prices further served as the "barometer" and "weathervane" of the plastic industry. On the other hand, the hedging effectiveness of the three major plastic futures varieties is getting better and better. In 2017, the hedging rate maintained a good level of about 90%. The main reason for the "ballast stone" role of the plastic industry is that it is solid, easy to use and simple
the vast world is promising
"The plastic industry is not only a traditional industry with a long history, but also a modern new material and strategic emerging industry, which has a bright future. The plastic industry has played an important supporting role in the development of the national economy. While seeing the achievements, we should also see that there are still unbalanced and insufficient structural contradictions in the development of China's plastic products industry, and the phenomenon of excess supply of medium and low-end products and insufficient supply of high-end products has not been solved Fundamental changes. There are difficulties in the economic operation of enterprises, such as the rapid rise in costs, the difficulty of financing and the high cost of financing, which have not been fundamentally alleviated. In particular, in recent years, the sharp rise in the price of upstream raw materials has brought great challenges to the development of the industry. " He ye, vice president of China Light Industry Federation, said
"at present, all industries are facing market price risks, especially in the period of economic slowdown, price risk management is an unavoidable topic for enterprises. And the role of futures in avoiding the risk of price fluctuations is self-evident." Relevant guests said
on the basis of maintaining the continuous play of market functions, the big business office continues to explore new ideas and new models to serve the real industry
"the new idea is reflected in the transformation from encouraging participants to directly use the futures market for hedging to providing more tools, modes and channels, and guiding the indirect use of the futures market for risk management; from traditional methods such as meetings and training, it is transformed into carrying out industrial service innovation pilot projects, providing direct OTC business practice opportunities for the real industry." Jiang Wei said
under the guidance of the above new ideas, in 2014, the large commercial exchanges, together with futures companies, securities companies, banks and other financial institutions, began to explore and carry out the pilot of OTC option service industry, initiated the "insurance futures" model in 2015, and launched the pilot of basis trade for the first time in 2017. This year, more over-the-counter options and basis trade pilots have been launched for the plastic industry to further promote the integration of the plastic industry
in terms of over-the-counter option pilot, in 2017, with the joint participation of 21 futures companies, 5 securities companies and 3 banks, Dashang completed 42 pilot projects, a total of 225 transactions, including 27 agricultural products projects and 15 industrial products projects, involving 13 futures varieties. In terms of service subjects, there are both traders such as tomorrow holding group and chemical producers such as Yibin Tianyuan
relevant market participants pointed out that the OTC option business is an "insurance like" product, which has the advantages of rich strategies and easy to understand. It can provide personalized customized services for enterprise customers and avoid the shortcomings of the lack of enterprise professionals and financial pressure
"real enterprises must do those simple options instead of complex option structures. OTC options are products with established premiums, not products with large risks or uncertain losses." He pointed out that over-the-counter options are still in their infancy, and whether traders or customers providing over-the-counter options services need to gradually deepen their understanding of option trading strategies and risks
mature international commodity markets generally take futures prices as pricing references, and basis trade is an important pricing model. For the domestic plastic market, in recent years, traders and other industrial customers have gradually accepted and adopted the pricing method of basis trade. Nevertheless, there is still much room for the application of basis trade in related industries. In 2018, Dachang will continue to deepen the pilot of basis trade, encourage leading enterprises to participate, play a leading and exemplary role, improve the flexibility of scheme design, and provide sufficient space for participants. Through the basis trade pilot and market cultivation activities, promote the market to better understand futures, understand futures and use futures
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