With the development of domestic economy enters the new normal, slowing economic growth gradually, some industry overcapacity and demand began to emerge, all related businesses face difficulties. Under this background, the varieties of chemical products, such as iron ore futures prices fell.
In sharp fluctuations in commodity prices, the domestic futures markets become entity enterprise very important safety channels, some companies use futures tools to circumvent the risk of raw material and product prices, realize the stable operation. From this day, this newspaper launched under the 'new normal enterprises participate in the city to the tour' series, and the market share these businesses to participate in market insight and experience.
Trend of 'basis make a decision, make a decision how much', this was seen as hedging in the bull market in chemicals. But since the end of 2014, many enterprises in the face of chemical prices continued to fall, feel the hedge operation do not know how to start. For chemical market presents the new normal, looking for a 'hook' survival has become an important topic of the chemical enterprise.
To shift from a seller's market to a buyer's market
Chemical raw material is given priority to with oil, coal and natural gas, have certain monopoly characteristics, upstream and belong to for some chemicals, industry admittance threshold is higher. Therefore, in the past with the demand of cases, the upstream bargaining power is stronger, can say at the time of the chemical industry is typical of a seller's market.
In recent years, a large number of coal chemical industry as well as PDH device put into production, upstream companies increasingly diversified and raw material structure, gradually to break the monopoly competition. Especially as China's economic growth is slowing, demand for commodities, chemicals demand growth become the new normal.
'now, PE industry in slowing the demand rapid increase, supply to profit; PP has entered the stage of excess supply, the increase in supply will continue down the new material price, and continuous extrusion feed back market share; PVC (4870,75.00, 1.56%) had excess supply, continue to give priority to with to capacity. 'the central plains futures analyst, li said.
'because the investment has time lag, in a slowdown in demand at the same time, the chemical production capacity continue to maintain rapid growth, thus appeared the situation of excess supply. 'investment in grain futures analyst goh choon phong told futures daily, as a result, the chemical industry profits began to decline, starts falling.
In addition, after the stock market crash, the substantial depreciation of the renminbi, trade enterprises increasingly cautious, long-term to maintain low inventory operation. Market is expected to polyolefin center of gravity will move down prices, futures premium spot, reverse market structure becomes the norm, the downstream enterprises generally adopt as you buy, use and low inventory operation mode.
'bargaining power significantly enhanced downstream, upstream production enterprise profits will be compressed further, the chemical industry is gradually transformed into a buyer's market. 'in goh choon phong view, although the raw material prices, but the terminal demand growth, especially in the middle and lower reaches enterprise traders profit will be markedly reduced.
To this, the relevant person in charge of east China, a big chemical trading company Mr. Chen. Traditional traders' survival and profit space is compressed, some enterprises has been forced to withdraw from the market this year. 'Mr. Chen said that the current traditional earnings is more and more difficult to spot, the traditional mode of the basic is zero profit or small profit, also faces the downstream factory default and the risk of bankruptcy.
Traditional management pattern has won't work
For example, in the case of Mr. Chen, the new normal, the change of the chemical industry market is far more than these. 'in the past only a few spot enterprises to explore the new business model, these two years the larger spot traders actively use futures tools and Internet tools to explore new trade patterns, such as phase combination, basis trading business and electronic commerce, etc. 'Mr. Chen thinks, in the face of the cruel market competition, many companies are rapidly mature, industry reshuffle is unprecedented.
But confusion for many companies, the past a lot of experience has not apply now. Such as the season before, now is the slack season, the season is not weak, the rhythm of the market as a whole is difficult to grasp.
In addition, since the end of 2014 chemical market began to enter into the long after Xiong Tu 'basis make a decision, how many' trend make a decision that the secret is no longer applicable. It is understood that in a bull market, companies tend to pursue the extra profits, not easily hedging. Only when the futures premium is more, exist risk-free arbitrage opportunities enterprises will consider hedging.
But since 2014, the overall trend of polyolefin is fall, the futures premium for a long time, rare risk-free arbitrage opportunities. 'in a bear market, the futures price is lower than the spot price, companies are often unable to sell value, watched prices fell. 'wuxi liyuan co., LTD., relevant personnel introduces, for can buy the value of the enterprise, due to long-term bearish market, if you buy, when futures below spot prices will eventually face a spot at the same time losses.
'about the futures, there are a lot of people will think of huge risks and profits. Enterprise positioning for futures tools are actually different, the end result is not the same. 'Mr. Chen told reporters that they first according to the characteristics of their own futures tools to locate exactly is used to do, is to manage risk or speculative profits. For spot enterprises, use futures tools management spot stock exposure is a good way. When the spot inventory accumulation too fast, but poor sales, the company actively use futures lock exposure of inventory stock, futures market is even taken as another sales channel, make delivery, and achieved good results.
In addition, since this year, Mr. Chen's chemical trading company also tried the relevant price business model. According to Mr. Chen, the current price is a significant deviation, according to the relevant futures contracts signed with upstream and downstream factory price purchasing and sales contract, lock in future cost or processing fee, also has obtained the good effect. 'for the spot enterprises, their value is greater than the significance of speculative profits. 'he have experience greatly.
Flexible use of phase combination operation now
'due to relatively far from east guangdong south China delivery warehouse, logistics cost is higher, the current price, delivery time, right now is often unable to achieve the objectives of the risk free trade, a large number of local goods to hedging in futures markets. The relevant person in charge of 'personally yours group, said this way doesn't work, just need to change the point of view.
Through the research, personally yours group found that south China market supply side are not new equipment put into production in the next five years, east China, north China market, built a lot of PDH and coal chemical projects, futures prices tend to follow spot prices in east China, north China market. And the south China market spot prices have been in the condition of relatively high, LLDPE) now spread reached 1000 yuan/ton, PP now spread up to 2000 yuan/ton.
'because the period now spreads in delivery month will tend to zero, we take the delivery month as the time of delivery, is far lower than the market price of the goods sold to customers, locking spreads in the futures market at the same time. 'the head thinks, in the case of basis risk can avoid, so that customers can get in east China, north China market of cheap goods.
'sometimes there will be a bad spot market price change on business, but as long as through hedging in futures markets in advance, can reduce the loss to a certain extent, locking the cost of enterprise, achieve the goal of stable operation. 'the official said.
'for the production enterprises, as a result of polyolefin in reducing the production profit, can repair the device, tight spot, lucrative, batch sell hedging in the futures market. 'only, li said, the downstream consumption enterprise maintain as you buy, use, low inventory operation can reduce risk, can also in the case of the futures premium or super fell sharply, by selling spot excess inventory, buying futures to hedge the risks of inventory loss. Traders can use its own information and channel advantage, combining period now or midpoints trade mode to avoid risk.
Goh choon phong think, in the current situation, the enterprise must carry out hedging, because at all times, there is the risk of falling prices, 'trend make a decision in jeopardy. Enterprise when admission depends on the basis, that is, 'how much basis make a decision. 'because of the market structure and purchasing habits change, the basis of the structure will change, enterprises need to study the basis of interval, select the appropriate entry point. 'he finally suggested.