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On July 6, PP, PVC and LLDPE options were officially listed for trading, which aroused great attention and extensive participation of market participants in the industry
.
Risk: magnified in turmoil
Risk: magnified in turmoilIn the post-epidemic era, there are still many uncertainties in the development of China and the global plastics industry
.
Zhu Fang, director of the Market and Information Department of China Petroleum and Chemical Industry Federation, summarized the risks faced by the petrochemical industry into three aspects: market price fluctuations, changes in consumer demand and industrial policy orientation
.
First of all, as petrochemical enterprises are the intermediate links in the plastics industry chain, changes in the upstream and downstream markets will affect the benefits of petrochemical enterprises, and price risk is the biggest challenge they face; secondly, changes in market demand are another risk factor, and domestic and foreign consumer market demand suddenly rises The drop directly affects the stable production of petrochemical enterprises; finally, there are industrial policy orientations, such as the "Opinions on Further Strengthening the Control of Plastic Pollution" announced by China in January this year, which will bring new challenges to the development of the petrochemical industry
.
Zhang Peichao, Deputy Secretary-General of China Chlor-Alkali Industry Association, believes that in the post-epidemic era, the global economic environment is showing a more complex and volatile situation.
The international economic and political situation is complex and geopolitical risks are still relatively large.
If global trade frictions continue to escalate, it will directly Affect China's PVC industry
.
As an intermediate link in the plastics industry chain, traders of PP, PE and PVC are more sensitive to market risks
.
Options: Show your skills in times of distress
Options: Show your skills in times of distressObviously, in the face of the increasingly complex risk management environment of the industrial chain, in addition to hedging in the traditional futures market, companies urgently need innovative tools for risk management and hedging transactions
.
In the first quarter of this year, due to the impact of the epidemic, most upstream companies experienced inventory accumulation, increasing the risk of inventory management
.
Similarly, for downstream product processing companies, OTC options also play an important role in hedging
.
According to Wei Feng, in order to combat the new crown pneumonia epidemic, Jiangsu Jiahe Chemical Co.
, Ltd.
responded to the national call and built a meltblown cloth production line
.
However, due to the extreme short-term shortage of polypropylene, the raw material for masks, and the sharp price fluctuations, Jiahe Chemical is facing huge market risks
.
In order to relieve its worries, Guotai Junan provided Jiahe Chemical with a free PP price insurance worth about 8 million yuan
.
The insurance avoids the risk of rising raw material prices by buying PP call spread options.
After the PP futures contract price exceeds 7,145 yuan/ton, Jiahe Chemical can obtain compensation, with a maximum compensation of 125 yuan/ton
.
The insurance involves 1,000 tons of PP, which meets the production volume of Jiahe Chemical for one month and can produce 250 million medical masks
.
Risk control: optimization in transactions
Risk control: optimization in transactionsAs a risk management tool, options are more flexible and changeable in risk management compared with futures, which is beneficial for enterprises to do a good job in risk control management
.
On the first day of options listing, Zhejiang Specialty Petrochemical Co.
, Ltd.
participated in the September option contract trading of PVC and LLDPE
.
"In an uptrend, some futures hedging orders are replaced with put option hedging to protect against downside risks and reduce the pressure on futures margins to cover floating losses
.
Moreover, if prices continue to rise, the value-added benefits of spot inventory can be obtained
.
"Song Shiwei, deputy manager of the company's financial investment department, introduced their risk control ideas
.
On the first day, the market bid-ask spread was relatively good, and the market makers responded quickly.
Zhejiang Specialty Petrochemical split the order into 20 to 30 small orders, and traded at the middle price
.
In Song Shiwei's view, with the popularity of options, there will be more and more industrial customers and investors participating in options
.
In particular, large-scale industrial customers usually have medium- and long-term risk hedging needs.
Under the circumstance that it is becoming more and more difficult to analyze and judge price fluctuations, enterprises use options to lock in unfavorable risks according to their own actual conditions, and at the same time reduce exposure Staying in a favorable direction will greatly improve the efficiency of enterprise risk management
.
Zhejiang Tomorrow Holding Group also entered the market at the first time
.
According to Shao Shiping, assistant general manager of the company, on July 6, Zhejiang Tomorrow participated in PP's 2009-P-7600 contract
.
On the same day, PP maintained a range-bound market, but the market structure is a discount structure.
If only using futures hedging may not achieve the expected effect, so they choose to sell call options to enhance the position income of spot inventory
.
"With the enrichment of domestic futures varieties, especially the listing of chemical futures and options, covering the entire chemical industry chain, the integration of industry and finance is an important trend in industrial development
.
" Shao Shiping said
.
