Urea futures are listed and traded on the Zhengzhou Commodity Exchange

On August 9, 2019, urea futures were listed and traded on the Zhengzhou Commodity Exchange.
The first batch of urea futures contracts listed and traded are UR2001, UR2002, UR2003, UR2004, UR2005, UR2006, UR2007, and the benchmark price of each contract is 1,850 yuan/ton.
? 22 companies including Zhongyuan Dahua, Xinlianxin, Hebei Zhengyuan, Hualu Hengsheng, Haoyuan Chemical, Jinmei Zhongneng, and Sinofert are designated urea delivery warehouses (factories).
Ten companies including Stanley Fertilizer Ningling Co.
, Ltd.
and Henan State Reserve Logistics Co.
, Ltd.
are designated urea delivery warehouses.
The delivery of urea futures implements inspection-free brands.
According to the relevant regulations of Zhengzhou Commodity Exchange Futures Delivery Brands and Inspection-free Brands Management Measures, 6 brands of Friendship, Xinlianxin, Sinochem, Zezhou, Lanhua, and Erdos are approved Become an inspection-free delivery brand.
Zhao Zhengping, vice chairman of the China Securities Regulatory Commission, stated at the listing ceremony that the listing of urea futures is a concrete measure for the capital market to serve the real economy and rural revitalization strategies.
The listing of urea futures will further improve the agricultural-related futures variety system, provide open, transparent and efficient risk management tools for farmers, agricultural enterprises, and agricultural cooperative organizations to lock in planting costs, expand the "insurance + futures" pilot space, and enhance agricultural production.
Enthusiasm and initiative are of great significance to optimizing the agricultural support and protection system, serving the rural revitalization strategy, and maintaining national food security.
In addition, with the dual attributes of agricultural products and chemical products, urea futures are a "cross-border variety".
Its listing will help provide risk management tools for enterprises across the chain, and help enhance the depth and breadth of the futures market serving the real economy.
.
• Li Shousheng, president of the China Petroleum and Chemical Industry Federation, said that the listing of urea futures is a grand event in the petroleum and chemical industry, and it is also a strategically significant step for the integration of traditional agrochemical industry and modern financial service industry.
Urea products are affected by the relationship between supply and demand, and combine cyclical, seasonal, and regional supply-demand contradictions.
They are produced in industry and serve agriculture.
Its raw material coal and natural gas are also closely related to energy.
The market price is affected by the cost of raw materials and the structure of supply and demand.
Changes, economic operating cycles, changes in the international market and other factors have caused frequent fluctuations.
According to statistics, since 2009, the annual average volatility of urea prices has been above 20%.
Facing the increasing risk of market uncertainty, manufacturers, trade circulators, reserve units and downstream consumer groups have an urgent need for hedging tools.
They hope to launch urea futures as soon as possible to provide price prediction and avoid operational risks for their production and operation.
Means and tools.
"The launch of urea futures can form an open, transparent, continuous, and authoritative futures price, guide companies to flexibly adjust future production plans, and can also provide an important reference for national decision-making departments and industry associations to formulate industry policies and guide business operations.
Industry.
Upstream and downstream companies in the chain can lock in procurement costs or sales profits in advance through operations such as hedging, stabilize corporate profitability, and achieve stable and healthy development of their own production and operations.
" Li Shousheng said.
Wu Guoding, Vice Governor of Henan Province, stated that the listing of urea futures will play an important role in deepening the supply-side structural reform of the urea industry, further standardizing the market operation order, reducing enterprise production and operation risks, and promoting the transformation and development of agriculture.
In the next step, the Henan Provincial Government will take this as an opportunity to pay more attention to the role of the futures market in serving "agriculture, rural areas and farmers" and the high-quality development of the province’s economy, and coordinate with ZCE to continue to make good use of existing varieties such as wheat, cotton, and red dates.
The function of ZCE supports ZCE to strengthen the R&D and listing of new products.
According to reports, in January 2009, after the country implemented the reform of the fertilizer price formation mechanism, ZCE started the research and development of urea futures.
ZCE conducts in-depth research on the front line of the market, grasps the actual needs of industrial enterprises, overcomes difficulties in the selection of delivery bases and the validity period of warehouse receipts, innovatively carries out urea storage experiments, and promotes the development of urea futures.
? Chen Huaping, chairman of the Zhengzhou Commercial Exchange, said that the listing of new futures products is just the first step to serve the real economy.
ZCE will keep close to the reality of the urea market, continuously improve the contract rules and systems, do a solid job of market promotion and cultivation, effectively strengthen front-line supervision and risk prevention and control, and do its utmost to promote the full functioning of urea futures.
? Li Yanjie, head of the Energy and Chemical Division of China Securities Futures, analyzed: From the perspective of seasonality, the price of urea was weak in August and may be suppressed to a certain extent in the initial stage of listing.
However, the relatively discounted listing price also takes this into account.
Factors, the probability of a continuous sharp decline is small; on the contrary, for the recent January contract, with the subsequent seasonal increase in the demand for agricultural fertilizers and the expectation of limited production in winter, the price is expected to rise in the later period.
Especially for urea consumer companies that have a buying need, they can consider buying to maintain value according to the spot purchase plan.
? According to the relevant provisions of the "Zhengzhou Commodity Exchange Futures Trading Risk Control Measures", the price limit on the day of urea futures listing is ±8% of the contract listed benchmark price, and the trading margin is 5%.
The standard for urea futures trading fee is 5 yuan / Lot, the transaction fee for closing the Imakura transaction within the day is 5 yuan / lot.
Urea futures delivery fee, warehouse receipt transfer fee, and futures conversion fee are charged at 0.
5 yuan/ton.