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    Home > Chemicals Industry > China Chemical > Resolving market risks with the help of "futures power" - a documentary of Zhongyuan Futures Co., Ltd.'s deep cultivation of the chemical industry chain

    Resolving market risks with the help of "futures power" - a documentary of Zhongyuan Futures Co., Ltd.'s deep cultivation of the chemical industry chain

    • Last Update: 2022-02-19
    • Source: Internet
    • Author: User
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      "In 2021, international commodity prices will fluctuate wildly, and more and more chemical companies choose to use financial instruments such as futures options to manage corporate risks and guide production and operation
    .
    We closely focus on futures varieties such as urea, soda ash, methanol, and PVC, and use futures The
    platform helps companies resolve market risks

    .
    " Xie Xuezhu, chairman of Zhongyuan Futures Co.
    , Ltd.
    , hopes that more chemical companies can leverage the "power of futures" to achieve stable operations

    .

      The innovative service system is close to the chemical industry

     The innovative service system is close to the chemical industry The innovative service system is close to the chemical industry

      "With the development of the situation, how the futures market can extend and cover agriculture, energy, chemical industry and other fields, and provide enterprises with rich financial management tools, has always been the direction of our continuous exploration and efforts
    .
    " Xie Xuezhu said

    .

      It is understood that there are currently more than 1,300 chemical enterprises above designated size in Henan Province, with a scale output value of 400 billion yuan, ranking fifth in the country in terms of comprehensive strength
    .
    However, there are still problems such as small scale, low equipment level, and low cost advantages, which urgently need transformation and upgrading and high-quality development

    .
    "Using futures and derivatives to help Henan chemical companies manage market risks and promote industrial upgrading is a new attempt

    ," said Xie Xuezhu
    .

      In May 2019, Zhongyuan Futures signed a comprehensive strategic cooperation agreement with Henan Petroleum and Chemical Industry Association, which opened the prelude for the futures market to enter Henan's chemical industry
    .
    On August 9 and December 6, 2019, urea futures and soda ash futures were listed and traded on the Zhengzhou Commodity Exchange

    .
    "This is the beginning of Zhongyuan Futures serving Henan's chemical industry, and it has broadened the door for Zhongyuan Futures to serve Henan chemical enterprises

    .
    " Xie Xuezhu said

    .

      Resolving difficulties with the help of futures tool companies

     Relief and solve problems with the help of futures tool companies Relief and solve problems with the help of futures tool companies

      "We give full play to our respective advantages, actively promote the application of enterprises and futures tools under the knowledge of futures, help Henan chemical enterprises to enrich their management concepts and management methods, and effectively improve their risk management and control capabilities
    .
    " Xie Xuezhu said

    .

      In actual work, Zhongyuan Futures organizes a professional working group to hold nearly 100 special training sessions on futures fundamentals, futures hedging operation theory, and futures risk management for chemical enterprises in Henan Province every year.
    Market risk lays the groundwork

    .
    At the same time, it has launched comprehensive risk management consulting services such as enterprise risk identification, risk investigation, risk measurement and evaluation, and risk solution design to enterprises, and has successively tailored risk hedging management and futures packages for Jinshan Chemical, Jinmei Tianqing and other enterprises.
    The long-term value preservation business system has achieved the expected results

    .

      Play a demonstration role, chemical enterprises "break the cocoon into a butterfly"

     Play a demonstration role for chemical enterprises to "break the cocoon into a butterfly"

      "In practical work, we focus on the role of demonstration and leadership, helping enterprises to use futures for risk management and improving the level of market-oriented management
    .
    " Xie Xuezhu said

    .

      A urea enterprise in Henan is actively exploring a new mode of combining futures delivery factories and warehouses to open up new sales channels
    .
    In March 2020, after the use of fertilizers in rural areas, the urea price was at risk of falling.
    The company decided to sell the urea futures 05 contract to hedge its value.
    This was also the first time the company used the factory warehouse to participate in the futures attempt

    .
    Since then, the company has actively participated in the delivery, and the delivery volume of warehouse receipts has risen steadily.
    The delivery volume of the 2101 contract was 40,000 tons, reaching the maximum amount approved by ZCE

    .
    At present, the company has set up a professional internal team to be responsible for delivery, and has formed a standardized process in each link of warehouse receipt registration, quality inspection, stocking, and organizing and shipping

    .

      There is also a soda ash enterprise in Henan successfully avoiding price risk by using futures to buy hedging
    .
    In August 2020, the supply side of soda ash suffered one after another.
    After the spot market rose twice in August, the price reached about 1,800 yuan/ton, and the September futures contract was about 1,500 yuan/ton

    .
    In the case that the futures are significantly discounted to the spot, the company decisively carries out the futures purchase hedging

    .
    The final settlement price of the September futures contract was 1,739 yuan/ton

    .
    Through this operation, the loss of rising procurement costs has been effectively avoided

    .

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