Since 2007, DCE has listed linear low-density polyethylene (LLDPE), polyvinyl chloride (PVC) and polypropylene (PP), providing a “safe haven” and price for the development of China's plastics market. The "compass". From the initial knowledge of futures tools to skilled hedging operations, from reference to futures quotes to basis trade and off-exchange option innovation models, the combination of the current period has become a major development trend in the plastics futures market in the past ten years.
When the financial crisis broke out in 2008, the price of plastic products represented by PP plummeted, and some traders began to realize the importance of using derivatives to hedge price risks.
After 2010, a large number of coal chemical enterprises were put into production, and the structure of the plastics industry was deeply adjusted. At this time, futures hedging and pricing were the mainstream.
Since 2016, due to the impact of industry de-capacity, capacity growth slowdown and the rebound of downstream demand, commodity prices and future expectations have continued to rise, and plastic product prices have begun to fluctuate.
After experiencing a big ups and downs in prices, companies have become more determined to use the derivatives market to manage prices. In the first ten years of 2018, the above-mentioned three plastic futures corporate customers accounted for 55%, 50% and 55%, respectively, both of which achieved year-on-year growth, and the participation of industrial customers continued to increase.
Futures have not only changed the way in which plastics companies hedge, but the industry pricing model has also undergone earth-shaking changes. With the influx of futures products and the influx of futures, the spot sales pricing model is no longer limited to the traditional models of listed companies such as listed sales, auctions, and monthly settlements. The basis trade based on futures is accepted by the market. It is understood that at present, the proportion of plastics enterprises using basis trade in spot trade exceeds 70%, and financial pricing has gradually become a trend, pushing the business model to “renew and replace”.
In the long run, the concentration of plastics industry will gradually increase, and the vertical depth and extension of enterprise scale will be higher and higher, which puts higher requirements on enterprises. The above-mentioned person said that with the continuous development of the function of the futures market and the continuous improvement of the system rules, plastic futures can deeply serve the customers of the industry and have the function of leading the development of the industry, which is promising under the trend of integration of industry and finance.
Jiangsu Hongmei Masterbatch Co., Ltd. is an early enterprise engaged in R&D, production, sales and service of plastic masterbatch. It has more than 40 professional production lines with an annual production capacity of over 30,000 tons and annual sales of 300 million yuan. . Since 2014, Hongmei has introduced 6 sets of continuous mixing production lines from the United States and Germany. All kinds of supporting equipments are provided by international professional manufacturers.
