Yesterday, short fiber futures were listed, and the domestic polyester futures sector welcomed “new members”. At the listing ceremony and the subsequent short fiber industry seminar, reporters deeply felt the enthusiasm of industrial enterprises for short fiber futures and were full of expectations for its development prospects.
Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission, said at the listing event that day that on October 12, 2020 Today is the 30th anniversary of the establishment of the Zhengzhou Commercial Exchange and the China Futures Market. It is a happy day for the futures industry and also a happy day for the Zhengzhou Commercial Exchange. Faced with the impact of this year’s COVID-19 epidemic, we all forge ahead and overcome difficulties together. The futures market has made steady progress, which has effectively supported the recovery and development of the real economy. The function of risk management in the futures market has once again been tested under extreme market conditions. . This year, the domestic futures market has successfully launched 10 futures and options varieties, including liquefied petroleum gas, low-sulfur fuel oil futures and thermal coal options. The construction of the domestic energy futures market system represented by oil, coal and gas has made significant progress. In the first nine months of this year, the cumulative trading volume of the futures market was 4.265 billion lots and the cumulative trading volume was 302.80 trillion yuan, a year-on-year increase of 47.17% and 41.29% respectively. With the significant increase in transactions, open interest has also increased significantly.
On the first day of listing of short fiber futures, the overall market operation was stable and trading was active. Less than half an hour after the opening, all short fiber futures contracts were closed at the daily limit, with a total trading volume of 53,751 lots throughout the day and open interest exceeding 20,000 lots. Among them, the main 2105 contract traded 51,327 hands and held 19,362 positions, which was significantly higher than the turnover rate of PTA and MEG.
“The increase in the opening price reflects that investors are more optimistic about the later trend of short fiber, which fully reflects the recent changes in the industrial chain. With good news, bullish sentiment has been fully released, and the futures price discovery function has been reflected.” Pang Chunyan, analyst at SDIC Essence Futures, said that many short fiber manufacturers and traders participated in the event on the first day of listing, indicating that the hedging needs of enterprises are relatively high. urgent.
The reporter learned that on the first day of listing, including Xiamen International Trade Group Co., Ltd. (hereinafter referred to as Xiamen International Trade), China Base Ningbo Co., Ltd. (hereinafter referred to as China Base Ningbo), Ningbo Upstream and downstream enterprises in the industrial chain, including Hengyi Industrial, actively participated. The first participants in short fiber futures industry client transactions were China Base Ningbo and Xiamen Qirun Industrial Co., Ltd.
“As a circulation enterprise, we operate many varieties and large scales. If we do not have good derivatives tools, we will face great risk pressure. Business operations need to use futures tools. Hedging and protection are also the starting point for us to actively participate in short fiber futures.” said Cai Yingbin, general manager of Xiamen International Trade Supply Chain Division.
Dong Li, general manager of China Base Ningbo Polyester Division, said that risk management has also brought great support to the development of enterprises. “This year the company is focusing on the expansion of the downstream polyester finished product trading market. Short fiber futures will provide a good hedging tool for the company’s industrial chain expansion, so we will actively participate as soon as it is listed.”
In Dong Li’s view, the daily limit on the first day of trading is an emotional feedback to the current downstream peak season. The reporter learned that during the National Day holiday, the staple fiber market sales improved, inventories dropped, and all data showed consistent positive results. Last Friday, the short fiber futures listing price was determined to be 5,400 yuan/ton. The spot market price continued to rise over the weekend, and the market was generally optimistic about the recent market price of short fiber.
At present, the companies participating in short fiber futures are mainly traders and large PTA and polyester integrated enterprises. They are familiar with the futures market and have flexible investment operations. Trading opportunities can be quickly captured on the first day.
“For companies that need to replenish their inventory in the future, buying futures is cheaper than buying spot directly. Overall, if there is a certain price advantage, if When downstream orders improve, it is an opportunity for companies with inventory replenishment needs to buy and maintain value.” Pang Chunyan said that the main purpose of downstream companies participating in transactions is to hedge and reduce raw material procurement costs. When orders improve, they should increase raw material stocking in a timely manner.
The sharp rise in futures prices has also given short fiber manufacturers a good opportunity to raise prices and lock in product profits in advance through the futures market. On the premise that production profits have significantly improved, short fiber manufacturers can sell appropriately to preserve value and avoid the risk of a possible decline in the forward market. “Especially at present, the price of raw materials is weak. Short fiber is the first to hit the daily limit, and the processing cost of the market has been greatly improved. This is a good opportunity for enterprises to lock in production profits.” Pang Chunyan said.
The prospects of short fiber futures after their listing have also been unanimously optimistic by enterprises in the industry chain. Zhu Shaowei, general manager of operations of Fujian New Jingwei New Fiber Technology Industrial Co., Ltd., has many years of market experience. He said, “When the supply and demand side is relatively good, customers tend to buy in large quantities when prices are low, and stop and wait and see when prices are high. The performance of short fiber companies throughout the year has been mediocre, and it is difficult to do well.” In his view, now that there are futures, it provides a new sales channel for short fiber companies and also gives a new pricing reference.
“Especially short fiber futures were listed when downstream demand recovered relatively well, and the price after the opening gave a good signal.”Zhu Shaowei said that making full use of the futures platform can improve corporate efficiency. He hopes that the experience of participating in PTA futures can be copied to the short fiber field, so that short fiber companies can also benefit simultaneously.
The relevant person in charge of Hengyi Petrochemical Co., Ltd. said that in addition to polyester products, the company also has PTA. PTA futures have previously played a huge role in corporate operations. According to the person in charge, physical manufacturing companies usually have two worries. One is that the price will not be high, and the other is that the goods will not be sold. The two major functions of futures price discovery and hedging actually perfectly solve the pain points of enterprises.
“The trading activity of short fiber futures on the first day far exceeded market expectations, the market liquidity is good, and the types of participating customers are diverse.” General Manager of the Olefins Division of Yuanda Energy and Chemical Co., Ltd. Manager Dai Yumin said that the listing of short fiber futures has opened up channels between raw materials and products in the polyester industry chain, realizing product interaction between PTA, MEG and PF, giving industrial customers more opportunities to use futures tools. In the later period, as market participants become more extensive, the participation of upstream and downstream industry chains will become more in-depth and professional.
The relevant person in charge of Zhengzhou Commodity Exchange said at the short fiber industry seminar that the listing of short fiber futures is of great significance to building the futures sector of the entire polyester industry chain. After PTA futures was listed on the market, after 14 years of careful cultivation, it has a solid foundation, which can be said to be “deep in roots and luxuriant in leaves”.
“On this good basis, the exchange has built the entire polyester futures variety sector from one point to a line and then to a surface through this idea layout, based on the enterprise To meet the needs of the industry, we will continue to improve the varieties of the polyester segment to better serve the entire industrial chain.” In the opinion of the above-mentioned person in charge, my country ranks first in the world in chemical fiber production and consumption, and has the ability and confidence to build a global pricing center.
“As a major textile country in China, short fiber is one of the main raw materials for our textiles and clothing. We look forward to the mutual promotion of domestic and international dual cycles through the leadership of short fiber futures , pushing the industry to a new level of development.” Cai Yingbin said.
It is understood that polyester staple fiber, the subject matter of short fiber futures, is one of the three major raw materials for the cotton textile industry along with cotton and viscose staple fiber, and is the key to ensuring the development of my country’s textile industry. One of the main raw materials. Staple fiber products have both chemical and textile concepts. Their prices are affected by multiple factors such as raw material costs, supply and demand structure, economic cycles, and international markets, and fluctuate frequently. According to statistics, from 2014 to 2019, the average annual fluctuation of short fiber prices reached 33%. Short fiber production, trading and consumer companies have urgent hedging needs, and have repeatedly called for the launch of short fiber futures as soon as possible to provide companies with tools to avoid risks.
He Yanli, vice president of the China Chemical Fiber Industry Association, said that the short fiber futures market can form open, transparent, continuous and authoritative futures prices, guide companies to flexibly adjust future production plans, and also It can provide important reference for national ministries, commissions, industry associations, etc. to formulate industry policies. Enterprises in the upstream and downstream of the industrial chain can manage operating risks through hedging, and can also lock in procurement costs or sales profits in advance to ensure stable business operations. Short fiber futures provide an effective risk management tool for the polyester industry. It is hoped that relevant companies can learn futures knowledge in depth, carefully study the operating rules of the futures market, use futures tools to manage price risks, and promote the stable and healthy development of enterprises.
“Over the past thirty years, Zhengzhou Commercial Office has always kept in mind the fundamental purpose of serving the real economy, never stopped innovating and developing, and insisted on forging ahead with the times and the country. Xiong Jun, chairman of Zhengzhou Commercial Exchange, said that Zhengzhou Commercial Exchange started from agricultural products and gradually developed into a comprehensive futures product covering grain, cotton, oil, sugar, fruit and energy, chemical industry, textile, metallurgy, building materials and other important fields of the national economy. and derivatives exchanges. After the listing of short fiber futures, it will work with the cotton, PTA futures options and cotton yarn futures already listed on the Zhengzhou Commercial Exchange to better exert the “agglomeration effect” of the sector, form a more complete polyester and textile industry risk management tool system, and assist related industries. High-quality development will further enhance international competitiveness and enhance pricing power. ZCE will, in accordance with the requirements of the China Securities Regulatory Commission, work with relevant parties to cultivate and promote the short fiber futures market, maintain the smooth operation of the market, and help accelerate the recovery and development of the real economy.
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