PP futures, the hottest new favorite of chemical i

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PP futures, the new favorite of chemical industry, has become a sharp tool for enterprises to avoid risks. One year after its listing, polypropylene (PP) futures entered a new stage of operation and development - the average daily futures trading volume in March and April reached 998900 hands. The futures prices are highly correlated, and the hedging function has played well. It has become one of the main varieties in the domestic futures market and a new channel for petrochemical enterprises to avoid risks

polypropylene (PP) was listed and traded on February 28, 2014. It is the third synthetic resin futures variety listed in the domestic futures market after linear low density polyethylene (LLDPE) and polyvinyl chloride (PVC), and the fifth domestic chemical variety. According to statistics, as of April 30, 2015, since the listing of PP futures, a total of 120million transactions (bilateral, the same below), equivalent to about 288.68 million tons of PP spot, with a total turnover of 5.1 trillion yuan. Among them, in March, PP transactions that just reached the age of "one year" were rapidly active, with an average daily turnover of more than one million, making PP officially enter the main variety sector of the bilateral million hand level in the domestic futures market, and continue to maintain the daily average of nearly one million hands in April. In this process, the trading volume of corporate clients has increased continuously. Since the listing, the average daily turnover has been 111000, accounting for 28.1%; On the other hand, due to the development and manufacturing costs and processes, the average daily position of corporate customers is 113000, accounting for 38.1%

in terms of price, due to the impact of the prices of raw materials such as upstream crude oil and propylene, the price of PP has fluctuated greatly in recent years, reaching more than 40% in 2010 and about 20% in 2013. Industrial enterprises are subject to price fluctuations, and production and operation are facing greater risks. Market participants pointed out that since last year, the spot price of PP has experienced a sharp fall after the Spring Festival. It fluctuated upward from mid February to early August, and then the focus moved downward. The annual price showed a downward trend, falling by 12% to the last 20%. PP futures prices always reflect the trend of spot prices and maintain close linkage. According to statistics, the correlation coefficient of PP current price in 2014 reached 0.96, and the monthly hedging efficiency and quarterly hedging efficiency of different demand for special metal materials in different sub sectors in the future reached 51.25% and 84.99% respectively

a modified plastic listed enterprise in South China produced and purchased 300000 tons of polypropylene in 2014, with a total trade volume of about 400000 tons. The relevant person in charge of the enterprise told that since the listing of PP futures, the enterprise has hedged through the PE and PP futures markets of the big commercial exchange to avoid the risk of fluctuations in the price of raw materials. At the same time, the tracking and analysis of the futures market provides an important reference basis for enterprise operation

the person in charge introduced that PP futures provided an effective tool for enterprises to lock in purchase costs. When the price of PP fell significantly and the estimated product had a higher profit, they bought hedging on the futures market to lock in product costs and profits. In 2014, the international crude oil price fell sharply, and the PP price also fell. When the price of PP fell to 10000 yuan per ton, the gross profit of the product could reach 15%. The enterprise decided to buy PP batch by batch below the futures price of 10000 yuan/ton. During the operation, the enterprise bought about 10000 tons of pp1501 contract, the average price of position building was 9758 yuan/ton, and the average price of position closing near the delivery month was 9233 yuan/ton. Although futures lost more than 5 million yuan, due to the establishment of virtual inventory in the futures market, enterprises delayed procurement, and after the sharp decline in spot prices, the procurement cost was reduced by more than 10 million yuan, with a total profit of more than 5.8 million yuan in the final period

market researchers told China Securities Journal: please briefly review 1 the past few years3? 15. The main situation of quality inspection activities: in only one year, PP futures has completed the market maturity that many varieties can achieve in three or even five years

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