Merchants have launched a variety of tools to hedge risks for coal enterprises

With the further marketization of China's economy, the demand for risk management of enterprises is increasing day by day, and the financial derivatives market provides enterprises with various means and tools for risk management. In recent years, the operation of coal char futures has become more and more mature and its functions have become more and more fully developed, which helps the upstream and downstream enterprises of the industrial chain to avoid risks and serve the structural reform of the supply side. In the future, its system will also be continuously optimized, and the system of hedging products and tools will be further enriched. On August 22, Zhang Hong, Secretary of Discipline Committee of China Coal Industry Association, said at the China Coal and Coke Industry Congress in 2019: "It took eight years for coke and coking coal to be listed in China, and six years for power coal to be listed. In the development process of coke and coal futures from scratch, new concepts such as combination of futures and cash, combination of production and finance, hedging, new business models and new business formats are gradually presented to us. Under the joint promotion and guidance of these new concepts, new models, new business formats, new concepts and supply-side structural reforms, It plays a more and more obvious role in the process of transformation and upgrading of traditional industries such as coal, coke and steel.

Looking back on the past, Li Hua, deputy director of Industrial Development Department of Dalian Commodity Exchange, introduced to the reporter of International Finance Daily: "In order to meet the risk-aversion needs of coal-coke enterprises, Dalian Commercial Exchange launched coke futures in 2011, followed by coke futures and iron ore futures in 2013, which provided corresponding information for upstream and downstream industrial enterprises. Risk management tools."

"After years of development, the big business has become the largest coal futures market in the world. As far as coke futures are concerned, its market is constantly developing and maturing. From January to July 2019, the average daily trading volume and the average daily holding volume of coke futures in Dalian Stock Exchange reached 242,100 and 184,000 hands respectively, up 11.24% and 19.77% respectively from the same period last year. Li Hua said. From the perspective of coke futures market structure.

In the first half of 2019, the percentage of customers holding positions of coking coal and coke legal persons was 40% and 33%, respectively, which increased by 1.3% and 3.9% compared with the same period last year, and the market structure was further optimized. In terms of delivery, the main delivery areas of coke coal and coke futures are gradually shifting with the change of the direction of spot trade. Specifically, as of the 1907 contract, coking coal futures delivered 40800 hands, equivalent to 24.448 million tons of spot, with a total delivery value of 2.228 billion yuan. Since 2017, the delivery volume of Tianjin Port has shrunk to 6%. The delivery area gradually inclines to Tangshan area, including Jingtang Port and Caofeidian Port. At the same time, coke futures delivered 25,730 hands, equivalent to 25.773 million tons of spot, with a total delivery value of 3.942 billion yuan. Since 2017, coke delivery has gradually shifted from Tianjin Port to Rizhao Port and Qingdao Port. The proportion of coke delivery in Tianjin Port has decreased to 33%, while that in Rizhao Port and Qingdao Port has increased to 22% and 17%. Chen Wei, a senior expert of Dalian Commodity Exchange, also told the International Finance Daily: "Dalian Commodity Exchange listed coke and coke futures in 2011 and 2013. Coal coke varieties have been on the market for a long time, and the spot market has changed greatly, from the quality structure, supply and demand structure to the flow of trade. In recent years, the correlation of spot prices of coke, coke and iron ore has been steadily improved, and the base-difference pricing model based on the prices of large firms has been gradually applied in spot trade of iron and steel and coal. More and more enterprises manage the risk of price fluctuation by participating in the futures market, and the futures function is fully developed. Chen Wei continued to introduce himself to reporters. Innovation derivatives play an important role.

In addition, many innovative derivatives also bring benefits to enterprises.

OTC options can be regarded as a kind of "insurance-like" product, which can help enterprises to control risks while retaining the right to gain profits, with a high degree of personalization. For example, Jiangsu Weitian Chemical Company plans to sell 10,000 tons of coke on October 19, 2018, fearing that falling coke prices will have a negative impact on sales revenue, so it spent 1.218 million yuan to buy European put options with the J1901 contract as the target and the execution price of 2471 CNY/ton. Because the J1901 contract price is only 2270 CNY/ton when it expires, the enterprise obtains 2.01 million yuan of compensation, even after deducting the royalty, it also has a net income of 792,000 yuan, which provides price protection for the long-term sales of the enterprise. In addition, the basis trade is another new mode of futures market serving the real economy. The development of the basis trade has gone through three stages: the first stage is that the participating enterprises use the way of "futures price + basis difference" to price, but they do not participate in the futures market themselves, which can improve the transparency of pricing and reduce the confrontation between upstream and downstream enterprises; the second stage is that the enterprises use futures pricing while participating in the futures market. Reasonable price risk ensures profit level; the third stage is the change of the trade mode of the whole industry, which transmits the supply and demand situation of the industry layer by layer through the base difference, and realizes the rational distribution of profits among all links of the industrial chain. As the seller of the base difference can obtain stable profits in the base trade, the buyer of the base difference can get the right of flexible pricing, and the base trade is being recognized by various industries.

In reality, many enterprises have made profits by participating in base trade. On August 29, 2018, Hegang Group and Heming Group signed a coking coal procurement agreement. Hegang Group agreed to purchase coking coal from Heming Group with "coking coal 1901 contract price + 150 CNY/ton" and point weighted on the one side of Hegang Group. By November 14, 2018, the contract price of 1901 was 1330 CNY/ton and the spot price of coking coal was 1580 CNY/ton. The base difference was extended to 250 CNY/ton. At this time, Hegang chooses the spot price, the actual purchase price is 1480 yuan.