From January to October, the profit of iron and steel industry dropped by 44.2%

On November 27, according to the data released by the National Bureau of statistics, from January to October, the total profits of Industrial Enterprises above Designated Size nationwide reached 5015.1 billion yuan, a year-on-year decrease of 2.9%, an increase of 0.8 percentage points compared with that from January to September, among which the ferrous metal smelting and rolling processing industry decreased by 44.2%. If you are not sensitive to statistical data, go to see the stock price of Baosteel, the leading iron and steel company in China, which has been falling from mid April to mid November, down more than 30%. The iron and steel industry is facing difficulties this year, but the good news is that the iron ore option contract has been approved. The official listing time is set on December 9, 2019, and the place is Dalian Commodity Exchange. In the first 10 months, the iron and steel industry was in a difficult situation. The reporter noted that in 41 industries, the total profit of ferrous metal smelting and calendering industry dropped by more than 40%. From January to October, the operating revenue was 5905.16 billion yuan (a year-on-year increase of 7.1%), the operating cost was 5446.24 billion yuan (a year-on-year increase of 11.2%), and the total profit was 211.91 billion yuan (a year-on-year decrease of 44.2%). From a single month perspective, the monthly profit in October was 14.7 billion yuan, down 4.7% month on month and 65% year-on-year.

Prior to that, the monthly profit in September was 15.42 billion yuan, compared with 42.12 billion yuan in October last year. Analysts said that from January to mid July this year, driven by the dam break of vale, the price of iron ore had a wave of significant increase, and the futures price had been more than 900 CNY/ton. However, the rising cost of raw materials has not been transmitted to the product end. The price of steel products has not been rising from January to July. The rising price of raw materials has seriously squeezed the profit space of steel enterprises. From the beginning of July to the end of October this year, the prices of screw steel, hot-rolled coil, wire rod and stainless steel dropped unilaterally. Fortunately, after July, the price of iron ore fell rapidly, the price of alloy also fell sharply, and the gross profit rate per ton of steel was repaired. Compared with June this year, the industry pressure eased slightly. According to the industry sector of CSRC, there are 35 listed companies of "ferrous metal smelting and calendering processing industry", 23 with a year-on-year negative growth in operating profit and 12 with a year-on-year growth in profit, accounting for 65.71% of the decline in performance and 34.29% of the growth in performance. Diao Li, deputy director of financial assets Department of China Iron and Steel Industry Association, pointed out that since this year, the operation of China's iron and steel industry has been generally stable, crude steel production has maintained growth, import and export have declined, steel prices have fluctuated in a narrow range, fixed asset investment has increased substantially, energy conservation and emission reduction indicators have continued to improve, but at the same time, production capacity has been released rapidly, enterprise benefits have declined significantly and environmental protection pressure has increased And other difficulties. Looking forward to 2020, the external environment will become more complex and severe, the overall effective demand for iron and steel will be weak, the transformation and upgrading of the iron and steel industry will face many obstacles, the price of iron ore, scrap steel and coal coke, the cost of environmental protection operation and logistics will still be at a high level, and it is difficult to improve the economic benefits of the iron and steel industry. In the face of difficulties, the list of market makers issued by the big business has been supported by "cross-border experts" from the iron and steel industry and the futures industry.

China Securities Regulatory Commission has approved to carry out iron ore option trading in Dalian Commodity Exchange (hereinafter referred to as "Dashang"), and the official listing time of iron ore option contract is December 9, 2019. According to the disclosure of Dashang, since the listing of iron ore futures in October 2013, the overall operation of the market has been stable and orderly, and the market structure has been continuously improved. More than 1200 steel and mineral enterprises have been deeply involved in futures trading, and 8 of the top 10 steel mills in China have participated in iron ore futures. In the first 10 months of this year, corporate customers accounted for 45% of the positions, up nearly 5 percentage points year on year. In May 2018, iron ore futures introduced overseas traders, attracting more than 170 overseas customers from 15 countries and regions, and the international influence continued to improve. Wang Yongqiang, researcher of AVIC International Mineral Resources Co., Ltd., said that options provide more means for enterprises to hedge, enrich derivatives tools for enterprises to hedge, and can achieve some hedging purposes that futures cannot achieve. The listing conditions of options are relatively mature, and iron ore futures have been listed for more than six years, which provides a good help for industrial customers to hedge risks. The market has a relatively high acceptance of futures, and the introduction of options is conducive to enriching enterprise risk hedging means. On November 22, Dashang released a message saying: "as the first industrial product option of Dashang, the listing of iron ore option will further enrich China's derivatives system, which is of great significance to promote the derivatives market to further serve the steel industry and promote the construction of international iron ore pricing center." After the listing of iron ore options, it will form a joint force with iron ore futures, provide personalized risk management tools for iron and steel industry chain enterprises, promote the innovation of trading modes such as trading with rights, and help enterprises more accurately hedge the risk of price fluctuation. In order to improve liquidity and facilitate transaction, the market maker system was introduced into the iron ore option trading of big business.