The hottest steel enterprises actively use futures

Steel enterprises actively use futures tools to avoid risks and explore new ways to combine industry and finance, reduce costs and increase efficiency

this year is the most stable year for the steel industry in the past 10 years. Steel prices remain high, and the blast furnace operating rate of steel plants is high. Although the profit is at a high level, a large number of steel enterprises are not satisfied with "relying on heaven"

recently, the Dalian commodity exchange led a team to investigate a number of steel enterprises and found that the steel industry has gradually realized the importance of futures instruments for hedging market risks at both ends of supply and marketing. Many iron and steel enterprises actively and flexibly use futures tools to avoid risks, and explore a new path of combining industry and finance, reducing costs and increasing efficiency. Among them, basis trade, OTC options and other Derivatives Innovation businesses have also been gradually promoted in the steel industry

"the price fluctuation of coking coal, coke and iron ore brings about the increase of enterprise costs and the risk of impairment of inventory and goods in transit. Recently, it is mainly the purchased coke and imported coking coal with a large amplitude." Chen Tao, head of the futures Department of Angang Steel's marketing center, said that in the face of fluctuations in raw material prices, enterprises have also made corresponding preparations. It is expected that the environmental protection and production restriction policy will increase in the second half of the year, which will have a direct impact on coke supply. Therefore, Angang Steel will replenish coke inventory in advance according to market conditions. At present, the inventory is relatively sufficient. For the rise in the price of Imported Coking Coal and domestic coke in the first half of the year, it did not have a great impact on the production cost through the early peak avoiding and valley selecting machine procurement, as well as hedging to avoid risks

Zhai Shihai, director of the data analysis Office of the futures trade department of Benxi Iron and steel sales center, said that under the market situation of sharp rise in coke prices, Benxi Iron and steel can purchase coking coal at a more reasonable price and produce enough coke for use through its own coking plant. On the contrary, when the coke price is more reasonable, Benxi Steel also actively purchases directly in the market, and the raw material procurement method is more flexible

"in the first half of this year, the downstream market demand for steel continued to pick up. The inertia demand for infrastructure and real estate was large, the demand for oil and gas pipelines, the rebound in shipbuilding orders and the increase in orders for wind power new energy, and the downstream demand for steel was diversified, which supported the industry price and profit level." Cai Yongzheng, director of the Securities Investment Department of Nanjing Iron and Steel Co., Ltd., said that thanks to the continuous growth of the demand for steel in the aforementioned industries, the plate orders of Nanjing Iron and Steel Co., Ltd. showed a rapid growth trend in the first half of the year. However, these orders are characterized by long lead times and complex product types. However, with the improvement of the company's understanding of Futures Hedging on the spot business platform in recent years, the future cash hedging order management mode has been gradually accepted by the company, and the order hedging volume has increased significantly. In particular, the price lock long single hedging model has gradually matured and improved, which has improved the efficiency and confidence of business departments in receiving orders, effectively expanded the business scale, and effectively avoided the risk of price failure and absolute non ex factory price fluctuation through the combination of futures and cash

according to the survey, the large steel enterprises represented by Angang Steel not only use the futures market for traditional hedging operations, but also apply futures instruments and futures prices to daily production and trade

according to Chen Tao, in the basis trade pilot project of the big business institute in 2017, Angang Steel and China National Building Materials Group Co., Ltd. successfully carried out the basis trade business. The basis trade variety is iron ore, and the trade volume is 50000 tons. Angang Steel shares can win the trust and sincerity of customers. It is the buyer of real goods, and China national building materials is the seller of real goods. The two sides agreed that the traded goods are Newman powder, and the delivery place is Bayuquan port, Taking 60 yuan/ton as the basis and 1805 iron ore contract as the subject contract, the pricing period is from December 29 to January 29. Then the graphene/polyaniline fiber film composite was obtained through vacuum filtration. On January 22, 2018, China building materials completed the point price, linked to the contract closing price of 540.5 yuan/ton, and the final Newman spot sales price was 600.5 yuan/ton. Angang iron and Steel closed its position with 540 yuan/ton, and completed the hedging of 500 pieces of the 1805 contract of liantie

as a coaching member of Angang Steel and China building materials basis trade business, the relevant person in charge of Guoxin futures said that in this business, based on the business cooperation intention of both parties, Angang Steel, as a trade buyer, transferred the point price right and obtained the basis setting right, which fully reflects the flexibility of basis trade

in addition to basis trade, Angang Steel has also explored and tried the OTC option business in recent years