How do Yisheng, Tongkun and Jinlun High Fiber trade PTA futures?

The operation of the PTA and polyester industries is affecting the “nerve” of the entire chemical fiber industry. The listing of RMB crude oil futures in Shanghai on March 26 has opened up a new era for China's futures market, especially the high attention of the polyester industry chain.

On March 28th, the 17th China Hangzhou Chemical Fiber Forum (2018) was held in Hangzhou. During the forum held in the Zhengzhou Commodity Exchange PTA futures special, it was directed to a method PTA producers use futures, Polyester companies how to effectively use tools PTA futures steady business, PTA futures market, the current situation and the overall operation of the stock market and other PTA market this year Hot topics have been explored.

Zheng Shang Institute:

Pushing PTA futures service to the real economy to a new level

The relevant person in charge of Zhengshang Institute introduced at the meeting that in 2017, the market scale of PTA futures grew steadily, and the function of serving the real economy played well. Focusing on serving the real economy and actively responding to the needs of the entity, Zhengshang Institute will actively improve the PTA industry chain futures product series. At present, the PTA futures introduction of foreign traders related supporting rules and regulations has been basically completed.

According to data from Zhengshang, PTA futures totaled 140 million contracts in 2017 (unilateral, the same below), accounting for 4.56% of the total turnover of the national futures market. In the same period, the average daily position of PTA futures was 1.08 million, a year-on-year increase. 25.65%, among which, the participation of corporate clients has increased significantly, the daily average legal person accounted for 30% of the total, and the average daily corporate customer accounted for 63%. In terms of delivery, the total delivery volume of PTA futures in 2017 was 142,900 contracts, equivalent to 714,500 tons of physical objects, and the current price difference between maturity is only 0.56%.

“PTA futures are the varieties with higher delivery rates in China's futures market, ranking fourth among all varieties in the national futures market. The top three are gold and other varieties, ranking first among chemical futures varieties,” said the person in charge. .

According to reports, in 2017, Zhengshang Institute carried out the construction and maintenance of the PTA futures market, actively promoted the opening up work, formulated the PTA introduction of foreign traders, and steadily promoted the introduction of PTA futures into overseas traders. Currently, It has reached an agreement with Zhangjiagang Customs on the PTA futures bonded delivery, held the PTA futures introduction of foreign trader rules and demonstrations, and listened to market opinions and suggestions. At present, the relevant preparatory work has been basically ready.

On the other hand, the implementation of PTA, thermal coal futures contract continuous active program, comprehensive reduction of transaction delivery costs, the introduction of futures market makers and other measures, initially achieved the goal of continuous active contracts, the current thermal coal, PTA futures 803 contract has The completion of the delivery, the active of the relevant contract provides a more convenient hedging option for the entity, improving the efficiency of the hedging.

According to reports, at present, 32 PTA industrial enterprises have participated in the delivery of the March contract and achieved relatively good results. “The participation of entities is an important factor in the activeness of continuous contracts,” said the relevant person in charge of Zhengshang.

In 2018, Zhengshang Institute will actively carry out work in the following four aspects to promote the PTA futures service to a new level of real economy:

First, steadily promote the introduction of PTA futures into the work of overseas traders. At present, the relevant supporting rules system has been basically completed. The second is to further improve the continuous active program of futures contracts. Zhengshang Institute will continuously optimize and improve the implementation effect of continuous active programs, and promote them to other varieties when conditions are ripe. The third is to promote the listing of PTA futures options and the development of futures such as staple fiber and bottle flakes, improve the PTA industry chain futures variety series, and provide more abundant risk management tools for the entity; Fourth, close to the spot demand, and constantly improve the PTA rules system to ensure The PTA futures function is well played.

"Next, Zhengshang Institute will make PTA futures take a new step in serving the real economy. Where there are needs in the entity, it will be the direction that Zhengshang will continue to work hard. Our purpose is the same as everyone, that is hope. The PTA futures market can be close to the PTA spot market and better serve the real economy," said the person in charge.

PTA producer:

Yisheng Petrochemical's experience in using PTA futures

Yisheng Petrochemical is the world's largest PTA producer. It has three PTA production bases in Dalian, Liaoning, Ningbo and Hainan Yangpu. Its annual PTA production capacity is about 13.5 million tons, accounting for 28% of the country's total PTA production capacity.

Rongsheng Petrochemical is one of the investors of Yisheng Petrochemical. According to its latest financial report data, in 2017, Yisheng Dahua realized operating income of 38.7 billion yuan and net profit of 94.21 million yuan; Zhejiang Yisheng realized revenue of 40.37 billion yuan and net profit of 342.74 million yuan; Hainan Yishengnian achieved business. The income was 16.16 billion yuan and the net profit was 51.26 million yuan.

For the reason that the company's profitability increased significantly in 2017, Rongsheng Petrochemical said that the effective use of futures is one of the reasons.

Under the premise of satisfying the demand for production and sales of products, the company rationally utilizes financial instruments such as current hedges at home and abroad to enrich current business methods, actively expand the volume of self-operated trade to expand sales channels, and enhance the ability to optimize resource allocation. And the subsidiaries have provided strong support in the procurement of raw materials and product sales in the petrochemical industry chain.” Rongsheng Petrochemical stated in the annual report.

Wu Zhong, deputy manager of Yisheng Petrochemical Research Center, shared the application of futures in PTA production enterprises at the special meeting. Wu Zhong said that at this stage, the spot price of PTA and the futures price are very close, and the spot price of PTA goes with the futures price. The important value of the futures market is hedging. For business operations, the greater the price volatility, the greater the risk. Enterprises can use futures tools to hedge and reduce risks.

When talking about the feelings of using PTA futures, Wu Zhong said: "After the PTA futures market, our production enterprises have experienced a process of gradual adaptation. For a period of time, the production companies felt that the PTA futures price fell on the production enterprises, and carried out Some futures operations also paid some tuition fees. After these stages, Yisheng Petrochemical began to love PTA futures."

At present, Yisheng Petrochemical makes good use of the hedging function of PTA futures. According to Wu Zhong, hedging refers to the operation of futures contracts with the same amount of spot but opposite trading direction in the futures market, in order to compensate for losses in the other market at a certain time in the future. Avoid the risk of price fluctuations in the spot market. The principle is that the standardization contract and the related spot goods are substitutable; the second is that the futures price and the spot price change trend are basically the same; the third is that as the futures contract expiration date approaches, the spot price and the futures price tend to be consistent. The principle is that the direction is the opposite; the second is the same type; the third is equal; the fourth is the same time. "What to buy if you are afraid of anything." Wu Zhong said.

Yisheng Petrochemical also uses PTA futures to manage factory inventory. The first is to conduct inventory management of PTA products. When the product inventory is overstocked and the quantity is greater than the set target, the company will choose to sell the value on the futures disk to avoid the risk of product price drop. When the product inventory is digested too fast or oversold, the company will choose to buy and hold the value in the futures to avoid the risk of product price increase. The second is to carry out PX raw material inventory management. The enterprise maintains the value of the PX inventory, and the mode is consistent with the PTA.

In terms of delivery sales, when the futures price is higher than the spot price, you can choose to sell the hedged inventory by selling and delivering. In terms of point price sales, the stocks are sold and delivered on the futures. Although the benefits are maximized, the funds are occupied long and there is a risk of floating losses caused by price fluctuations.

Wu Zhong introduced that PTA manufacturers use more "variety arbitrage". Arbitrage between varieties is more suitable for product arbitrage between upstream and downstream, that is, arbitrage between PX and PTA. When buying raw materials, the products sold are positive arbitrage (positive set), and when there is profit, they are set. When selling raw materials, the purchased product is reverse arbitrage (reverse set), and the loss is reversed. "When the price difference between PX and PTA can reach 800 yuan, try to do it." Wu Zhong said.

PTA manufacturers can also use futures tools to use the credit warehouse receipt as a financing tool to pledge to obtain a low-cost futures deposit.

Wu Zhong also pointed out that the methods that PTA manufacturers can use include monthly arbitrage. Monthly arbitrage refers to the operation of buying and selling between different expiring contracts. Buying near-selling is far-forward arbitrage (positive set), selling near-buy is far-off arbitrage (reverse set). When the price of the distant month is higher than the price of the recent month and is sufficient to cover various costs, you can choose to buy near-month delivery, sell the distant monthly delivery, and earn low-risk profits. When the price in recent months is higher than the price of the distant month, if it has its own inventory, and there is a warehouse order in the futures market, it can be reversed and sold in the near month to buy the distant month for inventory replacement. In the past month, the company will deliver the goods in advance, recover the purchase price in advance, and later transfer or buy the delivery in advance, and take back the stock. However, companies do not use much in this regard.

"The futures market is also full of risks, but companies must learn to use it." Wu Zhong said.

Polyester enterprise:

Jinlun high fiber uses PTA futures to operate stably

PTA is the most important raw material for the production of polyester polyester fibers. So, how can polyester companies effectively use PTA futures? Fujian Jinlun High Fiber Co., Ltd. has an annual production capacity of 500,000 tons of polyester filament yarn and staple fiber, which is one of the leading polyester enterprises in the region. Liu Dewei, general manager of the company, said that polyester companies can use PTA futures tools to stabilize their operations.

Liu Dewei pointed out that polyester companies can use PTA futures contract prices as reference for some spot operations and control raw material inventory. In terms of buying and paying the contract, when the PTA futures price is lower than the contract price, you can buy it, you can also transfer it on time or due, and you should make the freight as low as possible, and ensure sufficient funds. Polyester companies usually face an overhaul period, and Liu Dewei pointed out that this period also needs research. For example, during the Spring Festival, companies often face employment problems. At this stage, enterprises can implement a combination of current and future. For example, when the far-month contract is raised, the futures are sold; when the far-month contract is discounted, the spot is sold. At the same time, if it is in the purpose of controlling PTA inventory, then the purchase of PTA under the hedging target should not be constrained in the futures month. It is more flexible to purchase and replenish the raw materials with forward contracts, and the risks are controllable. For example, in 2017, due to the typhoon, the PTA of the Hainan factory could not be shipped. In this case, the company solved the raw material problem by using the PTA futures market.

Liu Dewei pointed out that polyester companies can also participate in PTA futures hedging from the perspective of managing product inventory. This is reflected in: First, polyester enterprises can implement unified hedging, single correspondence, first find out the summary of the overall inventory of the enterprise, and then develop a hedging strategy instead of multi-head management. Second, polyester companies can rationally use near-month contracts to reduce costs.

Liu Dewei also pointed out that polyester enterprises can participate in PTA hedging from the perspective of forward sales orders, and can purchase hedging in the PTA futures market according to the downstream product price and delivery date; they can flexibly participate in the main force according to PTA inventory needs. The period of the contract is transferred; you can draw 1803 contract experience and take the initiative to attack the 1807 contract.

Then, what should be paid attention to when the polyester enterprises use the risk prevention and control of PTA futures?

"Enterprises should prevent the direction from being correct but halfway out of the warehouse, and increase the speed of the margin; to prevent the hedging from becoming a speculative, they should have a contented attitude, and must grasp the time, quantity, and direction; control the risk according to price expectations. Reasonable use of the margin policy; to conduct a comprehensive evaluation of benefits, with a view to the total assessment of spot returns, rather than separately calculating the profit and loss of the futures or spot account stage." Liu Dewei said.

hot topic:

The market for PTA and polyester is relatively optimistic?

On March 28th, the roundtable forum of the PTA futures special session of Zhengzhou Commodity Exchange, and the main forum held on March 29th, the guests participated in the PTA market and polyester market in 2018, the impact of the listing of crude oil futures on the PTA market, etc. The topic is discussed.

Wang Yuxing, deputy manager of Purchasing Department of Tongkun Group, said that Tongkun Group's current PTA production capacity is about 4.1 million tons, and it is basically used to meet the Group's own polyester product production needs. After so many years of development, PTA futures have matured, and industrial enterprises, traders, investors and other groups have been widely involved. In particular, Zhengshang's continuous active trading of PTA futures has made PTA futures more suitable for the polyester industry. Tongkun Group participates in the PTA futures market. Generally speaking, starting from the actual operation of the enterprise, the combination of spot and futures is carried out. When the futures market price is relatively low, it will consider building more orders from the futures market. When the futures market price is higher, the spot purchase is the main one. Next, as the PTA futures contract matures in the near future, it is expected that the strength of the PET plant to participate in the PTA futures market will further increase. It is also hoped that the PTA futures will be closer to the industrial demand, more perfect and better serve the industry.

Talking about the polyester market this year, Wang Yuxing said: “At present, the downstream weaving and fabric market is better than the polyester companies expected, and downstream products are not for sale. Recently, we learned through market research that the downstream customers have a small amount of Buying white fabrics even takes a week or so to get the goods, but before it only took a day or two, there was a hard-to-find situation in the market, which drove the demand of polyester companies. From the operation of polyester enterprises In fact, the production and sales data for the first few months of this year is better than the same period of last year. Therefore, the demand for polyester will be fed back to the upstream PTA, which is optimistic about the next market demand."

Wu Wenjing, director of the Information Department of China Chemical Fiber Industry Association, introduced the current overall trend of the chemical fiber industry. She pointed out that in 2017, the chemical fiber industry realized a total profit of 44.495 billion yuan, a year-on-year increase of 38.3%, an increase of 18.44 percentage points over the 2016 profit growth rate. It is the fastest growing industry in the textile sub-sector. Talking about the market situation this year, she said: "Enterprises should continue to practice their internal strengths, and there may be good gains."

Wang Guangqian, an analyst at Dongwu Futures Energy, said: "From the demand side, the current situation is good, and the industry is relatively optimistic."

“Currently, there are several phenomena in the polyester industry that are worthy of attention. First, polyester leading enterprises have entered the upstream refining and chemical industry and are further competing for global market discourse rights, including Shenghong Petrochemical, Zhejiang Petroleum, Hengli Petrochemical, Hengyi Brunei Project. It is the entity polyester enterprise that combines capital operation, accelerates mergers and acquisitions and reorganization, and improves operational efficiency. Third, the expansion of capacity led by the big factory continues, and the expansion of differential expansion increases. This aspect reflects the further advancement of industry technology. On the other hand, it also reflects the diversification of downstream demand. For example, the short-fiber low-melting technology has emerged, and the Tongbang Group's Hengbang project uses a 'one-three-tail' device. Overall, the growth rate of polyester production in 2018 is expected. In the vicinity of 8%, new capacity was added in the first half of the year, and demand in the second half of the year was facing challenges.” Yuan Yuan, a senior analyst at Zhejiang Huarui Information Co., said.