Make good use of PTA futures

The operation of the PTA and polyester industries is affecting the “nerve” of the entire chemical fiber industry. From the actual situation, polyester enterprises make extensive use of PTA futures prices in spot trade, and PTA futures prices have become the “wind vane” for domestic polyester industry chain product pricing. The listing of RMB crude oil futures in Shanghai has opened up a new era for China's futures market, especially the high attention of the polyester industry chain.

Recently, the 17th China Hangzhou Chemical Fiber Forum (2018) was held in Hangzhou. During the forum held in the Zhengzhou Commodity Exchange PTA futures Session, meeting for the PTA producers use the futures of methods, Polyester companies how to effectively use tools PTA futures steady operation, the current overall operation of the PTA futures market, as well as PTA and polyester Topics such as the market's next market are discussed.

PTA producer:

Rational use of futures to improve profitability

Yisheng Petrochemical is the world's largest PTA producer. It has three 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 capacity.

Rongsheng Petrochemical is one of the investors of Yisheng Petrochemical. Its 2017 annual report shows that during the period, Yisheng Dahua achieved revenue 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 343 million yuan; Hainan Yisheng realized revenue of 161.6. 100 million yuan, net profit is 51.26 million yuan.

The effective use of futures is one of the reasons for the substantial increase in the profitability of Rongsheng in 2017. Under the premise of meeting the production and sales needs of the 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, and enhance the ability to optimize the allocation of resources for the company and its subsidiaries. The raw material procurement and product sales of the petrochemical industry chain have provided strong support.” Rongsheng Petrochemical stated in the annual report.

Wu Zhong, deputy manager of the Yisheng Petrochemical Research Center, 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: "In the process of adaptation, I also paid some tuition fees. After the adaptation period, 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 first principle is that the direction is the opposite, the second is the same type, the third is the same quantity, and 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 backlogged 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, the value-preserved inventory can be sold by selling and delivering.

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 is large enough, it will try to lock a part of the profit." 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.

Polyester enterprise:

Effective use of PTA futures for stable operation

PTA is the most important raw material for the production of polyester polyester fibers. So, how can polyester companies effectively use PTA futures?

Tongkun Group has formed a complete industrial chain of “PTA-polyester-spinning” and has a leading position in the national chemical fiber industry. Its actual annual production capacity of PTA is about 4.1 million tons, and it is basically self-use. The annual production capacity of polyester is about 4.8 million tons, and the annual production capacity of polyester filament is about 5.2 million tons.

Wang Yuxing, deputy manager of Purchasing Department of Tongkun Group, said that the company participates in the PTA futures market, generally starting from the actual operation of the company, combining the spot and futures operations. When the futures market price is relatively low, it will consider building more from the futures market. single. When the futures market price is higher, the spot purchase is the main one.

“PTA futures have matured after so many years of development, and industrial enterprises, traders, investors and other groups have participated extensively. In particular, Zhengshang has promoted continuous active trading, making PTA futures more suitable for the needs of the polyester industry. With the maturity of the near-month contract, it is expected that the strength of the polyester 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."

Jinlun High Fiber Co., Ltd. has an annual production capacity of 500,000 tons of polyester filament and staple fiber, which is one of the leading polyester enterprises in South China. The company is also one of the delivery warehouses of PTA futures. At present, the business of delivery warehouses is booming. The enterprises that are going to deliver are mainly enterprises in South China and Jiangsu and Zhejiang. Therefore, the company has formed certain profits in product handling and storage.

Liu Dewei, general manager of Jinlun High Fiber Co., Ltd. elaborated on the value that futures tools can bring in many aspects. He said that polyester companies can use PTA futures to stabilize their operations, and take part of the spot operation to control raw material inventory based on the PTA futures contract price. In terms of buying delivery and contract, when the PTA futures price is lower than the average price of the contract, you can buy it, you can also carry out the delivery or due delivery, reasonably reduce the freight, and ensure sufficient funds.

Polyester companies usually arrange a certain overhaul period within two years. Liu Dewei pointed out that the timing of maintenance should also be studied. Take the Spring Festival as an example. During this period, enterprises often face difficulties in employment, and downstream demand is declining, which is suitable for maintenance. Therefore, at this stage, polyester companies can implement a combination of time and period to avoid the risk of inventory price decline. For example, when the far-month contract is raised, the futures are sold; when the far-month contract is discounted, the spot is sold. If it is in the purpose of controlling PTA inventory, the purchase of PTA under the hedging target should not be constrained in the futures month. It is more flexible to use the forward contract to increase or decrease the premium, and the risk is controllable.

“In the second half of 2017, due to the typhoon weather, the PTA of Hainan PTA contract suppliers could not be delivered in time. In this case, our company used the PTA futures price model to quickly purchase the spot, which avoided the fixed price spot. Also solved the problem of insufficient supply of raw materials in a timely manner." Liu Dewei said.

Liu Dewei also pointed out that polyester companies can participate in PTA futures hedging from the perspective of managing product inventory. First, unified hedging can be implemented, and the corresponding ones can be unified. After clarifying the overall inventory of the company, the hedging strategy is formulated uniformly instead of multi-head management. Second, it is reasonable to use near-month contracts to reduce costs.

Liu Dewei further pointed out that polyester enterprises can participate in PTA hedging from the perspective of long-term 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 contract will be transferred to the future; it can also draw 1803 contract experience and take the initiative to attack non-main contract such as 1807 contract to further reduce warehousing and financial expenses.

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 break the position halfway, pay attention to the speed of additional margin; should be satisfied with the attitude of meeting the established goals, and must grasp the appropriate principle in time, quantity and direction; it is reasonable to control the risk according to price expectations. Take advantage of the margin guarantee policy provided by the exchange; the board of directors should conduct a comprehensive benefit evaluation, in order to assess the relevant team of the spot total income, rather than separately calculating the profit and loss of the futures or spot account stage." Liu Dewei said.

Market forecast:

PTA and polyester market are relatively optimistic

Next, how the PTA and polyester market will be a topic of great concern to the industry.

In this regard, Wu Wenjing, director of the Information Department of China Chemical Fiber Industry Association, pointed out that the chemical fiber industry achieved a total profit of 44.495 billion yuan in 2017, a year-on-year increase of 38.3%, which is the fastest growing industry in the textile sub-sector. The good days of the industry last year were supported by crude oil prices to a considerable extent. One of the important factors determining the market of chemical fiber in 2018 is still the price of crude oil. It remains to be seen how the price of crude oil will move this year. Although the demand for downstream weaving market is better in the short term, it is expected that the growth of downstream demand market will not be particularly large from the whole year. It is expected that the chemical fiber industry will continue to improve overall in 2018.

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. Previously, we learned through market research that it takes a week or so for downstream customers to buy white fabrics in a small amount. Arrived, but only need to wait a day or two, the market has appeared in a difficult situation, which has stimulated the demand of polyester enterprises. In the first quarter of this year, the production and sales of the company's polyester products were better than the same period last year, Compared with the historical data, the PTA inventory is not high. In the next step, the demand for the polyester link will be fed back to the upstream PTA. At the same time, considering the higher operating rate of the polyester plant and the greater maintenance of the PTA unit, it is expected that the PTA will be expected. It is unlikely that inventory will continue to grow."

Wang Guangqian, an analyst at Soochow Futures Energy, said: "The PTA supply in the market is relatively transparent now. The polyester demand market is better, but there are also uncertain factors. Overall, this year's PTA market is cautiously optimistic."

Mo Jianjian, deputy general manager of Hengyi Trading Co., Ltd. said: "From the supply side, there are still maintenance expectations in the market in May, which will remove some of the PTA inventory. Overall, the current supply and demand contradiction in the market is not fierce, and the demand side performance is also In terms of gross profit margin, in the first quarter of this year, the price difference between PX and PTA was compressed, from about 1,000 yuan / ton to about 800 yuan / ton. The polyester market is relatively strong, belonging to high inventory, high load, High profits, but it remains to be seen whether this will continue."

In addition, Yuan Yuan, a senior analyst at Zhejiang Huarui Information Co., said at the Chemical Fiber Forum that it is expected that the growth rate of polyester production will be around 8% in 2018. The new capacity will increase in the first half of the year and the demand will be tested in the second half of the year.

Zheng Shang Institute:

Pushing PTA futures service to the real economy

According to data from Zhengshang, PTA futures totaled 140 million lots (unilateral) in 2017, 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, an increase of 25.65%. Among them, the participation of corporate clients has increased significantly, the average daily 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%.

The relevant person in charge of Zhengshang pointed out that PTA futures is a relatively high delivery rate in China's futures market, ranking fourth among all varieties in the national futures market and the first among chemical futures. 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 variety sequence.

According to reports, in 2017, Zhengshang Institute carried out the construction and maintenance of the PTA futures market. On the one hand, we actively promoted opening up to the outside world, formulated a PTA introduction program for overseas traders, and steadily promoted the introduction of PTA futures into overseas traders. Zhengshang 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 is basically ready. On the other hand, the implementation of continuous active programs for futures contracts such as PTA, comprehensively adopting various measures such as reducing transaction delivery costs and introducing futures market makers, initially achieved the goal of continuous contractual activity. At present, the relevant contracts of PTA futures have been completed, and the activeness of relevant contracts has provided more convenient hedging options for entities, which has improved the efficiency of hedging.

According to reports, at present, more than 30 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 introduction of PTA futures related rules rules for overseas traders has been basically completed.

In this regard, the relevant person in charge of Zhengshang Institute pointed out that the “ Belt and Road Initiative” and the opening up of China's commodity futures market have provided a rare historical opportunity for the introduction of PTA futures into overseas traders. China's PTA downstream polyester products import and export countries and "along the way" along the country highly fit, opening up crude oil futures also lay the foundation for the PTA futures open policy, has set a revision of the model rules. At present, PTA futures prices have become the pricing vane of domestic polyester industrial chain products. Moreover, the increase in the volume of import and export of polyester fiber and chips and flakes at home and abroad also requires a futures price with world influence as a reference. As the only polyester industry chain futures product in the world, PTA Futures has been highly concerned by related companies in Europe, America and Southeast Asia. They also hope to enter the market.

The second is to further improve the continuous active program of futures contracts. Zhengshang Institute will track the implementation effect of continuous active programs and continuously optimize and improve them. When conditions are ripe, they will be promoted to other varieties.

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 entities.

Fourth, close to the spot market demand, and constantly improve the PTA rules system to ensure that the PTA futures function is better 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.