Quzhou Shifang Pipe Industry Co.,Ltd

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The industry pricing model is changed into plastic futures, and the industry will be built.
- Jul 13, 2018 -

 PVC is one of the most volatile plastics varieties in recent years. During the period from June 2017 to September, the price of the main contract of PVC futures of the big merchants was from about 5800 yuan / ton to the highest 7800 yuan / ton, and the market fluctuated greatly, which also brought great challenges to the business of the entity. In severe market fluctuations, it is an important choice to use futures to avoid risks and enhance business performance.

  Following the launch of LLDPE futures in 2007, in May 25, 2009, PVC futures, the second plastic futures commodity of big business, were listed. After approval by the board of directors and shareholders' meeting of Ningxia Limited by Share Ltd, the company began to participate in futures hedging business in 2009. After 2016, the size of the company's insurance coverage increased significantly. In 2016, the size of the company's hedging scale was about 5700 tons. By 2017, this figure had exceeded 20000 tons. In the construction of the system, the company previously had a separate futures department. After 2014, the company had a closer combination of the cash spot to make it easier to carry out the hedging business. The company incorporated the futures Department into the PVC spot sales department, with futures traders, risk supervisors, accounting accountants, funds transfers, compliance administrators. And so on, to carry out professional operation of the package plan, daily settlement, import and export, warehouse clearance, information transfer and so on.

  In fact, the excellent hedging helped the British elite to get a good return. According to the data provided by the company, as at 2017, the total net income of the company was about 36 million yuan.


  Yang Shanghui briefed reporters on the company's typical case of hedging. In the second half of 2016, under the influence of environmental verification factors, the procurement of upstream raw materials was unusually tense, especially in the northwest region, which had reduced the output and reduced the output, and the market price went up quickly. By November, the maximum futures reached about 8200 yuan. Since July, the company has been undertaking the hedging operation on the PVC futures 1701 contract.


  During the period, the PVC team believed that the market was subject to the basic impact of supply, and the market price would eventually return. Therefore, the market was gradually added to the 1701 contract. Before delivery, the company's futures account earned about 6 million yuan, and more than 10000 tons of deliveries have already entered the delivery warehouse. Through this operation, the company not only realizes the profit in the futures account, but also is more important to lock the spot price ahead of time, and indeed evade the risk of falling price in the following market.


  It is understood that in 2017, the PVC futures business of the big business office reached 39 million hands, and the average daily position was 110 thousand hands, which has become one of the important futures varieties. "Futures prices have become one of the main references for business pricing. At present, the PVC spot market has been highly integrated, and the overall response of the futures price to the spot market is true and reasonable. The futures function is effective and has the representativeness of the spot market. Yang Shanghui said.


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