In recent years, under the background of serious overcapacity of cement industry, the competition in cement market has become increasingly fierce, and the price fluctuation has become more frequent. Especially in the past two years, the price of cement has experienced a sharp rise and fall due to the double control of energy consumption, power limitation and other factors. Price changes have a direct impact on the annual economic benefits of enterprises, but also related to the stable and sustainable development of the entire industry.
Under such circumstances, the industry urgently needs to find a way to mitigate or even avoid the huge impact of sharp price fluctuations. "Futures options are an effective tool to help enterprises avoid the risk of price fluctuations." Recently, Guan Dayu, a well-known option expert, said in an exchange with China Cement Network that futures options have been used in steel and other industries for many years, and now cement futures are about to be listed, the cement industry will usher in a new era.
Guan Dayu pointed out that the original intention of the establishment of the futures market is to help real enterprises find commodity prices and avoid the risk of price fluctuations. The futures market has three functions: price discovery, risk hedging and asset allocation.
It is understood that the futures market is gradually developing on the basis of developed spot trading, and China's futures market is experiencing four eras, namely, the age of enlightenment, the age of wealth, the age of industry and the age of service. Guan Dayu said that China's futures market is now entering the industrial era, and will certainly enter the service era in the future, that is, options, futures, all financial derivatives will be seamlessly docked with the spot, integrated together, continue to transform, and promote industrial services.
Guan Dayu said that the opening of cement futures trading is an opportunity for the cement industry to participate in the financial derivatives market. Cement enterprises can buy or sell contracts with the same quantity as the spot but in the opposite direction through the futures market, and establish a profit and loss offset mechanism between futures and spot, thus transferring the risk of price changes.
However, the cement industry has its own limitations, cement production has a strong continuity, a large number of product backlog will cause inventory increase; cement prices are affected by many factors, which greatly increase the instability of cement futures market prices. Then, under the premise of guaranteeing its economic benefits, how should cement enterprises use futures options? How to reduce the impact of inventory price fluctuations on production and operation? On March 15-16,
2023, Guan Daewoo, a well-known option expert, will bring you more wonderful sharing at the "2023 China Cement Industry Summit and TOP100 Award Ceremony" held by China Cement Network. Stay tuned!
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