From small to big, mature transformation! The tenth anniversary of the launch of PVC futures

- May 29, 2019-

According to international finance news, PVC futures celebrated their 10th birthday on May 25, 2019.A total of 1.71 million tons have been delivered, and more than half of the positions have been held by legal clients. Over the past ten years, we have witnessed the deepening of the integration of futures industry and finance.

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PVC futures market 10 years mature transformation

Looking back ten years ago, on May 25, 2009, PVC futures were listed on the board of trade, becoming the second plastic variety introduced by the board of trade, providing a "safe haven" for spot trade in the changing development.

The 10 years since PVC futures went public have not only been a decade of growth and maturity, but also a decade of continuous improvement of the system and effective play of functions.And its twists and turns of the development process, but also to the development of domestic futures varieties to provide a rich historical reference.

Supply side structural reform, spot market exhibition new look

At the initial stage of listing PVC futures in 2009, its trading volume has reached 18.08 million hands, with an average daily trading volume of 119,700 hands.Subsequently, the market experienced several years of downturn. In 2015, PVC futures launched the delivery registration brand system, and the spot market underwent supply-side structural reform, which made the spot market take on a new look.The volume of transactions in 2016 and 2017 increased by 618% and 247%, which ushered in explosive growth.In 2018, the daily turnover reached 149,600 lots, an increase of 25% compared with 2009.

Now close linkage, enterprises recognize the role of risk aversion

"The PVC market is now very closely linked.In the past two years, the current basis is stable at -200 yuan/ton to 200 yuan/ton, which is narrower than in previous years.Because there are a lot of forward and current arbitrage trades in the market, it irons out the big fluctuations in the basis and improves the representativeness of futures prices to some extent."Industry insiders said.

At the initial stage of PVC futures listing, the main participants in the industrial chain were middle and middle traders, while the participation of upstream and downstream enterprises was limited. The overall anti-risk capability of the industrial chain was still weak, and the concept was relatively immature.It was after the market volatility caused by the 2008 global financial crisis that companies began to realize the hedging role of futures.Plastic prices fell rapidly in that year, plastic products industry main business income and sales margin significantly decline.Because there is no proper means of risk hedging, the cash operation losses are serious, making enterprises realize the importance of futures risk aversion.

Upstream enterprises need to maintain a stable production and sales pace, and the risk comes from price fluctuations, while downstream enterprises are more likely to lock in costs, while traders participate in PVC futures in order to better transfer risks.

Combined with industry and finance, future PVC futures market will show more highlights

In recent years, enterprises from all sides of the industrial chain have significantly improved their understanding of futures instruments.Especially in the context of the combination of industry and finance, PVC financial property has been enhanced in recent years, and futures pricing has gradually become the mainstream of the market.

The person in charge of the exchange told reporters that in the future, the exchange will continue to promote PVC futures contract system optimization, such as continue to improve the delivery of registered brand system, strengthen the existing registration, inspection exemption brand dynamic management, timely expand the registration, inspection exemption brand scope;The warehouse delivery system will be promoted to keep close to the spot trade habits and reduce the cost of enterprises participating in the delivery.In addition, the exchange will also increase the intensity of industrial cultivation, support PVC and other plastic varieties of production and finance cultivation base construction and related training activities.With the continuous improvement of system rules and the in-depth development of industrial cultivation, the participation in PVC futures market is expected to increase steadily in the future, and the combination of future and future will present more highlights.