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Hot-rolled coil futures to hedge
News Category:News   Author:admin    Published on:2014-08-284    Writing:【】【】【

The reporter Meng Jia

In the recent period, the domestic steel industry has been before loading the line, weak economic growth led to sluggish downstream demand, crude steel production costs fell resulting in high yields, all aspects of financial constraints lead to market trading, investment light. Since the fourth quarter of 2013, the market was no significant rebound long period, but in nearly a decade rare unilateral decline.

This year the steel industry overcapacity pressures are still strong. Among them, the hot-rolled coil overcapacity situation is more severe. Hot-rolled coil is a slab of raw materials, strip by roughing mill and finishing mill group made by furnace heating. Hot-rolled coil has high strength, good toughness, ease of molding and excellent performance and good weldability, etc., are widely used in cold-rolled substrate, ships, cars, bridges, pipelines and other manufacturing industries. According to statistics, as of the end of 2013, China's total of 70 sets of hot-rolled coiling group, 229 million tons of production capacity.

Domestic hot-rolled coiling group focused on the North and East, at present, a total of seven sets of Shandong hot rolled wide strip mill group, the production capacity of 20.8 million tons.

The 2014 hot-rolled coil market seminar held October 16 in Jinan, Shandong Futures Limited ("Lu Futures") Steel Division, Assistant General Manager Zhang said that in 2014 China's new hot-rolled coil capacity 9 million tons, of which 3 million tons Maanshan Steel, Baotou 5.5 million tons, 500,000 tons of steel, Baosteel, Ningbo. Overall, China's overcapacity plate, steel faces homogeneous competition.

General Manager of the Department of Jinan Iron and Steel Coil Wang Qinggang sales forecast, in 2015, the national demand for all kinds of goods sheet will reach 134 million tons, equivalent to the demand of all hot-rolled wide strip of about 143 million tons; deduct hot strip mill after the coil production capacity of hot-rolled wide strip hot rolling mill production capacity has exceeded 200 million tons, much higher than the demand for hot-rolled wide strip in 2015, the domestic hot-rolled steel production capacity broadband serious surplus.

Zhang said that the sales of major domestic steel mills in the form of direct supply and flow of steel trade enterprise market in recent years, the proportion of direct supply of hot-rolled coil increases, the percentage of sales through distribution market decline. Supplying hot-rolled coil is mainly due to a larger proportion of hot-rolled coil industry concentration is relatively high, while Baosteel, Anshan Iron and Steel, Wuhan Iron and Steel and other large steel mills are in increasing direct supply ratio.

Lu Futures data show that the proportion of the national direct supply hot-rolled coil business in 2005 was 16.7%, in 2013 the ratio raised to 38.2%. Zhang said that this trade lead to changes in the structure of its price volatility is smaller than steel, hot-rolled coil prices are generally higher than the market price of rebar and wire rod.

March of this year, the Shanghai Futures Exchange officially announced the "Shanghai Futures Exchange futures rolled coil standard contract," the official launch of hot-rolled coil futures. Prior to this, rebar futures have been running smoothly for years. Rebar futures since March 27, 2009 listed for five consecutive years as the world's largest iron and steel futures, and in 2013 became the world's most traded commodity derivatives and ranked tenth in derivatives.

Between 2009 to 2013, the Shanghai area Q235B.5.75mm, spot prices rose frequency 1500mm was diminishing, and showed an increasing trend in the frequency decreased. Gold futures Shanghai Dai Yifei steel manager, said: "Over the last two years, a period longer than hot-rolled coil prices rise cycle, companies need to find an effective tool to hedge the risk of price declines." After entering August, hot-rolled coil spot prices have fallen sharply, dropping from 3300 yuan to 2800 yuan per ton.

Hedging, futures are not complicated. For example, the production of hot-rolled coil spot a lot of inventory, in order to prevent future risks falling product prices, may sell the same number of futures contracts, if the stock price falls, the money can make up for the loss of stock futures, reaching the purpose of hedging.

Shanghai Futures Exchange data show that as of September this year, rebar and wire rod futures delivery completed a total of 61 times, including a total delivery of 1.255 million tons of rebar, wire rod total settlement of about 106,000 tons, hot-rolled coil futures completed a total of 3 Completion of about 900 tons.

"Rolled coil futures maturity takes time to cultivate, and cognitive needs of investors use." Zhang disclosed. According to Lu Futures statistics, since this year March 21 to October 10, hot-rolled coil futures traded a total of 2,034,700 hand, the cumulative turnover of 66.405 billion yuan, the average daily volume of 15,000 hand, the average daily turnover of 488 million yuan.

Predictions about the market outlook, Zhang believes, in accordance with the price per tonne of ore 75-90 US dollars, 950-1100 yuan per ton of coke cost estimates, the price of hot-rolled coil futures trading range 2750-3050 yuan per ton.

Wang Qinggang said futures opened higher after the "Eleventh" holiday, businesses trying prices but did not sell well, the will fall, October 15, with the futures weakened again, still did not pick up the cash transaction, the market price at the steady partial state fell outlook is expected hot rolled coil prices remain weak consolidation mainstream.

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