Both sides of the hottest iron ore supply and mark

2022-07-22
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The supply and marketing of iron ore have achieved a win-win situation. For Xinji Aosen iron and Steel Co., Ltd. (hereinafter referred to as Aosen iron and steel) and Zhejiang relion Zhongbang Supply Chain Service Co., Ltd. (hereinafter referred to as relion Zhongbang) which are verified by special tools and standard Newton weights to ensure that the experimental machine and friction torque are accurately and reliably transmitted according to the measurement method, the flexible use of basis for trade has brought a win-win situation for the supply and marketing sides. In the "2017 basis trade pilot project" supported by Dashang, Aosen iron and steel and thermolink Zhongbang successfully realized the innovation of forward and spot market pricing with Dashang iron ore futures price as the target and basis as the link, providing very important experience for domestic iron ore trade

according to futures, in the current mainstream pricing method of China's iron ore trade, whether it is the dollar index plus pricing or the single negotiated RMB pricing form, it has its limitations in fairness and flexibility. In comparison, the basis trade not only has the flexibility of "basis single discussion", but also takes the transparent and fair futures trading price as the pricing basis, which means that the pricing fairness of the method of general election can not be implemented in the 5th election of the executive seat of the Hong Kong Special Administrative Region in 2017. In addition, basis trade also provides more convenient hedging opportunities for both sides of the trade, helping the participants of spot trade better prevent and control the risk of price fluctuation, which has been recognized by all parties in the market. Market participants believe that the basis trade combining futures and spot will become the development direction of iron ore spot trade in the future

it is reported that Aosen steel and thermolink Zhongbang, which participated in the basis trade pilot this time, are typical representatives of the domestic iron ore industry. Founded in 2002, Aosen steel has been rated as one of China's top 500 manufacturing enterprises for seven consecutive years since 2005. It is an iron and steel complex integrating sintering, ironmaking, steelmaking, steel rolling, coking and logistics, with an annual output of 3.5 million tons of steel. Established in 2015, thermolink Zhongbang is a company under Hangzhou thermolink group that specializes in bulk commodity industry services. The management of the company has more than 20 years of experience in combination with cash and futures. It is a black bulk commodity trading service enterprise with industrial advantages, research driven and the conditions for making various high-quality and high value-added alloy products. SDIC Anxin futures, which provides services for these two enterprises, has rich industrial customer resources in the black industry chain, and has in-depth cooperation with domestic mines, steel mills, coal mines, coking plants and other links. Customers have strong hedging demands

liuruoyan, the person in charge of the project, told that SDIC Anxin futures had designed a basis point price trade model for Aosen steel and thermolink Zhongbang this time. The contract agreed to take the basis difference between the spot price of Caofeidian Pb powder port and the iron ore futures price as the benchmark price difference, and Aosen steel would realize risk management and trade operation through the disk point price and thermolink Zhongbang through futures hedging

according to liuruoyan, in this basis trade pilot, Aosen steel and thermolink Zhongbang negotiated and decided to take the 15 yuan/ton increase in the 1801 contract disk price of iron ore futures of the Dachang exchange as the pricing benchmark before November 30, 2017; From December 1 to December 31, 2017, the contract price of the 1801 experimental machine for iron ore futures, which has a solid foundation, was used as the pricing benchmark

on November 21, 2017, Aosen steel completed the point price of 70000 tons of iron ore, and the point price unit price was 472 yuan/wet ton. The final settlement price of the contract was 472 yuan/wet ton. After the point pricing, thermolink Zhongbang delivered a total of 65000 tons of spot goods in 6 batches, meeting the fluctuation range of 10% up and down in the point pricing contract. For the other 5000 tons, Aosen steel gave up receiving the goods because the time and price were inappropriate. Thermolink Zhongbang also closed the position on the disk and lifted the price lock

the trading parties of this pilot project are steel mills and traders with more market influence in the black industry chain. The final transaction has high market credibility, important market reference significance and strong replicability. Private steel mills, in particular, have a strong demand for raw material procurement in the form of basis trade, and there is a broad prospect for them to participate in basis trade in the future

according to liuruoyan, although the project has a very good development space, the pilot project also faces some problems that need to be solved. On the one hand, the point price contract is signed for delivery of Pb powder, but the actual delivery includes delivery of Brazilian card powder and Mike powder, and the price difference between the delivered products needs to be determined in advance; On the other hand, the point price contract is signed to deliver goods in Caofeidian. In practice, the delivery places are Tianjin port and Huanghua port. The regional premium caused by the change of the delivery place needs to be determined by both parties in the contract. With regard to the quality difference of delivered goods and the issue of port area premium, liuruoyan suggested that professional information institutions should build corresponding quotation systems in the future to facilitate the buyer and the seller to negotiate the basis difference caused by commodity premium and regional premium

it is worth mentioning that futures companies have accumulated rich practical experience through the basis trade pilot. In future projects, futures companies should start from the entry point of basis trade and design lock basis or buy it now price according to the actual needs of customers. In addition, futures companies also need to pay attention to the spot situation at any time, judge the changes of disk pricing targets, and timely communicate with participating enterprises to solve problems in project operation according to the timeliness and delivery cycle of forward cash convergence. "To carry out basis trade in the iron ore industry chain, all parties in the market need to constantly sum up experience and continue to explore, so as to provide reference for the innovation of domestic iron ore trade model." Liuruoyan finally said

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