The current combination + Internet" leads the new trend of the domestic plastics industry

02/03/2022
There are many problems in the current development of the plastics industry. These problems are far from being substantively resolved. The adjustment of the industrial structure has become a "watershed" for the reshuffle of the industry. Facing the reshuffle of the industry, enterprises in the industry chain are actively seeking transformation and upgrading. In different paths, "current integration + Internet" has gradually become the "mainstream".

The development of traditional industries is troubled

There are many problems in the current development of the plastics industry. These problems are far from being substantively resolved. The adjustment of the industrial structure has become a "watershed" for the reshuffle of the industry.

According to the reporter of Futures Daily, in recent years, while the rapid growth of investment in the plastics industry has driven the development of the industry, it has also brought about the negative effect of overcapacity. Especially in the fields of agricultural film and pipe profiles, such as BOPP, BOPET, profiled materials and other serious overcapacity situation, it is difficult to see a significant improvement at present.

At the same time, there are still common problems in the industrial industry that financing is difficult and expensive, and labor costs have risen rigidly, and problems such as exceeding the affordability of enterprises have also restricted the development of the industry.

In addition, trade frictions between South America, Central North America, Southeast Asia and the domestic plastics market are also very frequent, which has seriously weakened the export competitiveness of my country's plastics industry.

In terms of market judgment, due to the strong properties of plastic bulk commodities, the price of plastics fluctuates greatly, and the high financing costs of enterprises make customers in related industries at a loss when faced with violent price fluctuations.

There are also many difficulties in spot trading. Distributors are distributed regionally, and prices are not transparent in many links from manufacturers to terminals, making end consumers bear corresponding cost pressures.

The current combination mode tends to be diversified

Liao Chengtao, President of Beijing Silian Chuangye Chemical Group Co., Ltd. (hereinafter referred to as "Silian Chemical"), said that the current plastics industry and plastic futures are more and more closely linked. The tools and models of the company have expanded from the earliest pure futures trading to the current over-the-counter options, point prices and a series of swap products. All transformation ideas focus on the combination of the plastics industry and financial derivatives.

In recent years, as the risk of price fluctuations in the plastics market has become increasingly prominent, the plastics industry has more diversified modes of combining futures and currents with futures and derivative instruments. For example, Liao Chengtao said: "When upstream petrochemical companies are out of sync with the current market price, we may use futures for short-term hedging more often to lock in the risk of relative prices. While weighing the planned purchase volume, sales volume and inventory volume three We tend to use options tools to reduce their volatility and impact.”

"As an intermediate link, traders not only carry the production and sales of upstream rigid needs, but also face random scattered procurement downstream." Liao Chengtao said that in addition to the pressure of upstream policy price transmission, traders are also faced with planning, sales, Volatility risk between inventories. Since last year, Silian Chemical has conducted counterparty transactions of over-the-counter options with the risk management companies of many futures companies such as Yongan Futures and Nanhua Futures. “We’ve done put options, as well as call options and low-cost combination options. In general, using options allows a business to achieve a balance between planned volume, sales volume and inventory. So far , option is a more reasonable tool, and its impact on the industry will become deeper and deeper in the future." Liao Chengtao said.

It is understood that the traditional management model of "relying on old experience, but also relying on the sky" is gone forever, and the integration of "industrial finance" and "financial industry" has become a new model for the market to actively manage risks. At present, industrial customers including Silian Chemical and Grand Commodities have begun to actively combine financial derivatives tools, and financial institutions have also begun to closely integrate spot and actively carry out spot trade.

Wang Qiang, Director of the Derivatives Division of Yuanda Property Group Co., Ltd., introduced that since February last year, the company began to provide price-pointing and price-insurance services for companies in the plastics industry. Now its business volume has nearly doubled every month, and the accumulated over-the-counter options transactions The total contract size is about 50,000 tons.

Cheng Peng, deputy general manager of Huatai Great Wall Capital Management Co., Ltd., said that at the end of last year, the company's over-the-counter options business gradually developed. At the beginning, the customers were mainly investors, and they were very smooth and proficient in the internal and external business model. After that, it also began to focus on finding real enterprises to provide services for the real economy.

The current combination model that occurs in the over-the-counter market is becoming more and more "popular" among real enterprises, and the development of this trend is inseparable from the joint promotion of "buyers" and "sellers" in the financial circle. Lin Chao, manager of the quantitative trading department of Shenzhen Kaifeng Investment Management Co., Ltd., said that the company has been committed to building a quantitative team since 2013. Last year, it began to get involved in over-the-counter derivatives trading, mainly providing over-the-counter option quotations and quotations on plastic and PP varieties. Market maker services. "Our main model is to interact with industrial customers to understand their actual needs in production and sales, and to provide them with services including pricing, inventory management, and advance sales. Enterprises may have some problems in the entire production and operation process. For hedging needs, we use our unique advantages in market research and basis trading to give them some guidance at some special times, or reduce the price of options at special times, so that they can hedge more effectively.

Yang Chuanbo, deputy general manager of Zhejiang Yongan Capital Management Co., Ltd., said that the company began to engage in off-site business in 2014. At present, the overall spot size has been significantly improved compared with the original, and the business model has gradually transitioned from the original selection and participation in the spot. To normalize participation in spot trade, and provide some risk management products for upstream, midstream and downstream enterprises, such as providing some continuous forward contract quotations to solve the problem of discontinuous main futures contracts.

"Combining spot, futures and options, we are committed to providing comprehensive risk management solutions for corporate customers. To solve the problem of continuity, we need to build a certain scale of spot before we can design some products and provide services. "Yang Chuanbo believes that, whether it is the transition from the financial side to the spot side, or the spot embraces finance, to transform to the combination of futures and cash, the primary entry point is to return to the essence of spot.

He said that in the first stage, first establish a daily spot logistics connection with the counterparty. During this process, the two parties will enhance mutual understanding, and the company will gradually become familiar with the entire futures-spot combination trading model and derivatives applications. Slowly develop your own talent team and business strategy. The second stage is a more in-depth cooperation between the two sides. "We are also cooperating with some steel mills, including oil mills, on similar risk management, or trying out deeper cooperation models such as investment consulting and the establishment of industrial funds. In the second half of the year, we will also work with a steel mill to establish a family company," he said.

For one of the main forms of current combined operation of enterprises, the basis model of "spot disk price + futures premiums and discounts" is being used by more and more plastics industry companies. What are the benefits of buying a "basis"? In Yang Chuanbo's view, first, the formation process of futures prices ensures the fairness and impartiality of basis trading; second, basis trading is more efficient than the long negotiation process and labor cost of pricing sales; third, the method of basis trading is adopted , people with different views have the opportunity to share the dividends of random fluctuations in the market; fourth, use the basis point price, which can be bought up or down, and through the second postponement of settlement, so as to solve the conflict of price expectations and logistics links. question.

Liao Chengtao believes that for traders, it is necessary to "change and respond to changes" in managing risks. At present, e-commerce and various financial derivatives in the plastics market are developing rapidly, and plastics companies urgently need to improve their risk awareness, as well as their ability to use and combine these tools.

Solve traditional problems with Internet thinking

In the past two years, the most lively field of commodity B2B is the plasticization industry. In 2015, more than 20 plastic chemical B2B e-commerce platforms such as "Looking for Plastics" and "Chemical Plastics Exchange" appeared one after another. In March of this year, Foxconn's "Buy Plastic Network" also announced its launch. At yesterday's venue, "Internet" has also become one of the key words in the transformation and upgrading of the plastics industry.

"'Plastic + Internet' is a business that colleagues in the plastics industry must face, adapt to and embrace in the new era." Cai Daying said that the Internet has broken the geographical limitations of traditional wholesale markets, providing a cross-regional, Intensive development provides a platform.

As we all know, the characteristics of the plastics industry show a "pyramid" structure. The upstream is relatively concentrated and the downstream is very scattered. There are obvious information opacity and asymmetry. In addition, the profits among the current traders are getting thinner and thinner. Trade paths are getting narrower.

"For the traditional spot plastic trading, in order to ensure the safety of trading, the market can only be carried out in a small circle in a certain area, and the trading efficiency and trading convenience are obviously limited." said Qiu Huiling, R&D Department of Shanghai Chemical Exchange Market , the Internet trading platform can make information relatively transparent, improve the convenience of transactions, and at the same time, the platform can also be used as a security guarantee.

In addition, the traditional forms of plastic transactions are mostly telephone, face-to-face interviews, etc., which are relatively complicated to match and the efficiency of the flow link is low. However, with the application of advanced e-commerce technology and the establishment and implementation of an electronic transaction system, we must have the courage to try and enter the field of e-commerce.

"More online trading platforms are developing rapidly, providing Internet + manual services, collecting a large number of upstream and downstream resources and real transaction data, and matching accurate information by professional traders to help customers quickly obtain cheaper goods. At the same time, there are many supporting services, Providing logistics, financial and other services for buyers and sellers, these series of services provide a convenient way for traders." Zhongyu Information analyst Yang Juan told the Futures Daily reporter.

Qiu Huiling, the R&D department of Shanghai Chemicals Trading Market, also agrees with this point. "Traditional spot traders are of different types, with their own shortcomings and strengths. As a 'one-stop' trading service platform, you can choose their own comparative advantages, take advantage of different roles to complement their weaknesses, and support corresponding information, payment, finance, and logistics. and other services." She said that at present, one of the plastic e-commerce models is a platform built by the sellers to sell their own products, and the other is an open and cooperative third-party e-commerce platform.

For manufacturers, through the Internet platform, labor costs can be reduced, and for buyers, the price is more fair and just. The electronic transaction sales model well caters to the development trend of Internet thinking and expands the sales channels.

However, at present, many production enterprises do not have their own network platforms. Although they can choose to build their own channels, it is difficult to achieve this in the current industry structure. Most of them are looking for third-party network platforms that can cooperate. Such as: Yanchang China Coal bids at the West Trading Center of Shanghai Petroleum Exchange; Sinopec cooperates with Strait Petrochemical to sell products on its Internet.

It is worth mentioning that in the sub-venue of yesterday's meeting, the one-stop e-commerce service platform for plasticization transactions under the subsidiary of the listed company Kingfa Technology, Zhuhai Kingfa Dashang Supply Chain Finance Co., Ltd. - "Easy Plastic Home" was officially launched online. In 2014, as the No. 1 new material company in the Asia-Pacific region, Kingfa Technology began to promote the development strategy of "entity enterprise + Internet", established Kingfa Business, and officially entered the field of plasticization e-commerce.

It is understood that the "Easy Plastic Home" platform is committed to creating a one-stop e-commerce service platform for plasticizing transactions, relying on the industrial background and efficiently integrating the business flow, capital flow, warehousing logistics, and easy plastic finance and other services of the plasticizing industry chain. . In addition, the platform integrates business models such as self-operation, agency sales, matching, and direct sales, providing diversified business cooperation methods for suppliers and downstream customers in the plastic chemical industry chain.

In the eyes of industry insiders, the "plastic + Internet" model will become the mainstream in the future, and it will play a subversive role in promoting the entire industry.