The volatile prices of non-ferrous metals have caused more and more related companies to seek a development path to avoid risks. In the Pearl River delta, which has an annual output of 1.5 million tons of aluminum and 24.8% of the country's total output, more than 200 aluminum production enterprises have gathered and the annual production capacity is over 1 million tons. Recently, the reporter visited the PRD aluminum business, aluminum trader and futures brokerage company along with the “Metal Journey†research delegation of the Shanghai Futures Exchange. To enterprises hedging the name "Many customers will now take the initiative to call the hedging. Although not necessarily involved later, but at least we can see that they began to pay attention." Hua Bin futures deputy general manager Pang Bin said. The sound of three telephones lined up on her desk interrupted the conversation from time to time. She said that these three telephones were specially opened by the company to better serve customers and provide consultation. “The sharp increase in raw material prices has increased corporate costs, magnified potential risks of default, and forced companies to actively seek effective tools to circumvent price risks.†Xiong Qu, manager of Jiangnan Futures Market, another futures company in Dongguan, introduced the company since the beginning of this year. Only the development of corporate customers has quadrupled from last year. Xiong Qu said that in the past few years, local aluminum processing companies mostly adopted procurement models that used to buy or purchase long-term orders, and they used very few futures markets. They had misunderstandings and even strong prejudices against the futures market. However, this situation is being broken a little. In 2002, the continuously rising aluminum prices reached a peak this year. The severe market conditions have caused many companies to suffer. They have to revisit the futures hedging that was once considered "speculative gambling." Xiong Qu told reporters that since the beginning of this year, aluminum processing companies that came to the company to consult the futures market and how to use futures to avoid business risks have gradually increased, and several large-scale aluminum processing companies have also opened accounts in the company. Pang Bin used a set of data to prove that local companies' awareness of hedging is increasing. Only the aluminum companies that opened new accounts in January-August have doubled compared to the same period of last year. In July, 11 aluminum companies opened accounts in the company. The market has great potential “The output of aluminum in the Pearl River Delta is about 1.449 million tons, accounting for 24.8% of the total aluminum output for construction in the country, and there are more than 200 production companies. This large market needs development and great potential.†Shida Futures has a senior position Aluminum researchers told reporters that many manufacturers in the Pearl River Delta have a spot background. With entities as support, it is actually very cost-effective to participate in hedging. During the visit, it was found that some aluminum processing plants are actively involved in hedging. Guangming Aluminum Factory is one of them. The general manager Xie Weiming told reporters that the participation in the futures market is recommended by friends, but he still does not understand the hedging and delivery knowledge and is currently studying it. And Fu Jiele (Dongguan) Material Science and Technology Development Co., Ltd. Administrative Manager Min Wenhao told reporters that he is currently "testing water" and wants to use his own hedging operations to become familiar with the unique market functions and standardized operations of the futures market, and how to use futures The function of market discovery price. "I am writing a report for the company's board of directors so that they can understand the concept of risk hedging through futures hedging." In Xingda Aluminum Factory, the reporter found in the office of its chairman, Yu Fabo, that the function of price discovery and hedging in the futures market has penetrated into the company’s business philosophy at the decision-making level. Yu Fabo told reporters that a thick stack of price lists on the desk is a domestic copper/aluminum-zinc spot market price information provided by an information company, and is accompanied by a daily review of the Shanghai and LME futures markets. Through this information, you can understand in a timely manner. Recent changes in non-ferrous metal prices, and accordingly determine the company's purchase and sales prices. “A recent study reported that China’s per capita aluminum consumption is 20% of the Western developed countries and 27% of Japan’s. The consumption potential of the aluminum industry is huge. We are currently expanding the new aluminum company and we expect to complete the production next year. Its production scale is more than ten times bigger than Xingda, and it must participate in the hedging of the futures market at that time, otherwise the price risk is too high,†said Yu Fabo. In Nanhai, Foshan, the country’s larger aluminum industry base, more companies are actively involved in hedging, and one of the larger local traders’ metal materials companies is exploring the development of a spot market using futures pricing. the way. Revelation of “Qingyi Model†“A lot of banks think that enterprises participate in futures hedging is gambling. I said that enterprises do not participate in hedging. It is gambling.†Feng Jingming, chairman of Guangdong Jingyi Metal Co., Ltd., introduced the use of Cantonese with a strong Cantonese accent. Participating in hedging experience is full of passion and sentence. This privately-owned joint-stock company was established in 1999 and registered capital of 20 million at that time. The company mainly produces seamless copper tubes for air conditioning and refrigeration, connecting tubes for air conditioning and various process tubes for air conditioning. After a short period of 7 years of development, it has already reached a certain scale. Currently, it has four major industrial companies, including Fine Art Wanxi Copper and Aluminum, and it has an annual profit of 100 million yuan. The company is also actively preparing IPO. "Many companies that started at the same time as we closed down were almost closed, and 85% of the companies that went out of business were caused by price fluctuations. If the company chose to use the futures market, it would not have died so early." Li Weibin, general manager, did not hide his views. In his view, if you do not use futures hedging to hedge against the risk of raw material price fluctuations, it is still difficult to survive in the current market conditions. It is even more difficult to make it bigger and stronger. Feng Xiangming admits that in order to avoid market risks, with the help of futures companies, Guangdong Jingyi officially entered the Shanghai aluminum market for hedging from 2004, in order to tie in with the company's trading in the spot market and lock in the company's operating profits in advance. This type of hedging, known in the industry as the "fine art model," has created a huge profit for the company while avoiding risks. What has always been proud of him is that the company has achieved a record of zero stock of raw materials. According to reports, the so-called "fine arts model" is the company's use of both micro and macro hedging methods, in the case of meeting the spot demand, with futures to avoid risks. The so-called micro hedge is based on the company's purchase of copper on the day and the short-term preservation of copper products. Macro-hedging is based on the company's different sales methods, corporate inventory, procurement methods to determine the hedging of the company. The use of spot futures two-way positions, through hedging, will be part of the spot inventory into futures inventory, reducing corporate capital costs. “This practice has changed the practice of production companies in the past to reduce costs, hoarding raw materials to occupy large amounts of circulating funds for interest and warehousing, etc. in the spot market when the price is low. Instead, it uses the futures market to buy hedging, only A 5% margin guarantees the source of goods, reduces costs, and reduces the burden of capital and inventory." A long-term research company's experts believe that "fine arts model" is worth learning from.
