The pre-,mid-and post-business of Yunnan Copper Co., Ltd. involves mining, mineral processing, smelting, sales and trade, mainly smelting and processing. In recent years, the economic situation is complex and changeable, and copper prices fluctuate greatly. However, along the way, through continuous exploration, the company's futures hedging business system, operation process and management mode have gradually grown, improved and improved, and have withstood the constant test of production and operation and market turmoil, and made important contributions to the company's production and operation with the strong support of relevant futures tools of Shanghai Futures Exchange.
With the continuous advancement of market globalization, the international economic environment is becoming more and more complex and changeable, and the fluctuation of commodity prices is more and more intense, and the auxiliary role of futures market in the operation of the real economy is becoming more and more obvious. The exertion and effective application of futures function has gradually become one of the indispensable elements for the survival and development of enterprises. In the process of self-produced ore preservation, copper raw material procurement, product sales and trade, the demand, depth and breadth of hedging transactions in daily price risk management are constantly expanding, which plays a particularly important economic function and shows a very important role.
In the copper concentrate raw material port upstream of the industry, most mines have changed from the point price in the contract period after delivery to the application mode of futures tools that actively grasp the favorable price and implement the value preservation in advance, effectively avoiding the dislocation between the output cycle and the satisfactory market price, and fully improving their own profit space.
In the smelting process, while passively accepting the spot price of raw material suppliers, through the existing hedging mode, the futures tools are quickly applied to hedge the value, which completely avoids the value fluctuation of copper concentrate raw materials in the production process and stably obtains the smelting and processing income. The effective play and joint application of futures functions have blocked the uncertain risk of the time difference between smelting and sales.
In the management of copper inventory and value, whether in the short, medium or long period before liquidation, the primary task of hedging business is to avoid inventory impairment and uncertainty caused by unfavorable decline, followed by effectively digesting inventory occupation cost and other expenses, and the third is to tap the potential and possibility of inventory appreciation under plain market conditions. The realization of these goals and demands is due to the existence and maturity of the non-ferrous metal futures market of Shanghai Futures Exchange, which enables us to make targeted combination planning and realize expectations under the constantly improving market system and in the multi-level and three-dimensional extended market structure.
On the strategic level of hedging demand, the existence and maturity of non-ferrous metal futures and options contract tools enable us to implement strategic hedging (buying and selling) more flexibly, quickly and at low cost, thus helping enterprises to reduce costs and increase efficiency and form a virtuous circle.
In addition, with the support of continuous contracts of Shanghai Futures Exchange, the flexible application of pricing, position conversion and arbitrage trading has been widely used and developed in the import of copper concentrate raw materials, re-export products and trade transactions, and the value and potential of joint application of futures and spot, internal and external markets have been tapped from many angles.
At present, the domestic commodity market and import and export trade are growing rapidly, the international market share is expanding, and various fields are expanding by leaps and bounds. Both the output and consumption of copper and other non-ferrous metal industries are increasing periodically, and the volume of import and export trade continues to increase, constantly rewriting the proportional relationship in the global share.
Under the background of increasingly complex and changeable international economy and huge non-ferrous metal market in recent years, the full development and perfect system construction of Shanghai Futures Exchange have provided strong support and practical function for the real economy to prevent risks, resolve crises and seize opportunities.
It is firmly believed that with the opening of the prelude of internationalization of Shanghai Futures Exchange, the listing and maturity of international copper futures contracts and other international contract varieties will further open the space limitations of China's futures market in various industrial chains, enhance market guidance, break the inherent influence and position-fixing constraints of the international market, and help China's market guidance mechanism and price formation system move forward and open a new chapter under the new situation.
This article is from Futures Daily.