Why Zhengzhou Commodity Exchange PTA Futures ranked first for five consecutive years
“Purified” petroleum, “polyester”, as an important bulk textile raw material PTA (purified terephthalic acid) is in the polyester industry A key link in the transformation process of a chain from “a drop of oil” to “a thread”. In the futures variety function evaluation organized by the China Securities Regulatory Commission this year, Zhengzhou Commodity Exchange PTA futures once again ranked first among national chemical futures. This is the fifth consecutive year it has ranked first. As the world’s first product, why have PTA futures won the crown one after another? What help has it brought to the development of the industry?
“Polyester industry enterprises are deeply involved, futures prices have become the industry pricing benchmark, and the PTA spot market has been deeply integrated.” On September 15, the relevant person in charge of Zhengzhou Commercial Exchange concluded that as of 2021, in my country’s existing Among the 20 PTA manufacturing companies, 16 have participated in PTA futures trading, accounting for 94% of their total production capacity; at the same time, more than 400 trading companies actively use PTA futures to manage price risks.
Data witnesses development. As one of the largest futures varieties in the domestic market, PTA futures has a cumulative transaction volume of 550 million lots in 2021, accounting for 7.8% of the total market share, second only to rebar, with an average daily position of 2.62 million lots, equivalent to 13.1 million tons of spot goods, equivalent to National PTA three-month output.
In order to open up a new path for corporate financing, Zhengzhou Commodity Exchange has innovatively launched over-the-counter warehouse receipt trading business, allowing companies to apply for low-interest loans from banks using PTA warehouse receipts as pledge. As of the end of 2021, the financing amount of PTA futures warehouse receipts exceeded 6.5 billion yuan, and the average financing interest rate was more than 10% lower than traditional channels, which greatly alleviated the financing problems of enterprises in the industry chain.
“PTA futures are unique to my country and have effectively played a ‘closer’ role in helping the steady expansion of related domestic industries. From the launch of PTA futures in 2006 to the end of last year, PTA’s international production capacity increased by 2.8 times, while China’s production capacity increased 7.6 times, and the PTA self-sufficiency rate has increased from less than 50% to 100%.” Zhang Sixi, assistant to the president of Xinfengming Group Co., Ltd., said that because of the “stabilizer” of PTA futures, companies no longer worry too much about price fluctuations for raw materials. and finished products, focus more on business optimization, and dare to expand reproduction.
What is particularly eye-catching is that in November 2018, Zhengzhou Commercial Exchange promoted PTA to become a specific variety and officially opened to the outside world. PTA futures is Zhengzhou Commodity Exchange’s first international product, and it is also my country’s first export product open to the outside world. To this end, Zhengzhou Commodity Exchange has innovatively introduced export service providers and a warehouse receipt auction system to facilitate domestic and foreign industrial enterprises to carry out export trade business. After three years of opening up to the outside world, about 400 overseas customers from 20 countries and regions around the world, including Singapore, the United Kingdom, New Zealand, and South Korea, have opened accounts. The proportion of overseas customers’ transactions and positions are both above 5%.
The delivery warehouse is an important link in the delivery of commodity futures, especially during the period of mismatch between upstream and downstream supply and demand, which can effectively alleviate the contradiction between supply and demand. In 2020, in response to the cyclical characteristics of PTA futures warehouse receipts and to avoid large fluctuations in delivery warehouse capacity demand that would affect delivery warehouse operations, ZCE launched a temporary inventory point flexibility model in a timely manner and successively set up 6 temporary warehouses in 4 PTA delivery warehouses. At the inventory point, the cumulative expansion of storage capacity is 360,000 tons, accounting for 20% of the futures warehouse receipt volume at the end of the year.
“When the storage capacity is insufficient, the delivery warehouse can quickly integrate surrounding warehousing resources and expand the scale of storage capacity. Otherwise, the lease can be returned to reduce operating losses.” Tu Quandong, general manager of the futures logistics department of Cianfa Logistics Group Co., Ltd., said that the temporary inventory of Zhengzhou Commodity Exchange The point elasticity model has fast approval speed and can meet the needs of industrial customers in a timely manner. It also increases the enthusiasm of warehousing companies to participate in PTA delivery warehouse services.
It is understood that in the next step, Zhengzhou Commodity Exchange will increase the research and development of upstream and downstream futures products of PTA, enrich the financial hedging tools for industrial chain enterprises, and at the same time further optimize the system and rules and procedures, continue to carry out industrial services and market cultivation, and support Enterprises use futures tools to stabilize production and operations and help ensure supply and price stability.
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