New risk management tools are coming to the domestic aluminum industry
2023/6/7
Cheng Xiaoyong, deputy general manager of Guangzhou Golden Control Futures Research Center, believes that the listing and trading of alumina futures will have a positive impact on the aluminum industry in three aspects: First, it is conducive to the formation of the alumina spot market "open, fair and just" price system, more say in the international pricing power of alumina, and improve China's price influence in the international Alumina market in the price influence. Second, to further enrich the risk management tools of aluminum smelting enterprises, alumina futures can help enterprises to more accurately manage price risk, stabilize the production and operation of enterprises, alumina as the main raw material for aluminum electrolysis, its price is affected by macroeconomic and supply and demand and other multiple factors, alumina futures listing will be conducive to the formation of upstream raw materials risk management closed loop. Third, it is conducive to guiding the optimal layout of domestic alumina production capacity, providing security for the resource reserves of China's aluminum industry. "China is a large importer of alumina and bauxite, the two imports have a seesaw effect, alumina futures after the listing is conducive to domestic alumina production capacity suitable for the national green low-carbon strategy, and the healthy development of the electrolytic aluminum industry to match the development of green aluminum industry." He said.
Xia Yingying introduced, alumina is the main raw material for the upstream of electrolytic aluminum, the launch of alumina futures, will provide more and more comprehensive options for risk management of aluminum industry chain enterprises. "Carbon neutral is China's long-term adherence and efforts to achieve the goal, the aluminum industry chain as a high energy-consuming industries, vulnerable to exogenous factors, the urgent need for the futures market to play a role in price discovery, to help enterprises to use derivative instruments to smooth out the impact of price fluctuations on production and operation, to achieve healthy and sustainable development of the industry." She said, in addition, China as the world's largest producer and consumer of alumina, the lack of discourse in international trade, the launch of alumina futures will also improve the pricing system of China's alumina trade, helping China to enhance pricing power and influence in the global market.
China's alumina industry is huge, following the steel industry and another billion tons of production capacity of the industry. Jiang Xinbin said, in recent years, alumina prices by macro, cost and other factors price fluctuations frequently, in addition, alumina and electrolytic aluminum both price trends gradually cleavage, which increased the alumina plant's operating risks and the difficulty of risk management. Alumina enterprises urgently need to use alumina futures for risk management.
He believes that the launch of alumina futures is not only beneficial for alumina enterprises to use futures instruments for hedging to hedge the risk exposure faced by the spot position, but also to optimize the pricing mechanism of alumina spot trade and improve the pricing efficiency of the aluminum industry. In addition, as the world's first physical delivery of alumina futures, its listing will improve China's alumina enterprises in the global pricing power and influence, and promote the healthy development of the global alumina industry.
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