Alumina futures listing brings new market changes and new development opportunities
2023/6/16
Chalco International Trade Deputy General Manager Li Guangfei said in an interview with reporters, alumina futures will be listed with electrolytic aluminum futures to jointly serve the aluminum industry chain upstream and downstream enterprises, to further enhance the level of risk management of the aluminum industry chain. China is the world's largest producer and consumer of alumina, the industry scale is huge, many market players, frequent price fluctuations, enterprise management alumina price risk increased difficulty, the industry for alumina futures urgent demand. After the listing of alumina futures, alumina producers and traders can hedge the risk of price fluctuations of bauxite and alumina through futures, and electrolytic aluminum enterprises can lock in processing fees through alumina and electrolytic aluminum futures, thus stabilizing profits.
At the same time, he said, alumina futures listing will complement the existing market pricing model to achieve the important functional role of price discovery. According to his introduction, before 2010, alumina trade to the long list, and the long list pricing is basically based on electrolytic aluminum prices, the international market using LME aluminum prices of 14%-15%, the domestic market using Shanghai aluminum prices of 17%-18%. But this faces two problems, one is the long single proportional price and the market spot price may produce a disconnect, upstream and downstream enterprises are prone to disputes, is not conducive to production stability; Second, if the electrolytic aluminum price and alumina price deviation is too large, then the use of electrolytic aluminum futures for alumina hedging may produce losses.
After 2010, alumina pricing was marketized, with overseas pricing using the weighted average of Platts, MB and CRU offers. China turned to market-based pricing after 2014, the current mainstream market pricing model is Antaike, Baichuan and Aladdin's "three network average price", but also face the problem of fairness of the offer easily questioned. In his opinion, after the listing of alumina futures, it can provide a more transparent and fair market price trading mechanism for upstream and downstream enterprises in the industry chain, thus reducing pricing differences and effectively improving pricing efficiency, thus helping the industry to run smoothly and efficiently. Looking to the future, with the development and maturity of the alumina futures market, the use of alumina futures for trade pricing by industrial enterprises will become more and more common, and will effectively improve the status of Chinese alumina in the international market.
In addition, alumina futures delivery is also the focus of corporate attention. He said that, unlike the overseas launch of cash delivery of alumina contracts, alumina futures in the Shanghai Futures Institute in designated delivery warehouses and designated factory for physical delivery, which is very important for the domestic alumina industry, through physical delivery of market resources will be reconfigured, but also on the different regions of the supply and demand relations have an impact.
Especially in the plant delivery, follow the spot market to "the main origin ex-factory price" as the benchmark price of trade habits, is conducive to reduce the logistics costs of the entire industry chain, reduce the loss of goods during transportation, as well as to avoid prolonged storage caused by moisture and other quality problems, to improve the efficiency of delivery, optimize the delivery mechanism, innovative service model All of them will play a positive role.
In addition, from the perspective of the geographical location of the first delivery warehouses of alumina futures, mainly concentrated in Henan, Shandong, Henan-Lu area is the mainstream production area of alumina. At the same time there are Xinjiang and Lanzhou area, the two are the direct downstream of alumina - the mainstream production base of electrolytic aluminum plant. On the whole, Li Guangfei believes that the first batch of delivery warehouses and plant depots announced are more reasonable.
As one of the first delivery warehouses of alumina futures, the relevant person in charge of Chinalco Logistics said that the alumina delivery warehouse of Chinalco Logistics is located in the central dry port of Chinalco Logistics in Zhengzhou, Henan Province, with an approved storage capacity of 150,000 tons, which is the largest in the country. He believes that the establishment of the first delivery warehouse for alumina futures is conducive to Chinalco Logistics giving full play to the advantages of logistics hub, foreign trade and industrial base, fully driving the local trading of alumina spot in Zhengzhou, better serving alumina enterprises and users in Henan and even the central region, significantly reducing the operating costs of regional affiliated enterprises and further enhancing the influence of the non-ferrous metals trading platform.
At the same time, he said that alumina delivery business also adds a new business mode for Chinalco logistics, and with the help of futures trading to drive spot trading, it can effectively promote the gathering, storage, distribution and trading of aluminum ingots, alumina and other non-ferrous metals, and drive the development of various industries such as transportation industry and information industry, further enhance the function of logistics hub of collection and distribution, and form an industrial chain integrating business flow, logistics and information flow, which is important for it to build logistics It will further enhance the functions of the logistics hub and form an industry chain integrating business flow, logistics and information flow, which will play a significant role in promoting the branding of logistics, expanding business operations, improving revenue generation, enhancing market competitiveness and serving the high-quality development of the industry.
From the perspective of futures service industry, Ma Wensheng, chairman of Xinhu Futures, said that the listing of alumina futures has further enriched the industrial service "toolbox". The upcoming listing of alumina futures and has been listed electrolytic aluminum futures to form a vertical product system, futures companies can build a more complete aluminum industry service program, in-depth service aluminum industry chain risk management needs, to help the stable and efficient development of upstream and downstream enterprises in the industry chain.
"The listing of alumina futures also helps the development of various businesses of futures companies." Ma Wensheng added that the listing of alumina futures will drive futures companies to expand to the upstream of the aluminum industry chain and further enhance the precise service capacity of the industry chain. On the one hand, through the alumina and electrolytic aluminum basis difference research, volatility research, the formation of the corresponding product strategy, to better serve the individual risk management needs of enterprises, but also help the company's capital management business to form the relevant arbitrage strategy. On the other hand, through the deepening of the research on the basis difference of the whole aluminum market including alumina and electrolytic aluminum, it helps the subsidiary to deepen the service of the spot industry chain and form a new service mode by using two kinds of futures tools.
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