The depth of participation of companies in the glass industry chain has increased significantly


Over the past ten years, the glass futures trading rules have been continuously optimized, there are more and more market participants, and the depth of participation of related companies in the industrial chain has also been significantly enhanced.

According to the reporter of "China Building Materials News", in the glass industry chain, companies often hedge their value through the models of selling hedging, buying hedging and basis trade.From being unfamiliar with the futures market in the early days, to now proficient in the use of futures tools for hedging, warehouse order trading, period cash out, etc., both glass manufacturers and traders can protect the value of their products in the futures market, reducing the risk of depreciation during production or sales.

Especially for manufacturers of original glass films, when they predict that the spot market is not good, they can hedge the risks caused by the depreciation of the spot by using glass futures tools to smooth corporate profits; in addition, they can also help downstream glass deep-processing companies reduce the purchase cost of original films through the period-to-period cash-out business.

In August 2020, after the epidemic eased, the resumption of work and production in various industries accelerated, and the completion of real estate projects led to a rapid increase in glass prices. The FG2009 contract rose from 1,200 yuan/ton to 1,950 yuan/ton.A glass production enterprise expects that the futures price may be pulled back due to the dumping of goods by traders in the later stage. It chose to establish a 10,000-ton sell hedging position starting at 1950 yuan/ton, and at the same time signed a 10,000-ton factory warehouse order agreement with the trader at the intraday price.

At the end of August of that year, the spot price of glass was 1900 yuan/ton, the futures price was adjusted back to 1800 yuan/ton, and the spot price of Agios was 100 yuan/ton. At this time, the company closed its hedging position and repurchased the factory warehouse order at a price below 1950 yuan/ton.The company optimizes spot sales profits through selling hedging and position order transactions.

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