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Sina Finance News Coking coal futures will be held in Dalian Commodity Exchange on March 22 [Weibo] Officially listed for trading, Sina Finance invited experts such as Dalian Commodity Exchange's coking coal contract design team to conduct guest interviews to explain relevant issues of coking coal futures listing in detail for investors. The following is a transcript of the guest interviews:

Host Qiao Ni: Hello, dear Sina netizens. I'm the host Qiao Ni of Sina Finance. Welcome to the chat room of Sina guests.

Today we have invited several guests to sit beside me. This is Mr. Zhao Yusheng, the manager of the Industrial Products Business Department of Dalian Commodity Exchange. Welcome to Mr. Zhao and say hello to netizens.

Zhao Yusheng: Hello, everyone. I'm Zhao Yusheng from the Industrial Products Division of Dashang. Thank you!

Host Qiao Ni: Thank you, Mr. Zhao. The second one is Ms. Liu Bao, general manager of China Coal Resources Network. Welcome.

Liu Bao: Hello, netizens. I'm Liu Bao, the general manager of China Coal Resources Network.

Joni: Thank you for coming. The third one is Mr. Xu Yuanrong, a researcher from Guotou Zhonggu Futures Company. Welcome to our company.

Xu Yuanrong: Hello, everyone. My name is Xu Yuanrong. I'm glad to meet my friends.

Host Qiao Ni: In fact, as you are sitting here today, the key point is to talk about the listing of coking coal futures with us.

Before, we also knew that there were coke futures, and many futures have been listed. Now a new variety is about to be listed. What's the meaning of it? First of all, please ask Mr. Zhao to analyze it for us.

Zhao Yusheng: First of all, I would like to thank Sina, and then I would like to thank the friends in the market who pay attention to the coking coal varieties to be listed. It should be said that coking coal is very important to the national economy, and is an important basic raw material in the coking industry and the steel industry. At the same time, there are many enterprises in this industrial chain, and the industrial chain is very long. In recent years, especially after the financial crisis in 2008, the price of coking coal has been changing more and more violently and more frequently. Therefore, companies in the coking industry, including the steel industry, have a strong demand for hedging, as well as a strong demand for investment in the market. Therefore, Dalian Commodity Exchange launched coking coal futures, which should be said to play a very good role in improving the coking industry, including the steel industry variety sequence. At the same time, investors can also use steel futures, including coke futures, and coking coal enterprises to form a relatively closed hedging chain. In this way, it is more convenient for enterprises to operate and avoid the risk of enterprise operation. At the same time, it should be said that the listing of coking coal futures is also more conducive to the pricing of coking coal in the future, including improving the influence of domestic coking coal, and is also conducive to the advancement of coal marketization. At the same time, as a large state-owned mine, we can take advantage of our own scale advantage, talent reserve advantage, use coking coal futures to become bigger and stronger, which can play a very positive role in the stable development of the entire coal industry, the steel industry and their stable development.

Jonny: It has many advantages. You just mentioned two keywords, one is coking industry, the other is steel industry, which has a greater role in promoting these two industries. Can you give us a detailed analysis?

Zhao Yusheng: We know that the reason why it is called coking coal is to make coke. It is an important material for making coke. Coke is also an important metallurgical raw material for the steel industry. Therefore, it is upstream in the entire industry chain. Therefore, the introduction of coking coal futures is more convenient for investors to use after the introduction of steel futures and coke futures.

Host Qiao Ni: What do you think, Ms. Liu?

Liu Bao: China is the largest consumer and producer of coking coal in the world. The output of coking coal has also grown steadily in the past two years. Last year, the overall output of raw coal should reach more than 1.2 billion tons. At this level, we use more than 600 million tons of clean coal for coking. On the whole, the circulation of spot goods is very large. In addition to some coal mining enterprises, some coal producing enterprises have coking plants, and coking coal is produced and sold for consumption. A few steel mills have their own coal mines. In addition, other coking coal shall be circulated in the spot market. China's major coal producing provinces, the main coking coal producing areas are mainly concentrated in the north, including Shanxi, Inner Mongolia, Xinjiang, Henan, Hebei, Shandong, Yunnan, Sichuan and Guizhou. It should be noted that the coking coal producing areas are far away from the consumer areas. There is a problem of transporting coal from the north to the south in the main steel producing areas, as well as Qingdao Port Tianjin Port 、 Rizhao Port The current situation of spot circulation of coking coal is also quite active. In addition, China's economic growth is relatively fast now. In recent years, the demand of steel for coking coal has been driven year by year. It should be said that since 2006, the price of coking coal has basically fluctuated violently. Before 2006, the price of coking coal and clean coal was more than 700 yuan. In previous years, there was basically no big fluctuation in coking coal, which was relatively stable. After the financial crisis in 2008, the price of coking coal fell sharply again, that is, from 2006 to 2008, the price increased significantly. At the peak of 2008, the spot price of coking coal once reached 2400. The mainstream price of the dominant variety of Shanxi Coking Coal Group was more than 1800, more than three times more than that of 2006. After 2008, due to the impact of the international financial situation and the pressure on the steel industry, the price of coking coal in the whole world fell sharply. In less than half a year, the overall level dropped to below 1000, or even 800-900.

Therefore, in terms of the severity of price fluctuation, the price fluctuation of coking coal poses a huge risk to the operation of both producers and purchasers, as well as our downstream direct users. How to avoid this risk? In fact, the coking coal futures we talked about today are finally listed and traded. In fact, I think this topic should be a hot topic in the industry in the near future. The coal market in 2012 also experienced ups and downs. The price trend in March at the beginning of the year was relatively stable. However, after March, the slack season entered, and the overall price went in a big V shape. By September, the price fell by 400 yuan. Many coking coal enterprises, including a large number of coal traders, can also be said to be discouraged. They have lost countless money on coking coal trade. Many enterprises are on the verge of bankruptcy because their prices are close to the production cost line, and some small coal mines have stopped production.

After such a process, the next few months are still good, but also picked up part of the range will rise again to 150 or even 200 yuan. It can be seen that every rise and fall brings huge risks to the market.

We think that in such a situation, we can actually use the current coking coal futures, and enterprises can hedge, so as to avoid the risk of both purchase and sales.

Today can be said to be a very happy thing in the industry. It's also a great pleasure to communicate with you online friends and friends in the enterprise.

Host Qiao Ni: Mr. Liu analyzed the necessity of coking coal futures from the current situation of the whole market. Mr. Xu, as a researcher, what do you think is the significance of coking coal futures after they are listed?

Xu Yuanrong: I am a staff member of the futures company. My perspective is slightly different from the two. From the perspective of the futures company, because one of our company's important purposes and functions is to serve industrial customers. In the past, our company agriculture products There are many industrial customers, and various futures instruments for agricultural products have become very important ways and tools for us to serve industrial customers. Later, our company transformed into the field of metal chemical industry and expanded its service target to these two fields. Now with the launch of coking coal futures, it has provided us with a new opportunity and field to serve industrial customers. The coal sector of our parent company, SDIC Group, is a very important business area. In the past, before there was no such kind of futures, there was no corresponding tool for the fluctuation risk of coal price in the past. Now, once the coking coal futures are launched, it is really good. A very good cooperation mechanism can be quickly established between our futures company and the coal sector of the parent company group. In the future, there will be better management tools for the price risk of coal.

Jonny, the host: So it is also a tool to improve the whole market, and people have a way to participate in it.

Just now, after listening to the three speakers, we also understand the importance of the listing of coking coal futures. Just now, Ms. Liu also mentioned that the main coking coal production areas are concentrated in the north, but there are also some production areas in the south, such as Guizhou and Sichuan. Therefore, there are still some limitations in the delivery process for hedging enterprises in North China, We also want to ask Mr. Zhao, how does Dashang consider the delivery place?

Zhao Yusheng: You have just mentioned different regions. The general rule of coal flow in our country is from west to east, and another is from north to south. At the same time, it is also the main coal logistics region from the west to the east in central and eastern China. As you said, Cloud and Gui are just a local market. But why do you say that? We actually have data support. According to the data in 2012, the total output of coke required by enterprises in the downstream of coal and coke is about 443 million tons nationwide, and Shanxi, Hebei and Shandong provinces account for about 43%. A little to the east of North China. At the same time, these regions are also the places where our domestic steel industry gathers, and their share of steel is almost 40%, that is, pig iron steelmaking. Therefore, downstream of coking coal is the main area for use. At the same time, in the coking coal production area, Shanxi is the largest coking coal production province in China. When Hebei, Inner Mongolia and Jiangsu are included, the output can be more than half.

Liu Bao: Shanxi's coking coal output accounts for 52% of the national output.

Host Qiao Ni: We know Shanxi is a big coal producing province.

Zhao Yusheng: Judging from the upstream and downstream links, Shanxi, Hebei and Shandong should be the main regions for trade, including consumption. Therefore, because the futures market needs a clear directionality to form prices, we mainly consider the trade characteristics in this region and the needs of enterprises. We set up the delivery warehouse here, including the delivery location. However, since the price relevance of coking coal in various places is relatively high, for these enterprises outside the region, it can still avoid the business risk of enterprises by using the price relevance and hedging.

Host Qiao Ni: So there are still many ways to solve regional problems.

Zhao Yusheng: Yes.

Host Qiao Ni: We know what is the principle for selecting the benchmark delivery place of coking coal? How about the regional premium and discount with non benchmark delivery place?

Zhao Yusheng: Let me answer your last question first. In the delivery warehouse, there is no quality premium, only benchmark delivery place and non benchmark delivery place. This design has three principles. The first principle is trade settlement place, and the trade volume must be large. Second, the logistics facilities and equipment must be perfect, and the delivery warehouse location must have perfect logistics. At the same time, the price of different delivery warehouses and delivery locations must be highly correlated. If they cannot form their own systems, prices will often be disordered. Based on these three principles, we chose the main delivery area I just mentioned. We chose five major ports around the Bohai Sea, namely Jingtang Port, Tianjin Port, Rizhao Port Lianyungang Qinhuangdao Port. This is an important port in the north, and also the main logistics node of coking coal. At the same time, there are two delivery factories and warehouses in Shanxi. It is also an important supplement to the benchmark delivery place, which should comprehensively reflect the main line of domestic production, trade, logistics and demand.

Host Qiao Ni: We know that there are still some risks in futures. How to control the risks?

Zhao Yusheng: From the perspective of risk, investors need to start with the rules and understand them in detail. Another investment experience of other varieties can also be used for reference, especially coke, which has been listed for two years. Since last year, its market attention has also been increasing. In the area of investor risk, Mr. Xu of futures companies may have more say and control this area.

Jonny, the host: Let's ask President Xu. Now that we are talking about this, let's talk about the risks of coking coal futures? Can ordinary people participate?

Xu Yuanrong: There is no problem for everyone to participate, but we should pay attention to several key points when participating individually.

First, especially the individual participants, we must study in detail the rules of coking coal futures contracts, as well as the trading system and delivery system. For example, coking coal has its own unique aspects. For example, coking coal is easy to deteriorate. In addition, the registered warehouse receipt of coking coal must be cancelled in the same month, which is unique to it. If individual traders are not familiar with these, they may make mistakes in decision-making.

Host Qiao Ni: First understand the rules.

Xu Yuanrong: These rules especially affect those who prefer cross month arbitrage.

Second, as an individual, we must fully understand the price linkage relationship among coking coal, coke and deformed steel bars, which is very important for price judgment and market analysis. Generally speaking, the rebar price moves first, then the coking coal price follows, and finally the coking coal price follows, with a lag of two or three weeks. This is also very important.

Third, when participating in coking coal futures, individual participants must pay attention to the grasp of the macro situation at home and abroad. It is not enough to just say that I understand the basic factors of coke supply and demand, or see some technical forms. In the last four or five years, basically all the trends of bulk commodities have been impacted by domestic and foreign macro factors. We suggest that you consider the four aspects of macro, supply and demand, technology and capital, so as to avoid bias in decision-making.

Host Jonny: You just mentioned that there is an internal relationship between coking coal, coke and rebar, which may change in two or three weeks. How can enterprises use such a time to conduct hedging or arbitrage operations?

Xu Yuanrong: The hedging and arbitrage of enterprises is a big problem. The introduction of coking coal futures has led to a large number of schemes that can be combined for arbitrage or hedging among the three varieties of coking coal, coke and deformed steel, which is very similar to the original soybean, soybean oil and soybean meal that we do agricultural products. The methods are slightly different for different industry subjects. In terms of hedging, for example, if the cost of the upstream coking coal enterprise is basically fixed, the profit of the enterprise is mainly affected and determined by the fluctuation of coking coal price. For it, if the expected future coking coal price trend is not good, the future situation is not good, it is very important for it to sell hedging, If done well, it may help him get through a very difficult stage. But for downstream steel plants or coking plants, they mainly purchase coking coal, for which it is very important to control the purchase cost of coking coal. This requires it to judge that the price is at a relatively low and moderate position, and to buy it decisively for hedging, so as to avoid that the price of coking coal will rise too much in the future, leading to cost out of control. For some traders, it is worth mentioning that there are many traders in the coking coal industry. The operation is more complex and challenging for traders who buy and sell. We think that simply speaking, when the traders' inventory is low and the expected future price rises again, this is a very good time for buying and discussing for hedging. On the contrary, if the current inventory is high and the future price is not expected to be very good, the decisive selling hedging is an important way to determine whether it can avoid some relatively large risks in the future.

Host Qiao Ni: So after listening to your introduction, if we want to operate coking coal futures, we should have a good understanding of the current situation of coking coal futures. We asked Mr. Liu to analyze the current spot circulation scale of coking coal futures and how about the up and down industrial chain?

Liu Bao: As I mentioned just now, China is the world's largest coal producer and consumer. According to our statistics, the output of coke in 2012 should be 430 million tons. If the coal blending ratio is 1.4, the consumption of clean coal should be 640 million tons. Of the 640 million tons of consumption, there should be some production that is consumed by the steel plant itself, not listed and not in stock. Another part is the existing coking plant of the coal mine itself. There are coking plants of the coal mine, not independent coking plants. There are upstream coal mines. This part of coal does not participate in the spot circulation. The spot circulation should be about 500 million tons. This also includes 53.55 million tons, which is the import volume of coking coal in 2012.

Host Jonny: How much will it take?

Liu Bao: It accounts for 8% of the total coking coal consumption, and the output can account for about 7% of the clean coal output. Although the weight and weight are not very large, more than 90% of them are mainly domestic coal. However, because of its high degree of marketization, the direct CIF price includes several delivery port warehouses of Dashang Stock Exchange. The largest port of coking coal is Jingtang Port, as well as Qingdao Port, Fangcheng Port and Dandong Port. There are a large number of coking coal imports. Because the degree of direct participation in the market is particularly large, the spot price of the port is used to transmit the price of our origin and directly affect the domestic coking coal price.

Jonny, the host: Although the proportion is not too large, the impact is still very large.

Liu Bao: Yes. In the current situation of China, in fact, the reserves of coking coal, including the output, are not a problem. For our growing demand for coking coal, the contradiction between supply and demand is not beyond our ability to solve, and our own coking coal is also completely sufficient. However, there is some imbalance in the proportion of coking coal varieties in China. For example, the demand for two kinds of coal traded and listed on the stock exchange has always been tight demand and tight balance. If the inflation factor is too large or the output of steel rises sharply in the short term, the demand for coking coal will cause problems in the supply in the short term. At this time, imported coal plays an important role in making up for the shortage. Therefore, its price has directly affected the price of our domestic enterprises. In terms of cost, foreign coking coal includes Australian coking coal and Mongolian coking coal. After their production costs arrive in China, the current market price is basically on a par with the price of domestic coal, and the price advantage is not lower than that of domestic coal. Therefore, when customers choose coal, it is possible that customers of steel mills are also willing to choose to cooperate directly with some large international coking coal producers. Such a form of cooperation, including China's current policy on coal import is relaxed, and the threshold is very low, which means that we have zero tariff. In this way, enterprises are encouraged to import a large number of our scarce varieties. Mongolian coal, including Australian coal, including coal from the United States, Canada, and even some Indonesian coal, will flow into China. Russian land transport, Mongolian coal, from several ports in Baotou, Xinjiang has one port, and Baotou has three ports, flowing into China. Moreover, the price of coal directly consumed in Beijing Tianjin Tangshan area is better than that of our own domestic coal, which is transported from Shanxi to here. In recent years, in different periods of time, the price of coal from the origin to the port is inverted, which is lower than the price of imported coal. In this way, the choice of customers also has a lot of impact on the price fluctuation of this market. The situation we are talking about is also the current spot coking coal price in Jingtang Port, which is also in a relatively weak trading situation, and it is also the time to enter the slack season. Therefore, the trend of coking coal price decline has appeared, with a price adjustment of 30-50 yuan.

Host Qiao Ni: You just mentioned that the price of imported coal affects the price of coking coal in China more. In addition to this, what other factors affect the price of coking coal in China? Or what fluctuations?

Liu Bao: I just talked about the impact of imported coal on China's spot price. This factor is just one of them. In fact, there are more factors. Just now, researcher Xu from the futures company also talked about this problem. The trend of steel output is the same as that of macro factors. If the demand for coking coal increases, the steel output will increase and the steel price will rise, which will directly drive the demand for coking coal. The demand for coking coal has increased. When the coal mining enterprises here supply coal, the coal is not enough to sell, the supply of coal is tight, and there are more people pulling coal, the price will naturally be adjusted. If the procurement is relatively weak and loose, there are fewer people buying coal, and the price of steel has fallen, the steel mill will reduce the cost and reduce the inventory. When the inventory is reduced, no one is very active in trading. At this time, the coal enterprise should consider that the price will be reduced. The usual price leverage I just mentioned is the problem of supply and demand. Another important problem is the factor of coal price, the most important one is the production capacity of China's coal. In fact, in recent years, due to the relatively large fluctuation of coal price before 2012, in some cases, the price of coal is soaring, not just coking coal, but the price of all kinds of coal is soaring. The drive of interests has led coal enterprises to occupy large areas of land, invest and put coal mines into production, so that the overall capacity is also oversupply. At present, supply is oversupply.

There are still some production capacities, some of which have not been fully released, including the situation in Shanxi. Shanxi has carried out relatively large coal mine capacity integration in 2009 and 2010. Now, some of the production capacities of some coal mines under the eight major groups have not been fully released, and if the price rises soon, these production capacities will also be gradually released, The rising prices have also been greatly suppressed. Judging from this situation, the price of coking coal this year should be considered to be relatively risky, and it should also be noted that there is a possibility of decline.

Host Qiao Ni: Therefore, the listing of coking coal futures at this time may put a lot of pressure on many investors, because I just heard from Ms. Liu that the price of coking coal has been declining in recent years. Mr. Zhao, after the listing of coking coal futures, what are the arbitrage relationships among steel, steel and coke?

Zhao Yusheng: When arbitrage may finally take place, the decision must be made by investors. But I want to introduce the proportion of upstream and downstream production, as President Liu said just now. About 1.3:1 from coking coal to coke, and 2:1 from coke to steel. Through simple conversion of this relationship, investors should be able to find this balance point. At the same time, our listed coking coal is the main coking coal. If a part of fat coal is included in the coking process, it may account for 40-50% of the coal blending ratio. When this relationship is multiplied, about one ton of coal will be produced, and coking coal will be required at a ratio of 1:1.6. Of course, other coal blending is also required. Speaking of this, I want to say a word by the way. Just now, when we talked about investor arbitrage and hedging, there is one thing. At present, our coke on the market is based on the standard of quasi first grade coke, but because we want to target the mainstream users of the market, the quality of coke is oriented to the lowest use quality. If this coking coal is used as coke, some measures may be taken to deal with the arbitrage relationship between secondary coke and quasi primary coke, between coke pushed by coking coal, or between coke and coking coal.

Host Qiao Ni: Today, we have been talking about the comparison between coking coal and coke. We also want to ask Mr. Xu, how unique do you think coking coal futures are compared with coke futures? Give us a detailed analysis of these two futures?

Xu Yuanrong: The most obvious uniqueness is that the investment value of coking coal is different from that of coke. Because we say that the contract is listed, the futures company attaches great importance to introducing its investment value to our customers. We think that for coking coal, it is very important that it is impacted by more factors than coke. When the price deviates far from the reasonable level, there is an opportunity to correct the deviation or to conduct transactions, which is a very important manifestation of its investment value.

Jonny, the host: The risks are great, but the opportunities are also great.

Xu Yuanrong: Yes, from the supply side, although the mining cost is relatively stable, it is vulnerable to the impact of national industrial policy rectification, environmental protection policies, and production safety. Ms. Liu mentioned that some imported foreign supplies, which account for 10% of domestic output, are vulnerable to the impact of external markets.

In addition, coking coal is one of the most upstream varieties, and changes in the demand of the whole downstream industry chain will have an impact on it. Especially now, China's economic growth is at a very complex stage, such as the regulation of real estate, such as the five national policies, which are very powerful policies. To sum up, coking coal has a large scale of production and marketing, and its price fluctuates significantly. In addition, foreign and domestic shocks coexist, and hedging demand is strong. So we are very optimistic about this variety.

Zhao Yusheng: I also want to emphasize that our coking coal should be said to be the first raw mineral product in the domestic futures market. It belongs to the upstream resource category and is closer to the resource category. President Liu also said that our country is a big producer and consumer of coal. In fact, coal is a very valuable resource. Therefore, how can its price be reflected, especially coking coal, which is very valuable and targeted. This area should also be a focus of our investors, that is, its resourcefulness.

Host Qiao Ni: We can see that investors can pay more attention to coking coal futures. Also want to ask Mr. Xu, we know that new varieties are listed, and maybe futures companies will also launch some of their own services. What new services will be available to serve enterprises and consumers?

Xu Yuanrong: The listing of coking coal futures is very exciting news for our futures company. The leadership of our company attaches great importance to it, which is a new business growth point for us. The leadership has deployed publicity, introduction and participation in coking coal futures from several aspects.

First, in terms of our internal research team, our research team and research team were weak in energy. Now we take this opportunity to comprehensively strengthen the research on energy and coking coal, and put coking coal, coke and rebar into a large group. At the same time, these researchers also drive our salesmen and salesmen to expand and optimize their knowledge structure. We carry out internal training, and the salesmen will have new knowledge points in the future.

Second, we will continue to promote and guide industrial customers to familiarize them and participate in them. Because our company is different from other futures companies, institutional customers account for more than 90%. Therefore, serving institutional customers is one of our main functions. Just taking this opportunity, our company is now preparing to increase efforts to promote and introduce coking coal to industrial customers. It is reasonable to say that all enterprises related to bulk commodities should participate in the futures market to avoid risks, which is theoretically true. However, the proportion of actual participation is relatively small, because many people are not familiar with the futures risk management tools, or feel that the risks are large and difficult to control. This is just the function of futures companies to make everyone familiar with it, understand it, know how to control it, and let everyone participate.

Host Qiao Ni: We see that almost every aspect is ready to look forward to the listing of coking coal futures. Time is limited today, and I would like to thank the three guests for sharing with us the current situation of coking coal futures and what should be paid attention to when listing. Here we also wish coking coal futures can be successfully listed, and hope it can be as active as coking coal futures. Thanks again to the three guests, thanks for the participation of netizens, and thanks to Yiming Modeling. See you next time!