PTA Option Listing Application Approved! Construction Of Polyester Industry Chain Multi Risk Avoidance System

A few days ago, the Zhengzhou commodity exchange (hereinafter referred to as the "Zheng Shang") application for listing PTA options has been approved by the China Securities Regulatory Commission, and the PTA option contract will be officially launched in December 16th. PTA option will become the first batch of energy chemical options in China with methanol option.


A polyester market personage said: "options are not the icing on the cake, but keep pace with futures. Call option is equivalent to buying insurance, premium is called royalty, and protection price is called exercise price. At present, with the large-scale private enterprises entering the refining and chemical projects and further promoting the integrated development, the market competition is becoming more and more intense. Polyester industry chain enterprises need to learn better financial knowledge, grasp more financial instruments, and better escort the operation of enterprises and industries.


At the same time, with the confirmation of the date of listing of PTA options, it also marks a solid step forward on the path of balanced development of futures and options. The matching level of major futures options will be significantly improved, and the way and mode of service related industries will be more three-dimensional and diversified.


From the perspective of the futures chain of the whole textile industry chain, PTA will have a series of combination tools such as cotton futures, cotton options, cotton yarn futures, PTA futures and PTA options. In the future, if the polyester bottle and polyester staple futures can be successfully launched, the broader financial instruments of the textile industry chain will play a stronger "plate effect".


The "strong fundamentals" of spot and futures markets are the strongest support.


According to the relevant person in charge of Zhengshang, PTA has a good stock base and high maturity, and the futures market runs smoothly and functions effectively.


China's chemical fiber industry is a competitive new industry in the world. Polyester fiber is the top priority of the chemical fiber industry as the "boss" of chemical fiber varieties. PTA is the most important raw material for the production of polyester products. It is one of the basic raw materials of the textile industry. More than 95% of the world's PTA is used for the production of polyester products.


At present, China's PTA industry has global competitive advantages, and is at the leading level in terms of technology, equipment, product quality and overall scale. China is the largest producer and consumer of PTA in the world. It is also the largest producer and consumer of polyester products in the world. In 2018, China's PTA effective capacity reached 45 million 790 thousand tons, the output was 40 million 800 thousand tons, and the self-sufficiency rate reached 99.8%. The industry formed Yisheng petrochemical, Hengli petrochemical, and Jiaxing petrochemical and other large leading companies under the Tong Kun group.


Among them, Yisheng and Hengyi jointly invested Yisheng Petrochemical's PTA production capacity of 13 million 500 thousand tons, while new projects with annual capacity of 6 million tons are under construction. It is estimated that the PTA capacity of Yisheng Petrochemical Company will move towards 20 million tons after the new project is completed and put into operation. Hengli Petrochemical's current PTA capacity is 6 million 600 thousand tons (actual capacity is about 7 million tons), and new projects are being built in Changxing Island, Dalian. The PTA production capacity of the Tong Kun group is about 4 million 200 thousand tons, and it will also build a new PTA project with an annual output of 5 million tons in Nantong, Jiangsu.


At the same time, the two largest shareholders of Tong Kun group, Hengli Group and Yisheng Petrochemical are Rongsheng group and Hengyi group, which are large polyester production enterprises. They are leading enterprises of polyester filament.


In 2006, PTA futures traded on Zhengshang. The initial stage of PTA futures listing is the period when China's private enterprises began to enter the PTA industry. At this stage, the supply of PTA industry in China has increased year by year, but the import volume of products is still large. Since 2011, the capacity of China's PTA industry has increased rapidly, and has gradually entered the stage of relative surplus production capacity, and the industry competition is becoming more and more intense. Especially after 2015, the PTA industry has entered the integration stage. In 2016, China's PTA was transferred to the net export stage. At present, the PTA industry has entered a new round of expansion.


Along the way, with the continuous changes in the supply and demand structure of the spot market, especially with the spot market entering the structural surplus and integration stage, polyester industry chain enterprises are increasingly aware of the value of futures tools.


Correspondingly, the maturity of PTA futures is improving, and its functions are effective, and gradually grow into the market "Star" and "fist" varieties.


At present, 90% of PTA production enterprises, trading enterprises and 80% polyester enterprises in China are using PTA futures to avoid risks. Especially in recent years, the ability of PTA futures market to serve the entity industry has been continuously enhanced. In the domestic futures variety function evaluation, PTA futures are stable in the top 5, and are the best chemical products with the best function. In the first half of 2019, PTA futures ranked first among industrial products in Zhengshang futures.


PTA futures is also our country's unique futures variety, or the first chemical product in the whole market. The core position of China's polyester industry and PTA industry in the global market, as well as the effective implementation of the value of PTA futures tools, has made the global aromatics industry chain practitioners pay close attention to China PTA futures in recent years. In November 30, 2018, PTA futures successfully introduced overseas traders, and the international representation of futures prices increased further.


A polyester industry insider issued such a feeling: "in those days, when PTA futures just launched, many enterprises did not understand or even conflict at the beginning, but in recent years, with the continuous change of supply and demand pattern of industry, PTA futures have become a financial tool that polyester enterprises and industries cannot do without. It can be said that now I watch the night plate every night. I still look at the plate at the beginning of the morning, and look at the unit in the morning. Futures prices have deeply affected everyone's nerves and emotions.


Construction of polyester industry chain multi risk avoidance system


The downstream of PTA connects polyester industry, while its upstream connection is PX, and the upper part of PX connects with crude oil.


It is noteworthy that in recent years, with the support of private enterprises in the field of refining and chemical industry, many large private chemical fiber enterprises in China continue to promote the "-PX-PTA- polyester chemical fiber" integrated development. Since the beginning of this year, as a number of large-scale private PX projects have been put into operation, the pattern of market operation is changing. Our private chemical fiber enterprises are more closely related to crude oil terminals.


From the perspective of market operation, the price fluctuation of PTA and other products has increased since last year due to changes in crude oil price and exchange rate, international trade friction and industrial chain structure. This has brought more uncertainty and complexity to the production and operation of entities.


An option is a contract that gives the holder the right to purchase or sell an asset at a fixed price at any time before a particular date or any day before that. It is a basic risk management tool. The characteristics and advantages of options include: avoiding risks, taking into account revenue; without catching up with pressure; holding a diversified "insurance price" and personalized combination strategy.


"Futures contracts are worthless, requiring only performance bonds, and options need to be paid for rights." The industry insiders said.


A polyester industry insider pointed out that at present, the fluctuation of crude oil price and the competition pressure of textile trade intensifies. The PTA industry undertaking upstream and downstream faces greater risks and challenges. Developing PTA option trading will establish a multi-level hedging system for the polyester industry chain. It will help to better serve the stable operation of enterprises, enhance competitiveness and enhance investment confidence, thereby promoting the high quality development of the industry.


The industry also said: "at present, China's large-scale polyester leading enterprises have entered a new round of expansion. Many large PTA devices in China have been centralized, and many enterprises are building new PTA projects. Obviously, there are new changes in the supply and demand pattern of China's PTA market, and there are new changes in the trading pattern. In this context, polyester industry chain enterprises need to learn better financial knowledge, grasp more financial instruments, and better escort the operation of entities and industries.


PTA, general manager of the options Services Department of Hangzhou heat union group, said that after the listing of the options, it can provide an authoritative pricing basis for the OTC options and an efficient and convenient hedging way, so as to achieve the coordinated development of the on-site and OTC options markets.


Haitong futures option manager Wang Yang pointed out that from the operation of white sugar, cotton futures and options market, when the underlying market price fluctuated sharply, options could stabilize investors' trading mentality, reduce the irrational trading behavior of investors, and promote the stable operation of the underlying market. Therefore, developing more options trading is conducive to further enhancing the resilience of the futures market and improving the quality of the market operation.


PTA options are ready to go public.


Compared with cotton option, PTA option contract will have three distinct individualized designs.


First, the number of PTA option exercise price contracts is consistent with cotton options. According to the characteristics of PTA futures price fluctuation, the first day of PTA option will be hung out of 13 call options and 13 put options respectively, so as to ensure that the futures price fluctuation range of the next day mark is covered. With the change of PTA futures price, if the real value or virtual value PTA number is less than 6, Zheng will increase the new option price corresponding to the exercise price, so as to meet the needs of investment and transaction in time.


The two is the PTA active month option contract hanging standard. At present, PTA futures are not introduced into the market maker.


The three is to set the price spacing of PTA options. At present, the ratio between the price spacing of domestic commodity options and the exercise price is between 1%~2%. According to the operating range of PTA futures price, the price spacing of 50 yuan / ton, 100 yuan / ton and 200 yuan / ton will be set at the dividing point of 5000 yuan / ton and 10000 yuan / ton respectively.


Zheng Shang's official said that around the PTA option listing, Zhengshang has already launched the options simulation trading, market maker selection and analyst training.


In the next stage, Zhengshang will strengthen coordination and co-ordination in accordance with the unified arrangements of the SFC, conscientiously do a good job in the work of market organization, rules making, technical system preparation and investor education, effectively improve market supervision and risk prevention system, do well in market training and publicity work, and ensure the smooth and stable operation of new options.


"Two years after the listing of commodity options in China, the market has been running smoothly, the price is reasonable and effective, investors have been participating rationally, the function has initially appeared, the development foundation has been consolidated, and the conditions for accelerating development have been accelerated. Since the beginning of this year, the management measures of commodity options have been relaxed, rules and regulations have been perfected, and technical systems have been optimized. A marketing professional said.


He also pointed out that this time, the number of commodity options approved with the listing of PTA options was large, for example, there were also methanol options belonging to chemical varieties. Moreover, these varieties are the main active products in the domestic futures market. This shows that in the face of the uncertainty of internal and external environment and the increase in demand for corporate value preservation, China's confidence in developing commodity options is increasing and its strength is increasing.


"China's commodity options will usher in new opportunities for development and enter the path of accelerated development, and the breadth of its service to the real economy will gradually expand, and the depth will continue to increase." The professionals said.