On August 21, the 2014 China Coal, Coke and Steel Industries Conference themed “the coal, coke and steel industries in transformation and price risk management” was held in Qingdao. The conference was jointly sponsored by the China National Coal Association (CNCA), the China Iron and Steel Association (CISA) and Dalian Commodity Exchange (DCE) and organized by www.mysteel.com (Mysteel for short). In the center of concern is how to give full play to the functions of DCE’s futures market of ferrous industry chain and serve the development of the coal, coke and steel industries.
Addressing the conference, a DCE official said that DCE listed the coke futures in 2011 and the coking coal and iron ore futures in 2013, and despite the short periods of time, the futures have seen stable operation, brisk trading and constantly increasing open interest with the price representativeness continuously enhanced and the series of futures products on the ferrous industry chain gradually improved. Data show that in the first half of this year, the three products recorded a daily average open interest of nearly 600,000 contracts; the industrial enterprises have shown growing willingness to participate, and by the end of June this year, the 2,168 legal persons participating in the coke futures covered the clients on the whole industry chain such as producers, traders and downstream steel plants; the number of corporate clients participating in the coking coal futures reached 1,676, including the large-sized coal producers and traders in addition to the traditional coking enterprises and iron and steel enterprises; with the shortest time of listing, the iron ore recorded 1,856 corporate clients participating in the trading, including 6 mine enterprises, 48 iron and steel enterprises, 339 traders and a large number of investors of funds, private funds and futures, with 47 enterprises with the backgrounds of foreign capital and the diversified structure of market participation initially formed. Recently, Rizhao Steel Group signed China’s first iron ore basis trade agreement with CITIC Global Trade Co., Ltd. and the subsidiary of Yongan Futures, introducing the pricing model, which has been widely adopted internationally and extensively used in domestic industries of agricultural products especially the feed and oils, into the coal, coke and steel fields. It marks a big step forward for the traditional coal, coke and steel industries in making use of the futures market.
Talking about DCE’s work arrangements in the next step, the official pointed out that despite the good momentum of development at present, the three futures products of coke, coking coal and iron ore are yet to be expanded and deepened compared with other mature futures products on international and domestic markets. As a market organizer, DCE will continue the efforts in enriching and improving the derivatives and instruments system that can meet the demand of all kinds of enterprises on the industry chain for hedging by focusing on the fundamental purpose of serving the industries and constantly researching and developing new products, new instruments and new trading models; DCE will actively study the internationalization program for the iron ore futures; DCE will continue to step up the efforts in market support and cultivation, always adhere to the guideline of serving the real economy, further explore the new modes of serving the industries on the basis of maintaining the stable operation of the futures products, and help and encourage more enterprises to effectively participate in and make use of the futures market.
He said that since the 18th CPC National Congress, the CPC Central Committee and State Council have attached great importance to the development of the futures market, and introduced a series of policies and measures such as the “Some Opinions of the State Council on Further Propelling Sound Growth of the Capital Market”, the work in making the “Futures Law” is vigorously being pushed forward, the real enterprises have had the obstacles gradually removed in participating in the futures market, and the demand of the real enterprises for price management has been increasingly stronger. Thus, after 20 years of development China’s futures market has met a rare development opportunity in history with the price discovery and risk management bound to function more effectively. He expected the conference to become a good platform for exchange and learning of the participants on the coal, coke and steel industrial chain, hoping that the futures market in Dalian could serve as an effective channel for industrial enterprises to manage risks of market prices and meet the market opportunities and challenges. And DCE will make further efforts and new contributions to promoting the transformation and development of China’s real economy.
Jiang Zhimin, vice president of the CNCA, Wang Xiaoqi, vice president of the CISA, Ma Wensheng, chairman of Xinhu Futures and an expert from the industrial products business division of DCE delivered keynote speeches respectively on the operation of the coal economy, the status of the iron and steel industry, how coal, coking and mine enterprises use the futures instrument to manage the price risks and the operation of DCE’s futures sector of furnace burden. The representatives from the iron and steel and coking enterprises and research institutions analyzed the development directions of the enterprises under the new situation. At the theme forums, the representatives from the futures companies, consulting organizations and coal, coking and mine enterprises actively discussed the situation of the coal, coke and ore markets, the traditional enterprises achieving sustainable development by using the futures instruments and other topics.
After the listing of the coke futures in 2011, supported by CISA and CNCA, DCE joined hands with Mysteel to hold two sessions of “China Summit Forum on Coal & Coke Industry Chain”, which were well received by the coal, coke and steel enterprises. With the coking coal and iron ore futures listed on DCE in 2013, the relationship between the futures market and the coal, coke and steel enterprises have been closer and closer. In order to better serve the enterprises, the conference of this year has been formally renamed “China Coal, Coke and Steel Industries Conference”, which is sponsored by the CISA, the CNCA and DCE and organized by Mysteel. In the future, as DCE’s other industry conferences, the Coal, Coke and Steel Industries Conference will become a bond deeply integrating the industries and finance and an important platform for the futures market serving the real economy.
The conference has attracted the participation of more than 300 leading enterprises in the industries, including Shanxi Coking Coal Group, Shenhua Group, Shanxi Coke Group, Baosteel, Shougang Group, and Angang Group, with active responses from the industries.