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Methanol Trade Circle is on the way again?

wallpapers News 2020-12-02
The risk management subsidiary of

has taken the opportunity to make great achievements. Cui Mou, who has been in the methanol trade circle of

carried hundreds of millions of yuan of capital, has been in the methanol trade circle for several years. This time, he used the medium long-term spot trade mode to collect the payment in advance, but there was not enough goods to be delivered at maturity.

recently, the news of "methanol traders running away" came from the East China market. According to the understing of futures daily, the news from the market has finally been confirmed: at the end of February this year, Cui Mou of Suzhou Luo Trading Co., Ltd. disappeared after collecting hundreds of millions of yuan of funds in Zhangjiagang Free Trade Zone.

according to market participants, Cui, the "protagonist" of the road running incident, has been wering in the methanol trade circle for several years, is regarded as a well-known figure. Previously, with a good reputation, Cui won a lot of "vote of trust" market share.

"this year, I bet all my belongings, but I didn't expect that tens of millions of yuan were wasted." As one of the victims of this runaway incident, Zhang, a Shanghai methanol trader, told reporters about his experience. Zhang Cui are not one-sided, have cooperated many times before. "It was the same way last year, with a net profit of 17 million yuan. But this year was not as lucky as last year, more than 40 million yuan was cheated away. " Zhang said helplessly.

in fact, there have been similar cases in the methanol spot market in the past. Because the market as a whole is not stardized, malicious running fraud often occur. In the first half of 2012, a chemical trader in Jiangsu Province hoarded a large amount of methanol, but due to the price collapse, the trader's capital chain broke ran away. In recent two years, the degree of market stardization has improved, such incidents rarely occur.

"compared with ferrous metal other markets, the phenomenon of methanol market running away is relatively small." Wu Zhengsi, an analyst with green Dahua futures, told reporters that compared with iron ore, copper, soybean other popular financing trade varieties, the import volume of methanol is relatively small the risk is relatively limited. In addition, since the international methanol price advantage is not obvious since 2013, the domestic methanol import dem has weakened, the occurrence probability of emergency events has been greatly reduced.

it is understood that there are three modes of methanol spot trade at present. One is the traditional store trade, that is, manufacturers terminals or traders realize the transfer of funds goods rights one-to-one. The negotiations are mostly one-on-one negotiation or the manufacturer's quotation the buyer's pricing by batches. The settlement is mainly a combination of cash exchange partial acceptance, which is mostly used for domestic terminals or traders to purchase from domestic manufacturers; the other is long-term cooperative trade, that is, manufacturers some medium large-scale traders or terminals Customers determine the quantity price through long-term agreement, so as to strengthen the control of long-term cost; thirdly, the emerging electronic disk market medium long-term spot trade in recent years have realized the combination of industry finance. The

incident is that the traders pre-sale the goods in the next half a month or a month receive payment, but there are not enough goods to be delivered when they are due, which eventually leads to the loss of wealth of the victims.

is a double-edged sword in the medium long-term spot trade.

is very common in the chemical market because it can effectively activate the inventory improve the efficiency of capital utilization. However, once the market price changes sharply, the downstream default risk inventory depreciation risk are easy to impact the cash flow of traders.

,

are common in the methanol trade in East China, especially in the eastern port area, the majority of the subject matter is imported goods. For traders who have financing needs are good at spot pre-sale, they are willing to take this risk. " Mr. Hu, a trader who has been in the methanol market for many years, said frankly that this method has been gradually accepted by the market.

according to Mr. Hu, under normal circumstances, the two sides of the trade first negotiate the price delivery date, then conclude a contract. The buyer pays the seller a 10% - 20% margin to deliver the goods the balance on the agreed date. "Since most traders have participated in medium long-term electronic disk futures trading accepted the concept of margin trading, medium long-term spot trade is easily accepted in methanol trade."

it is understood that the medium long-term spot trade of methanol originates from financing trade, which is a trade mode combining industry with financing.

"the former financing traders actually gave the spot market a very high rate of return." A senior industry person told the reporter that when the transaction price of methanol in South China was 3180 yuan / ton in 2012, some traders in South China market could receive a low-cost source of 3030-3080 yuan / ton due to a large number of financing traders. They could settle accounts in cash transfer the goods after payment. Affected by the low price of goods, the market was not particularly optimistic at that time. Traders were generally worried that the price of methanol would continue to fall, so they shipped goods one after another to take profits from low price goods, which led to the price falling all the way in the short term.

the above-mentioned people said that at present, the financing traders in the methanol market have extended from the initial state-owned enterprises to small medium-sized private enterprises, "it can be said that Cui is a miniature of small medium-sized financiers.".

according to Wu Zhengsi, there are more L / C T / t used in foreign medium long term spot trade settlement, the general risk is small. However, in the domestic medium long-term spot trade, traders usually sign medium long-term sales contracts with downstream companies collect a certain amount of deposit, then purchase from manufacturers or upper level traders in cash or acceptance mode. "The risk of property right transfer in the upstream downstream is concentrated in the upstream downstream, which leads to the risk of trading." She said.

in her opinion, due to the short cycle of supply dem price change of liquid chemicals, the risk of value change of inventory in transit is high, which will lead to the risk of default. Once the market price changes sharply, for example, the methanol price fluctuates sharply from the end of last year to the beginning of this year, the downstream default risk inventory depreciation risk are likely to impact the cash flow of traders. Although the medium long-term spot trade of

has great potential risks, it does not seem to affect the market's favor for this trade mode. According to the reporter's understing, not only in the methanol market, but also in the market of ethylene glycol, styrene, PTA, rubber other chemical products, this kind of trade mode is prevalent.

"in traditional trade, traders tend to be in the low pricePurchase in large quantities then sell them after the price rises. This transaction mode requires the purchase of goods in advance payment in full, which will take up a lot of funds generate large storage costs Li Sihua, a chemical analyst at Soochow futures, said that taking ethylene glycol, a liquid chemical product, as an example, the storage cost per ton was about 50 yuan. When a large number of warehouses were built in 2008, the annual storage cost of 10000 tons of goods was more than 6 million yuan. "Compared with the traditional trade, the medium long-term spot trade can lock in the forward price delivery date in line with psychological expectations with less payment for goods. This trading mode has changed the traditional operation concept won the favor of many traders." Li Sihua said. Objectively speaking,

are effective means for enterprises to improve inventory turnover rate. However, chemical products are different from copper other metals because of strict storage transportation conditions, low unit price, poor spot liquidity high storage transportation costs per unit value. " In Wu Zhengsi's view, the reason why the medium long-term spot trade has risen rapidly in the chemical market is generally accepted by port traders is that it can effectively activate the inventory improve the capital efficiency.

traders need more urgent risk management. Under the current economic situation, risk control is more important than ever before. Traders should make full use of the hedging function of futures market to avoid risks. At present, the introduction of risk management subsidiary business provides a good opportunity for many traders.

are similar to futures in some aspects. However, comparing the long-term spot trade with the futures, the reporter found that there are more essential differences between the two in addition to margin trading. From the function point of view, the ultimate purpose of medium long-term trade is to realize the transfer of goods logistics capital flow. As a result, traders bear the capital price risks before the transfer of goods rights, while futures is to transfer risks find prices. In addition, from the perspective of risk control, futures funds are entrusted by a third party, so the risk can be effectively controlled, while the lack of substantive supervision of medium long-term trade leads to increased risk. Although

, in reality, the medium long-term spot trade is more easily accepted by traders. What makes the reporter puzzled is that with the addition of polypropylene futures at the beginning of the year, the team of chemical products on the futures market is growing. Why do traders have to take the risk to adopt the medium long-term spot trade mode?

in this regard, Wu Zhengsi explained that methanol futures are relatively "young". In addition to the port area in East China, many traders in other regions have low awareness of futures. In the view of some traders, the current futures market can not meet their personalized needs. For example, receiving goods is likely to receive goods from factories warehouses, or domestic goods. In terms of price, it will not be very ideal, because the futures price reflects the overall domestic price, not only the eastern port price.

"as we do in rubber trade, we usually start to short the forward shipment in May June, even in July. Because the expected price is not optimistic, we sell short in advance charge the buyer about 10% margin." Feng Li of a rubber trading company in Shanghai told reporters that the delivery target of futures market is full latex, which can not be completely corresponding to the subject matter in spot trade. There is a high dem for funds in futures trading, spot short selling does not occupy funds, can collect part of the margin.

"medium long-term spot trading objects can be customized, such as margin ratio, warehouse, quantity, etc., there is a physical basis of spot, which makes traders more" assured. " Mr. Hu believes that the long-term spot trade mainly deals with chemical traders is relatively familiar with each other, which stimulates the interest of traders to participate.

"in essence, this is a gambling mode, nothing more than profit driven, gambling forward spot price rise fall." Peng Yaoxing of Nanjing Hanks Petrochemical Co., Ltd. admitted that the leverage effect of capital brought opportunities for traders to obtain higher profits with small, broad large scale. Especially in the background of fierce competition in chemical trade, long-term upside down of internal external prices, limited funds, traders' gambling nature shortcut mentality have been magnified.

in Peng Yaoxing's view, speculation game will inevitably produce risks. Once there is a breach of contract in the intermediate link, it will bring a lot of difficulties to the whole operation. "It can be said that this runaway incident has once again sounded the alarm for the chemical industry, further strengthened the risk awareness of practitioners, forced them to strengthen risk management, carry out more stringent credit evaluation on downstream customers counterparties." He said.

although the life of chemical traders is much better than that of steel traders, banks have also tightened the credit for chemical traders to a certain extent, the capital problem can not be underestimated. Therefore, traders should make full use of the hedging function of futures market to avoid trade risks. At present, the risk management subsidiary business of futures companies has been launched, which provides a good opportunity for many traders. Traders can cooperate with risk management subsidiaries in various aspects, whether it is third-party hedging, third-party risk control, or warehouse receipt trading, which is a good way to avoid risks. " Wu Zhengsi said. Some people in the industry of

said that in the current economic situation, risk control is more important than ever before, but more caution is needed in the choice of ways. It is better for traders to manage hedging risk through the market with third-party performance guarantee, futures market also needs to adjust relevant rules regulations in time to meet the dem of spot market. "


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TRUNNANO (aka. Luoyang Tongrun Nano Technology Co. Ltd.) is a trusted global chemical material supplier & manufacturer with over 12 years' experience in providing super high-quality chemicals and Nanomaterials. The nitride powder produced by our company has high purity, fine particle size and impurity content. Please contact us if necessary.
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