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As always, depending on the quality, reputation as life, continuous innovation to create good, improve quality

Plastic industry will have "big move"


From January to June, the cumulative total output of domestic plastic products was 26.704 million tons, an increase of 7.3 percentage points year-on-year. In June, the output of domestic plastic products was 5,267,700 tons, an increase of 14.18 percentage points year-on-year. The data shows that the growth rate of my country's plastics industry has slowed down significantly, the overall benefits have declined, and the industry's loss has increased. The plastics industry has reached a critical stage of structural adjustment and transformation.

The main development goals of the plastic processing industry during the “Twelfth Five-Year Plan” period are that the output of plastic products will increase by an average of about 12% annually, the total industrial output value will increase by an average of about 15% annually, and the total profits, total profits and taxes will increase by an average of about 18% annually. The average growth rate is about 9%, and the new product output value rate and the contribution rate of scientific and technological progress have been increased to 10% and 40%, respectively. But the less optimistic data in the first half of the year shows that there is a long way to go for plastics companies to achieve these goals.

Overall, technological upgrading in the context of product differentiation will become the key to further development of the plastics industry in the future.

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In recent years, the price of crude oil has fluctuated greatly, which has caused large fluctuations in the price of chemical products. Under the traditional free-to-market trade model, the chemical industry often has an embarrassing situation that "upstream companies sell low and downstream companies buy expensive". With the compression of profits, price risk has threatened the stable operation of enterprises. After the linear low-density polyethylene futures were listed on large trading houses in 2007, its impact on sales and procurement has become increasingly apparent. In recent years, more and more industrial enterprises have begun to use futures instruments to resist price risks, and gradually began to explore the basis point price trading model based on futures prices. Recently, with the support of Dashang’s 2018 basis trade pilot project, Shanghai SECCO Petrochemical Co., Ltd. (hereinafter referred to as SECCO) and midstream enterprise Zhejiang Mingri Holding Group Co., Ltd. (hereinafter referred to as SECCO) Tomorrow) Strong forces, through the active promotion of Guotai Junan Futures, not only successfully carried out the basis trade experiment, but also further promoted this model as "inclusive + basis trade". People in the industry generally believe that this will become a new direction for business management and trade models. A bases on the spread price to develop the right trade As an upstream production enterprise, SECCO often encounters problems in downstream customers that are difficult to reasonably price for forward orders and that the downstream consumption changes lead to supply and demand mismatches. Traditional spot pricing and sales models are increasingly unable to meet market developments. As a trade-oriented enterprise, there will be exposure on both the purchasing and sales sides tomorrow, and the sudden large fluctuations in prices will undoubtedly bring great operational risks to the entire enterprise. "The risk cannot be eliminated, but it can be managed and transferred through financial derivatives." said Chen Fangyi, manager of the investment and research department of Tomorrow. It can be said that tomorrow is one of the earliest chemical companies to accept and introduce the basis point price model. Not only did they start to form a professional team very early to learn and study the use of futures and other financial instruments to manage price risk, but also tried twice in 2015 and 2016. Over-the-counter options trading, at the same time participated in the big business in 2018 basis trading and OTC options pilot projects. The continuous learning and practice of financial derivatives tools has enabled tomorrow to innovate its business philosophy and expand its business path. Based on the previous exploration experience, in the second half of 2018, in a business exchange with Guotai Junan Futures, tomorrow came up with an idea: Can you combine the upstream and downstream through the combination of basis price and OTC options to form a A new business model? The purpose of the basis point price is to transfer the risk brought by absolute price fluctuations. Based on the agreed futures price of a certain month, the trading parties determine the transaction price by adding or subtracting premiums and discounts (basis) on this basis. The parties to the transaction convert from the game of absolute prices in the traditional trading model to the game of basis. The basis fluctuation is small, and it has the characteristics of regression in the delivery month, which is relatively easy to grasp. During the pricing period, both parties can decide whether to carry out buying (selling) hedging operations in the futures market. As a basis buyer, you can lock in purchase or sales in advance, arrange production and manage inventory in a reasonable way. Pricing is based on the futures market, and you can freely control the pace of point price and flexibly control purchase costs. Basis sellers can lock in sales in advance, occupy market share, transfer price risk, and obtain reasonable profits. At the same time, if a service provider signs a forward order with rights in the same period of upstream and downstream, and connects the upstream and downstream of the industry into a whole business, then the basis price and the combination of options can enable upstream companies to rise or fall in the forward market. Choose a relatively high price settlement to prevent the situation of "selling cheap"; enable downstream companies to choose a relatively low price settlement no matter whether they rise or fall in the forward market, to prevent the situation of "buying expensive". The service provider pays according to the final settlement price when the order is settled. The upstream ship to the delivery location designated by the terminal factory according to the service provider's delivery requirements, and the terminal factory customer signs an order to lock the cost of raw materials and obtain

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