Did the price fluctuations in the first week of the listing of styrene futures meet your expectations?

Analysis of the operation of styrene futures

As an important chemical raw material for "oil and coal, followed by rubber and plastics", styrene futures were listed on the Dalian Commodity Exchange on September 26. Since the listing for 7 trading days, the price trend of styrene futures has been in line with expectations, the market structure is relatively reasonable, and the price signal function has begun to appear.

It is understood that from September 26th to October 11th, the unilateral trading volume of styrene futures 193,900 lot, the turnover 7.766 billion yuan, the average daily position 14,800 lot. Industrial enterprises and institutional investors participate in styrene futures trading heat is high, of which the average daily position of corporate customers accounted for 36.1%, the market structure is more reasonable.

Price trend analysis

Judging from the price trend, Zhang Li, an analyst at Yide Futures, said that since the listing of styrene futures for 7 trading days, the overall downward trend has been oscillating, which is basically in line with market expectations under the background of large-scale production. On the first day of the listing of styrene, the operation was stable, the trading was good, and the closing price was slightly higher than the listing price by 56 points. On the second trading day, under the combined influence of factors such as the increase in inventory at the port, the weakness of the upstream pure benzene market, and the lack of spot transactions before the National Day, the styrene futures price followed the spot price down by nearly 120 points, with little change in the basis. After the National Day, the price of pure benzene at the raw material end fell sharply. The styrene futures price continued to decline with the spot price, and the basis continued to narrow. The lowest price of the main contract

Zhang Xuemei, styrene analyst at Longzhong Information, pointed out that the styrene futures 2005 contract fell from the benchmark price of 8,000 yuan/kWh to about 7,800 yuan/ton, which is in line with market expectations. The reason for the decline in prices is the recent decline in the prices of pure benzene and ethylene at the raw material end, and the import of ethylene is also more. At the same time, the downstream has entered the off-season of demand, which affects price changes.

Market participation and pricing power

Since the operation of styrene futures, market participation has been high, the overall operation has been stable, and the monthly price difference has shown a "near high and far low" pattern, which is consistent with the performance of the fundamental "strong spot and weak expectation", reflecting the reasonable pricing ability of styrene futures. "From the future price trend, Zhejiang Petrochemical 1.20 million tons and Hengli Petrochemical 720,000 tons of styrene projects may be put into operation in the fourth quarter, and the future styrene price under the expectation of excess is easy to fall but difficult to rise." said Shi Hanjian, an analyst at Zheshang Futures.

Futures price discovery function

He pointed out that due to the concentration of goods into Hong Kong and the weak demand in the downstream after the holiday, commercial inventories have been increasing recently, and the cash market prices have been under pressure and declined more than the futures prices, but the current price difference is still within a reasonable range.

Industry Impact and Future Prospects

In recent years, domestic styrene production capacity has continued to rise, and downstream consumption has also shown an increasing trend. However, the overall growth rate of downstream production capacity is relatively slow, and the market is facing adjustment changes, which poses certain price risks. Zhang Xuemei said that after the listing of styrene futures, industrial and corporate customers can use futures tools to do a good job in price risk control of raw materials and finished products. The procurement and sales pricing mechanism is also expected to gradually transfer to the futures pricing model.

Zhou Jun, deputy general manager of Nantong Chemical Light Industry Company, admitted that the understanding and participation of industrial customers in styrene futures will gradually increase. "Many companies are not very familiar with futures tools. Styrene futures have only been listed for a few days, and the market is still in the learning stage of futures tools, and it will take some time to become proficient. However, styrene futures can be delivered on a rolling basis to reduce potential delivery risks and pressures. I believe that with the arrival of the first delivery, the demand for physical enterprises to participate in futures trading will increase." Zhou Jun said so.