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To further enhance the functions of the futures market in serving industries, promote the philosophy of risk management, and guide the coke enterprises in actively participating in and utilizing the futures market, Dalian Commodity Exchange (DCE) and Shanghai Ganglian E-Commerce Holdings Co., Ltd. will jointly hold the “2013 China Coke Industrial Chain Summit Forum on Supply and Demand” at the Shangri-La Hotel, Qingdao, from July 24 to 26, 2013.
Since the second half of 2012, the entire coke industry has been in a grim situation, where the increasingly severe imbalance between supply and demand has caused the coal prices to keep dropping as a result of the limited potential increase in demand as against the increasing coke supply brought about by the continuous discovery of new coal mines, the constant improvement of mining technologies and a huge growth of imported coal. The DCE coke futures price index fell to RMB 1,455/ton on July 18 from RMB 2,000/ton in February, a decrease of 27.3%; the DCE coking coal futures dropped to RMB 1,063/ton yesterday from the highest point of RMB 1,300/ton on March 22, the day of the listing of the coking coal futures, a decline of 18.2%. The enterprises faced with business difficulties and a large scale of losses have shown special concern about the overall situation and the risk management. Meanwhile, the sound operation of the coke futures and the coking coal futures listed respectively in April 2011 and March 2013 and some enterprises successfully using the futures in hedging have attracted more and more enterprises on the industrial chain to pay attention to and participate in the futures market. However, due to lack of knowledge, policy constraints and other factors, there are still a small proportion of state-owned coal enterprises on the industrial chain using the futures in risk management.
According to an official with DCE, the main purposes for organizing the forum include, first, giving play to the functions of the futures market in serving the industries and building a high-end market service platform for the coal industry in information sharing and exchanging; second, energetically carrying forward the concept of risk management and improving the enterprises’ understanding of the futures market as well as vigorously motivating the enterprises to use the futures in risk management; third, discussing the macroeconomic situation and industrial policies in a bid to provide the directions for the enterprises in sustained operation; fourth, further enhancing the influence of DCE in the industries so as to create a favorable environment for the listing of the iron ore and other energy futures products in the future.
According to the sources, the theme of the forum is designed as: the risk management of China coal industry under the new situation. The forum will integrate the risk management concept into enterprise development with the main contents including analysis of macroeconomic situation and operation, discussion on the situation and development trend of China coal and steel industries in 2013, new development model of circular economy for coal, coke and steel enterprises, and the operation of the coal and coke futures markets as well as how coal and coke enterprises use the futures market in risk management under the new situation, etc. The forum will discuss the topics such as how coal enterprises reduce costs and improve efficiency in the context of increasingly fierce market competition, how to engage in market game after the abolition of the Contract on Coal and Power, how the domestic coal enterprises coordinate the internal and external mine resources of the group while fighting against the impact of imported coal, what impacts on domestic coke enterprises will be found with the cancellation of tariffs and quotas for coke export, and how the enterprises can use the futures market, etc.
The guiding units of the forum include the China National Coal Association, the China Iron and Steel Association, and the China Coking Industry Association. Currently, more than 200 enterprises have applied for attendance, including the leading enterprises in the industry such as Shanxi Coking Coal Group, Shenhua Group, Shandong Energy Group, Henan Coal Chemical Industry Group, Sichuan Coal Group, Shanxi Coke Group, Risun Group, Hebei Iron and Steel Group, Anshan Iron and Steel Group, Baotou Steel Group, Shandong Iron and Steel Group, and Qingdao Iron and Steel Co., Ltd.
