Today we will talk about some major events in the PTA futures market.
The first is the Hualian Sanxin forced position incident, which is well-known in the futures industry. We can see that the position of the red circle in this picture is the range from September 12th to 15th, when the PTA futures index plummeted.
The background is that in 2008, Hualian Sanxin was also the leading domestic manufacturer with the largest volume. However, after the financial crisis broke out, the entire international Oil prices and commodity markets have been falling. Hualian Sanxin also wanted to drag down the price, including the entire cash flow, so it went long in the futures market and finally delivered nearly 220,000 tons on the 0801 contract. The entire delivery The settlement price was 9,000 yuan, and the spot price at that time was 7,200 yuan.
Although it stabilized and held up the futures price, it took over the goods at a high price of 9,000 yuan. Just now we saw the gap. Once it jumped, hundreds of dollars were lost, so the loss of the entire value of the goods was nearly 400 million. Because the book losses, including the entire balance sheet in the early period, were indeed relatively large, and it entered bankruptcy and reorganization, Hualian Sanxin became a well-known long-short squeeze in the PTA futures market, and it was a typical case of failure.
What should we draw from this case, or what are some inspirations?
In the process of operating our physical enterprise, we must first pay attention to your cash flow and not carry high liabilities. In the past few years, we have learned that not only the PTA industry, not just the chemical fiber industry, but also other industries, its collapse or bankruptcy is not due to poor performance of its main business, but to the emergence of the entire cash flow or entire capital chain. The capital chain has been broken due to various reasons.
The second revelation is that when we do futures, we must not go against the macro trend or the entire market. In the futures market, if you trade futures and you go against the market, whether you are an individual or a company, no matter how powerful your ability or the resources you have are, it will be difficult to end well. The distant one is Hualian Sanxin, and the nearest one is the methanol Xin Huaxin incident, both of which ended in failure. We should learn from Yisheng, in fact, we should follow Yisheng. Yisheng jointly submitted a joint petition with the other five major factories at that time, saying that PTA futures could not reflect the development of the industry and would have a negative impact on the development of the industry.
In this process, throughout May 2013, the entire futures position has been increasing. The process of increasing the position shows that there is a very big difference between the long and short positions. , in this big disagreement, the bulls are basically the industry, and the shorts are the macro hedging funds or some institutional investors, who are short on the macro or the entire industry, and engage in a long-short confrontation.
After filing a petition with the China Securities Regulatory Commission in 2013, in fact from the end of 2013 to the beginning of 2014, the two parent companies of Yisheng, Rongsheng and Hengyi, also paid a heavy price on the PTA1401 contract. The price, of course, is not so heavy compared to Hualian Sanxin, because its market size is already large at this time, and the entire market is relatively large, so such an event happened in this market , has an impact on it, but not much. Specifically, this event was a huge purchase and delivery event on the 1401 contract. We can see this picture:
Since the beginning of 2013, the entire futures price has been plummeting. However, at the end of 2013, it had been oscillating around 7500 and could not drop. However, after entering January, the market experienced a sharp decline. Finally, on January 14, the PTA futures price fell below the finished product price and fell below 6830. Finished product price. Finally, there are two listed companies, Yisheng and Rongsheng. Some related subsidiaries are concentrated in COFCO Futures, Zhejiang New Century and Shanghai Tonglian. In September 2013, they began to go long on the 1401 contract against the trend, and put this The price has been trading sideways at 7500.
In January 2014, the entire commodity market plummeted, and the entire atmosphere was downward. Therefore, although I am long in the futures market for purchase and delivery, I cannot withstand the vigorous production of some small factories with 600,000 tons of PTA, so they produce at full capacity and deliver on PTA futures. Some other polyester companies also had a miserable business environment at that time. We can see that in 2013, polyester companies were also producing without profit. What should they do if there is no profit?
Stop for maintenance and throw the raw materials into PTA futures. Because at that time, I was selling PTA futures to do such a futures arbitrage, and the price difference was profitable. Then I used PTA as a raw material to produce polyester, and the cash flow was negative, so I joined in the process of selling futures. , the final 1401 contract including delivery pairs totaled a delivery volume of 510,000 tons. As can also be seen in the picture above, after the delivery, there continued to be a round of plummeting. In other words, this round of 1401 contractWe can say that the purchase and delivery incident of receiving goods is similar to the incident of Hualian Sanxin. After receiving the goods, the price continued to plummet, and the inventory depreciated very sharply.
What this incident has taught us is that, first, just like the Hualian Sanxin incident, no matter how large your market share is, if you go long against the trend, this general trend will not only From the overall fundamentals of PTA, it is a bit contrary to the trend. From the overall macro perspective, it is also a general trend and goes against the general trend, because throughout January 2014, the entire commodity market has been going down simultaneously, and the decline has been very large. , so this is called going long against the trend, and the losses will be serious. Another thing is that since the delivery loss incident of the 1401 contract, Yisheng’s participation in the futures market has been restrained in the short term. For example, in the first half of 2014, when production losses were very serious, it was one of the three giants. I no longer make any claims. I have joined forces with the three giants to control the shrinking supply load in the spot market at 70%. However, their participation in the futures market was much less intense at that time because they had learned from the past. This was an incident in the 1401 contract in 2014.
Another important event was in 2015. By March 2015, Far East Petrochemical declared bankruptcy on March 11, and the PTA industry had entered a period of substantial overcapacity reduction. stage. Through these events, we can clearly find that before this, the production and operation of the entire industry was very pessimistic, including downstream polyester. As long as the price of PTA raw materials is high, it will not be able to digest it, the cost will not be passed on, and it will face production losses. situation, so before 2015, the entire PTA and polyester industry was in an environment where the business cycle was declining and market supply and demand were extremely pessimistic. In this environment, in March 2015, Far East Petrochemical finally couldn’t bear it any longer. This was also a landmark event.
In addition to the bankruptcy of Far East Petrochemical, another event in 2015 was the explosion of Tenglong Aromatics. In the background, the cumulative inventory of the entire industry was very large, and so was the entire delivery warehouse. There is a bulging phenomenon. The exchange approved nearly 445,000 tons of delivery storage capacity on March 20. Looking at the market, the delivery storage capacity also experienced a sharp decline. At that time, the pattern of short-selling and long-selling was very obvious.
Around the Qingming Festival, the holdings of the entire PTA also increased significantly. Unfortunately, during the Qingming Festival, the 1.6 million-ton device of Tenglong Aromatics exploded. , the 4.5 million-ton unit of Xianglu Petrochemical separated by a wall has been parked for a long time, so a fire gave the bulls in the entire PTA market a successful rescue.
Let’s look at the credit warehouse receipt incident in 2017. Since the rise and fall at the end of 2016, the corresponding PTA credit warehouse receipt volume has also surged and fallen sharply. In March 2017, PTA futures prices continued to decline along with the entire commodity market, but the huge volume of warehouse receipts It was the straw that broke the camel’s back.
So from March to April, some letters appealing to the China Securities Regulatory Commission were circulated on the Internet. Judging from the time and environment at the time, this letter was also some of the reasons the bulls gave themselves, but We have to say that Yisheng’s credit warehouse receipts have indeed had a relatively large negative impact on the market. Some people call this credit warehouse receipt the nuclear bomb or nuclear weapon of PTA short sellers. Therefore, after this incident occurred, the exchange also conducted various arguments, including some surveys. Therefore, after the end of April, Yisheng’s credit warehouse receipts began to continue to decline. Entering June, Yisheng’s credit warehouse receipts accelerated their decline.
After the 1701 contract is canceled, the credit warehouse receipt may increase again, that is, from 0 It will start to increase again, but in the new year or after a new cancellation, the new volume will most likely be much smaller than 500,000 tons. Therefore, we think the pressure from credit warehouse receipts on the PTA futures market in the later period will gradually be resolved. </p
