On March 25, the big firms issued a notice saying that from 21:00 on March 29, night trading of linear low density polyethylene (LLDPE), polyvinyl chloride (PVC), polypropylene (PP) and other varieties will be increased, and the time of night trading of all varieties will be adjusted to 21:00-23:00.

Twelve-year-old plastics futures market has changed

In July 2007, Dachang listed plastic futures under the contract of linear low density polyethylene (LLDPE), followed by PVC and P P futures in 2009 and 2014 respectively. After many years of development, Dachang has become the largest plastic futures trading center in the world. More and more real enterprises use the futures market for risk management. Since listing, the number of legal clients involved in the futures trading of three plastic chemical products in Dachang has reached more than 40,000.

From the perspective of industrial chain, the upstream of plastic industry is mostly state-owned enterprises and central enterprises. They can not directly participate in the futures market institutionally, but when facing the pressure of production capacity, they can preserve their value through traders. At present, the main participants in the futures market are middle-stream traders and commodity enterprises, with a high participation rate of more than 70%.

Increasing night trading can effectively improve the continuity and effectiveness of plastic prices

There is a strong price correlation between the futures of plastic varieties listed on Dachang Stock Exchange and WTI, Brent Crude Oil Futures, China Crude Oil Futures, PTA Futures, etc. Up to now, China's crude oil futures and PTA futures have launched night trading. Therefore, with the widespread recognition and participation of investors in domestic futures market night trading, there is a growing demand for more varieties with continuous trading characteristics. The evening trading of plastic varieties by big firms can achieve the consistency of the trading time of futures varieties in China's chemical industry chain. It is of great significance to improve the price continuity and effectiveness of plastic varieties, better meet the market demand for cross-variety arbitrage and hedging transactions in the plastic industry, and better meet the needs of customers to manage price fluctuation risk.

Increasing Night Trading Plastic Futures and Accelerating the International Step

At present, apart from the introduction of PTA and other special products to foreign investors, the vast majority of China's futures markets have not yet been opened to foreign investors. Continuous trading is the development trend of global derivatives market. In the process of promoting the internationalization of futures market in China, in line with the trend of international continuous trading, increasing the night trading of plastic futures can better meet the trading needs of different types of investors and further enhance the international influence of our futures market.

In addition, the trading time of our futures market is different from that of the European and American markets. During the closing period of our futures market, the price fluctuation of the related varieties in the external market and the related basic information can not be reflected in time. When the white market opens, price jumps or large fluctuations are prone to occur, which affects the investors'investment and hedging effect. Therefore, opening night trading can not only accelerate the pace of internationalization, but also help to improve the effectiveness of the price of plastic futures market and the quality of futures market operation.

According to the statistics of Purchasing Institute of Plastics and Plastics, up to now, the domestic production capacity of PE and PP has reached more than 38 million tons, and that of PVC has reached more than 16 million tons.

In 2018, China's plastic products reached 60.42 million tons. Although China is a big producer, consumer and exporter of plastic products in the world, the main production equipment of plastic raw materials in China is to produce general materials, the proportion of high-end special plastics is low, and the pricing power of plastic raw materials is lacking. A large number of plastic raw materials are imported from abroad every year. Take 2018 as an example, PE imports are 14.03 million tons and PP imports are 4.8 million tons.

Under the guidance of the national strategy of financial service entities, it is a long way to seize the commanding heights of plastic trade and compete for the pricing power of the plastic industry. The introduction of night trading of plastic futures varieties is only the first step. According to the relevant person in charge of the big business institute, the following aspects should be done well in the future to speed up the internationalization process: First, to strengthen the construction of new varieties and new tools, and to launch the option tools of related varieties as soon as possible. Second, improve the futures contract, adjust the delivery area, and optimize the delivery registration brand system. Third, we should strengthen the construction of the OTC market and increase support for the OTC option pilot and the base trade pilot. Fourth, the introduction of foreign traders.